Court revokes arbitration demand for PCD to pay 6 billion baht compensation to builder of Klong Dan project

Central Administrative Court on Tuesday (Feb 6) revoked an order of the arbitration panel demanding the Pollution Control Department to pay six billion baht in compensation to NVPSKG consortium, the building of the corruption-prone Klong Dan wastewater treatment plant in Samut Prakan.

The lawsuit was filed with the Central Administrative Court by Vichitphan construction company and six partners, demanding compliance of the arbitration panel’s ruling dated January 12, 2011 ordering the Pollution Control Department to pay the five companies 4,983 million baht and US$ 31 million plus 7.5 percent interest thereon for the revocation of the project by the department.

The Central Administrative Court ordered the PCD to pay the compensation as ruled by the arbitration panel and this was upheld by the Supreme Administrative Court. But the PCD demanded a retrial of the case, citing that the implementation of the project was illegal and there was collusion of corruption between the builder and PCD officials.

In its ruling which was read on Tuesday, the Central Administrative Court said there were irregularities in different implementation processes, ranging from defying rules and cabinet’s resolution by PCD officials; selection of the builder for the project; bidding process to changing of some provisions in the contract already approved by the Attorney-General’s Office and land acquisition for the project.

As such, the court ruled that the altered contract had no binding effect on the PCD and, hence, compliance with the arbitration order would amount to violation of public peace and order.

Klong Dan project dated back to 1995 when the cabinet then approved two waste water treatment plants in Samut Prakan. The project design was later changed to just one plant and the project site was moved about 20 kms away to a 1,900 rai of mostly swamp in Bang Bo district owned by Klong Dan Marine and Fishery Company. This caused the construction cost to balloon from 13.6 billion baht to 22.9 billion baht.

Former deputy interior minister Vatana Asavahame was sentenced to ten years in jail by the Supreme Court’s Criminal Division for Holders of Police Offices for bribing officials to issue land title deeds for the land in Bang Bo district which were later sold to the PCD for the Klong Dan project.