Government scores a victory over corruption

opinion March 09, 2018 01:00

By The Nation

The Klong Dan case had its roots in graft long ago, but a decision this week saved taxpayers billions

Finance Minister Apisak Tantiworawong and his team deserve credit for helping the government win an initial landmark victory in the corruption-ridden Klong Dan wastewater-treatment case earlier this week. Apisak was instrumental in seeking a judicial review of a ruling by an arbitration panel that required the Pollution Control Department (PCD) to pay Bt9.6 billion to the private firms behind the failed multibillion-baht project.

Approved by the Banharn Silpa-archa Cabinet in 1997, the Bt23-billion project was corrupt from the outset. Politicians in office at the time and officials of the PCD and other government agencies, as well as private company executives, were involved in a complex web of conspiracy designed to cheat taxpayers out of a vast amount of money.

After contracts for building wastewater treatment facilities in Samut Prakan province were terminated in 2003, Klong Dan Marine and Fisheries Co and NVPSKG Joint Venture, in which major Thai building contractors partnered, took legal action against the government and sought massive compensation through arbitration. An arbitration panel tasked with settling the dispute between the government and the private firms ruled in favour of the latter, requiring the government to pay the compensation demanded.

The Finance Ministry made two instalment payments on behalf of the PCD, but these were suspended when the Supreme Court and a lower court delivered verdicts on multiple criminal cases in connection with the same scheme.

Wattana Asavahem, a former Interior minister, was sentenced by the Supreme Court to a 10-year jail term for abusing his authority while in office to facilitate fraudulent ownership documents covering nearly 2,000 rai used in the project. The ex-minister fled the country before the verdict was read and remains a fugitive. In addition, Wattana and 10 other senior executives and directors of several Thai construction firms were each sentenced in a lower court to three-year jail terms for their roles in the controversial scheme.

In 2016, the Prayut Chan-o-cha Cabinet assigned minister Apisak to seek a judicial review of the Klong Dan case, citing fresh evidence and especially the verdicts of the Supreme Court and Criminal Court. The Criminal Court had ruled that Wattana and other directors of the NVPSKG Joint Venture were guilty of conspiring to cheat the state by playing different roles in connection with the scheme. These ranged from using fraudulent land titles, to putting together multiple properties for sale to the state for construction of the treatment facilities, to jointly bidding for the construction contracts.

Above all, Wattana and the other individuals and companies were all inter-connected, and there were no specialist firms for wastewater treatment involved in the scheme, resulting in massive losses to the state. The private firms turned to the arbitration panel to settle the dispute following contract termination and won the ruling, putting the government in a position of having to pay them Bt9.6 billion in compensation.

After considering new evidence presented by the PCD, the Central Administrative Court earlier this week nullified the panel’s ruling, reasoning that there was no legitimate or lawful basis for ordering compensation. However, the firms could still lodge an appeal with the Supreme Administrative Court and seek a final judgement in their favour, but for now, the government seems to have the upper hand over the unscrupulous private firms.