Turning sewage into gold

Bangkok Post 24 September 2000

By Supradit Kanwanich

WHAT A WASTE: Villagers of Tambon Klong Daan have finally laid official corruption charges against the contractors and officials who they claim have milked the Samut Prakan Wastewater Treatment Plant for all it is worth

“The land not only costs double the official estimates, the area may be hundreds of rai less than the contract says," village leader Chalao Thimthong told Perspective recently.

About 100 residents left Klong Daan in Bang Bor district on September 8, together with leader Chalao, to submit a letter of complaint signed by over 1,000 villagers to the National Counter-Corruption Commission (NCCC). The letter calls for an investigation into corruption and other irregularities by state officials involved in the Samut Prakan Wastewater Treatment Plant project.

The officials involved are mostly from the Pollution Control Department (PCD) of the Science, Technology and Environment Ministry (STEM), and the Land Department, responsible for the land survey and land rights transfer.

The 1997 census of Samut Prakan province documented about a million inhabitants and over 5,200 industrial plants-the highest tally in the country. No wonder, the province has been declared a pollution control area since 1993. The letter to the NCCC calls for a probe into three allegations:- PCD officials manipulated the turnkey project to favour the contractor, causing the state budget to rise from the original Cabinet-approved figure of 13,612 million baht to 23,700 million baht, an increase of some 10,088 million baht.

- PCD and other state officials manipulated the land purchase for the project, so that the amount paid for the land was 1,065 million baht more than the actual value of the land.

- The actual land area may be less-by several hundreds of rai-than the indicated 1,903 rai.

ORIGINAL PLANS

The letter points out that on October 17, 1995 the Cabinet approved in principle the wastewater management project in Samut Prakan. At the same time, the Cabinet assigned STEM as project supervisor for the western collective wastewater treatment project at Bang Pla Kod in Samut Prakan, under the Industrial Works Department of the Industry Ministry, together with the eastern wastewater treatment project at Bang Pu Mai, under the Public Works Department of the Interior Ministry.

The 2,722-million-baht western project was to be located on 350 rai of land at Bang Pla Kod while the 10,144-million-baht eastern project was to be located on 1,550 rai of land in Bang Pu Mai at Sukhumvit Road's 38 kilometre marker. These sites were selected for proximity to industrial areas that produce a lot of contaminated water.

In response to projected wastewater emissions, the western plant was to treat 152,000 cubic metres of wastewater a day while the eastern plant was to treat about 400,000 cubic metres a day.

With other related expenses, a budget of 13,612 million baht was approved for the two projects. According to the letter, the PCD later conducted a prequalification bidding which only two groups passed: a Hyundai-led group and NVPSKG & NWWI-a joint venture of North West Water International Ltd, Vichitbhan Construction Co Ltd, Prayoonvisava Engineering Co Ltd, Si Sang Karn Yotah (1979) Co Ltd, Krung Thon Engineers Co Ltd and Gateway Development Co Ltd, in association with Camp Dresser & McKee International Co Ltd.

However, for some reason, the Hyundai group later withdrew.

A traffic committee disagreed with the large scale construction of any infrastructure that would involve digging up earth (open cut). Later, the Cabinet modified the project so as to keep it all in one location in order to avoid traffic jams.

LOCATION CHANGE

The villagers' letter also states that on August 20, 1997 the PCD signed a turnkey contract with the NVPSKG group for design, construction and land acquisition for the Samut Prakan wastewater management, collection & treatment project.

The letter added that the contractor proposed using land situated in a mangrove forest next to the sea in Group 11 of Tambon Klong Daan of Bang Bor district. The plot is located about 20 kilometres from the site approved by the Cabinet and is not in an industrial area.

The villagers claim that the contractor deliberately chose the Klong Daan site in order to locate the industrial plants far away from the project area. Because of the greater distance of piping required to connect the project to industrial areas, the budget increased from 13,612 million baht to 23,700 million baht. In fact, 20 kilometres more pipes were called for compared to the Cabinet-approved location. One three-metre long, three-metre diameter pipe costs 170,000 baht. Therefore, the additional length added 1,133 million baht to the project cost.

Meanwhile, three of the companies in the joint venture had formed an affiliate company to produce water pipes for the project. The three companies are Vichitbhan, Prayoonvisava Engineering and Si Sang Karn Yotah which together formed Thai Ruang Co Ltd located at Sukhumvit Road's kilometre 49 marker.

In their letter of complaint to the anti-corruption commission, the villagers also called attention to the resignation of a former PCD chief who signed the turnkey contract with the NVPSKG on August 20, 1997. They claimed the ex-chief tendered his resignation letter to former STEM permanent secretary Kasem Snidvongse na Ayudhya on August 15, 1997-five days before he signed the contract. This, the villagers say, puts the validity of his signature in serious doubt.

DUBIOUS LAND PURCHASE

In their letter to the NCCC, the villagers stated that on February 17, 1998 the PCD approved the land inspection report from a committee made up of PCD and Samut Prakan provincial representatives. The committee checked the authenticity of all land documents submitted by the contractor: 17 title deeds for a total of 1,903 rai at an average price of 1.03 million baht per rai. The ownership papers show that the land belonged to Klong Daan Marine and Fishery Co Ltd.

The villagers say that three days later the PCD, authorised by the Treasury Department of the Finance Ministry, legalised the transfer of 1,900 rai of land for 1,956 million baht-twice its actual market price.

The land is actually a composite of 17 plots. According to the official estimate of the Samut Prakan Provincial Land Office in Bang Pli, the price should be only 480,000 baht a rai, or a total of 913.44 million baht.

However, on January 14, 1998 the Water Quality Management Division (WQMD) of the PCD asked Thai Military Bank for a valuation of the 17 plots to be used as reference for the land purchase.

Two days later, the bank replied that since the land was by the sea it had not elicited much interest from buyers. As for the land near or around the project site, the bank reported that none of the owners had ever used the land for collateral on a loan.

The bank added that there was not much buying or selling of land at all in the area and that for these reasons it could not make an estimate of its value.

Next, the WQMD requested a valuation on the 17 plots from First Bangkok City Bank. On January 23, 1998 the bank wrote back saying that the land was on a mudflat regularly flooded at high tide. State authorities had built roads and constructed watergates to prevent seawater from mixing with freshwater. Thus the area was considered to be a special purpose area outside the bank's definition of commercial land. And again, for this reason the bank could not offer an estimate of its value.

PRICE COMPARISON

The villagers' letter also states that the prices of three similar land purchase deals prove that the project cheated the government out of a great deal of money.

The first example is only seven kilometres from the wastewater treatment plant.

Patco Land Co Ltd sold to the Finance Ministry 115 rai of land in Tambon Klong Daan, north of Sukhumvit Road, for the ministry to build the Samut Prakan Central Prison.

Ih this case 137 rai of land was purchased for 137.6 million baht-or about one million baht per rai. However, Chalao notes that the location is much better than that of the wastewater project. The land is on higher ground, in a freshwater area which is not inundated by the tide. Also, the land price is close to the actual market price.

The second example is 52.6 square wah of land on a housing estate in Tambon Klong Daan, sold by Singh Land Co Ltd (Public) to Mr Suwat Uthaiphol. In comparison to the project's land cost of 1.03 million baht per rai, this land cost about four million baht per rai. However, the land is fully developed, including roads, drainage, piped water, electricity, and other utilities. Moreover, it is right by Panvithi Road, a major district road connecting to Thepharak Road and Bang Na-Trat Highway five kilometres away.

The third example is 15 kilometres away from the wastewater plant project.

It is a 45-square-wah piece of land in Tambon Bang Prieng in Bang Bor district, sold by Varocha Homeland Co Ltd, a land dealer, to Mrs Sukanya Rutiyaniwat. It also has full infrastructure, including roads, drainage, water, phone and power lines and is only three kilometres from Bang Na-Trat and not far from Samut Prakan township, factors which together justify its price tag of 4.8 million baht.

All three examples are located on solid high ground, unreachable by the sea and not subject to erosion. (See location map).

By comparison, the wastewater project is located on a mudflat where the impact of the sea is so devastating that the Highway Department had to construct earthen dikes to prevent the road from becoming flooded at high tide. Also, the project site is right on the coast nearly 20 kilometres from Bang Na-Trat.

CALL FOR THOROUGH PROBE

In their letter, the villagers say that the PCD should have based its valuation on land near the project. For example, in July this year, land near Sukhumvit Road's kilometre 57 marker-just 100 metres west of the site-was sold for only 400,000 baht.

The letter points out that project officials pointedly ignored the land price quoted by the Samut Prakan Land Office (Bang Pli branch).

The officials dismissed the valuation because it was made on January 12, 1998, in the depths of the economic recession when they said the price of land had fallen to about 50 percent of previous estimates, and still there were few buyers.

Finally, the villagers' letter also urges the NCCC and the Royal Thai Survey Department to check the actual land area. They believe the site is much smaller than the indicated 1,900 rai. Chalao explained to Perspective that the villagers saw several irregularities in the 23,700-million-baht project, starting with the failure to inform the villagers about its implementation from the very start-there was not even a single attempt to get the consent of the community.

The PCD asked Thai Military Bank and First Bangkok City Bank for a land price valuation but they declined because they had no branches in Klong Daan.

However, the Government Savings Bank, Thai Farmers Bank, and Bangkok Bank all have branches in Tambon Klong Daan, but the PCD did not approach them.

Chalao believes some of the 17 plots of land had earlier been mortgaged with one of the banks, and he wants the NCCC to look into this matter.

"And if anyone won't take our word for it," he concludes, "ask any land dealer if the land bought by the wastewater treatment project is fair to the taxpayers and you'll get the same answer – absolutely not."