A dirty, dirty business

15 April 2002

Where there’s muck, the old saying goes, there’s money. By all accounts, Samut Prakan is Thailand’s muckiest provinces. A few people have alchemised its pollution into gold.

In 1993, the Pollution Control Department (PCD) counted 5,200 factories spilling out industrial waste in Samut Prakan. The Science Ministry got a consultant to spec a wastewater project. The plan was circulated to relevant government agencies. The Industry Ministry, Finance Ministry and NESDB pointed out the project overlapped with other projects already under way. The Interior Ministry criticised the turnkey approach, and warned there would be problems over the land purchase. The Budget Bureau wondered if the completed project would ever operate at a profit.

The Science Ministry took these objections in its stride. It ignored them. The Cabinet approved a budget of 13.6 billion baht in October 1995. The Asian Development Bank (ADB) offered its largest-ever loan for a turnkey project. Bids were called.

Then the fun started. Thirteen firms showed initial interest in bidding. By the end of the process, all but one had mysteriously withdrawn. The remaining NVPSKG consortium suggested some changes to the original design. Instead of two plants located in the two areas with the most factories, it suggested one big plant 20 kilometres away at Khlong Dan. It also suggested upgrading the piping and other details. The budget increased by ten billion baht.

Why did the contractor’s suggestions differ so much from the consultant’s original spec? Why was the new location not among the 13 options identified by the consultant? Why did the Science Ministry not review this major change (the Chula team trying to trace the paper trail cannot find a review)? Why did the ADB not treat this as a major revision requiring a full reappraisal? Why did the Cabinet approve the relocation, upgraded specs, and budget hike without a murmur? Why was there no assessment of impact on the environment and local communities?

Now watch the muck turn into money. The contractors bought 1,903 rai for the project at an average cost of 1.03 million baht a rai. Give or take a few satang, that’s two billion baht. The local Land Office’s estimate for that location was 480,000 baht/rai. Banks said there was no comparative data on land sales in that zone because the land was scarcely saleable. The PCD justified the high price by comparing it with the cost of land bought for the provincial jail, and land in a housing project—much better locations than the project’s flood-prone stretch of deserted mangrove.

Why all this happened is, of course, a mystery. But here is some information that can help you guess.

In NVSPKG construction consortium, the S stands for the Sisaeng Kanyotha company of the Silpa-archa family. The P stands for the Prayun Wiswakam company of the Liptapanlop family.

The company that sold the land (Khlong Dan Marine and Fishery) is said to belong in part to the Asavaheme and Pinkayan families.

The Science Minister who first approved the project was Suwat Liptapanlop. The prime minister at the time was Banharn Silpa-archa.

The Science Minister at the time of the revision was Yingphan Manasikan. He was part of the “cobra faction” headed by Wattana Asavaheme.

The consultant company (Seatech) is part-owned by Subin Pinkayan, former commerce minister who topped the list of “unusually rich” in 1991.

It gets worse. The project is not liable to be much use. It will probably never run at more than 25 percent of its capacity and always make a loss. That’s because the new location is far away from the biggest concentrations of polluting factories. Pipe connections will be expensive. A survey found 90 percent of factories had built their own wastewater facilities.

The same thing has happened on a smaller scale with wastewater projects elsewhere. The specs are set too high. The construction contractor makes a lot of money. But the resulting facility is too expensive to run and maintain. In 1998, only 5 of the 26 plants were said to be working. Now there are some 80, and a House committee recently concluded that only a few were working properly, and most of the 64 billion baht investment was wasted.

It is striking how many of those who have headed the Science Ministry over recent years have very little obvious interest in science. Suwat Liptapanlop. Yingpan Manasikarn. Now, Sonthaya Khunpleum. It is striking how many of them have interests in construction contracting.

It gets still worse. The relocation of the project onto a certain piece of land also threatens a highly productive fishery. The unusual currents around the river mouth create a unique marine environment in the mangroves of Khlong Dan, especially good for shellfish farming. The villagers who depend on these fisheries were never consulted. They found out about the project when the contractor erected a sign.

Despite the local protests, the project has proved unstoppable. Suwit Khunkitti tried to halt and investigate the project in 1999. He was steamrollered. Arthit Urairat said he would lose his job as Science Minister if he interfered.

The ADB held an independent review of the project. The Science Ministry tried to prevent the investigators getting access to the site. The review found the ADB had broken its own rules and procedures in six ways. Why was there no reappraisal when the site changed and the cost rose? Why was the project wrongly categorised so that the environmental impact was never examined? Why was there no social impact assessment? Why did the ADB not apply internally the standards of governance which it preaches to others?

It gets still worse. The contractor is now talking of asked 6.8 billion baht compensation for the delays and difficulties caused by the protests. Before paying this, the government should conduct the same sort of investigation currently being done for the expressway project.

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