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Public-private partnership law and corruption

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Corrupt politicians soon dreamed up ways to circumvent the original public-private partnership (PPP) law of 1992. Can a new rewrite of the law close all the loopholes in the law used for corruption? 



This is an extract from a longer article which can be found here

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Korn's revamped PPP law unlikely to stop corruption by Wichit Chantanusornsiri


shaking hands...I believe it is our rural folk who suffer the most from corruption, as funds better spent on schools, infrastructure and social services are lost due to the greed of politicians, bureaucrats and unscrupulous businessmen. I have seen this first-hand - recently one of my relatives was forced to wait three days in front of the elevator at his local hospital in Nakhon Si Thammarat, before a hospital bed became available. Three days of waiting for the state to fulfil its part of the social contract with one of its citizens. A three-day wait that may very well have been less, were it not for the loss of development funds due to corruption. 

Finance Minister Korn Chatikavanij recently estimated that if corruption could be cut by just 10%, it would free up an additional 100 billion baht per year to help develop our country. I think he perhaps understates the potential savings. 

Interestingly, Mr Korn's ministry is poised to propose changes to a key piece of legislation that was implemented nearly two decades ago with the very goal of safeguarding against public corruption. The 1992 Joint Public-Private Venture Act, initiated by the Anand Panyarachun government, was in response to widespread public disgust at the bureaucracy's demand for "tea money" from the private sector seeking contracts with the state. Projects worth over 1 billion baht would have to undergo a lengthy, comprehensive vetting process by officials outside of the agency championing the contract, to help ensure an independent review.

The ministry now argues that this law is in urgent need of a review, if critical infrastructure investment is to materialise to help support the country's development in the medium term. Few would argue that the 1992 law is perfect in its current incarnation, and that adjustments are sorely needed to help match changes made since the last century in the country's bureaucracy, social needs and economic structure.

Yet it is unfortunate that the new "PPP law", which aims to establish a new paradigm for public-private partnership ventures in the country, says little about safeguarding against corruption that was the very raison d'etre of the law it seeks to replace.

I remember that one of the main points that helped lead to the creation of the 1992 law was the discovery that the Telephone Organisation of Thailand had awarded a private concession to run 3 million telephone lines based on an investment proposal that took up less than half a page of A4 paper.

And so the 1992 law imposed new regulations to help safeguard the public interest and the Treasury. Agencies would first have to justify why a new investment programme must be run by the private sector, rather than by the government itself. Feasibility studies would also be required to explain the public interest, with the National Economic and Social Development Board tasked with ascertaining whether the project fit in with longer-term development priorities. Cabinet approval would also be required before funds are committed, with representatives from multiple agencies responsible for drafting the terms of the project contracts that would bind the concession holder or contractor.

Naturally, politicians of all flavours have generally looked unfavourably at the law, particularly the vetting requirements outlined under Section 13, which effectively transfers power and authority from the political leadership to the country's technocrats. Of course, examination and analysis takes time. Mr Korn has said that one objective of the new PPP law would be to reduce the time required to initiate and award projects to the private sector to just 12 months, compared with around 48 months under the 1992 law.

A new PPP committee, chaired by the prime minister himself, would have the final authority to vet and approve major infrastructure projects.

The need for cabinet approval would be halved to just a single instance, and the scope of the law itself in terms of the size of projects requiring additional vetting would be made flexible and left to the discretion of the PPP committee.

Yet I can't help but wonder whether it is the people, and not the law, that are the root of the problems that complicate major public works.

I agree that there are elements of the 1992 law which lack clarity and can be cause for confusion. But cases are plentiful where extensive efforts have been made to escape the added spotlight demanded by the law, such as by separating project phases into sub-projects, each valued under the 1-billion-baht trigger point, despite the fact that each project is indeed part of a larger one...

Wichit Chantanusornsiri is a senior business reporter for Bangkok Post.

(Source: Bangkok Post, MAKING SENSE, Korn's revamped PPP law unlikely to stop corruption, 16/12/2010, Wichit Chantanusornsiri, link)

private public partnership (PPP)
- a government service or private business venture which is funded and operated through a partnership of government and one or more private sector companies (See Wikipedia)

circumvent - go around and avoid something
loopholes - things that a law does not cover, that allow a person to go around the law
revamp - improve, completely change and make better, overhaul 
corruption - (See Wikipedia on bribery, corporate corruption, and political corruption)
rural - in the countryside (farms, forests), not the city ชนบท, บ้านนอก
folk - people
suffer - to experience physical or mental pain
funds - money needed or available to spend on something เงินทุน

infrastructure - the high-cost facilities that everyone in the economy shares (water, roads, electricity, trains) สาธารณูปโภค (See Google Definitions)
services - บริการต่างๆ things produced in service industries, not a physical good that can be bought, a waitress and a cook in a restaurant provide a service, technically: a sequence of activities that does not result in ownership of the outcome (See Wikipedia on services and the goods and services continuum)
greed - the desire to have a lot more of something than other people, more than is fair ความโลภ
bureaucrats - people who work in government departments ข้าราชการ

unscrupulous - behaving in a way that is dishonest or unfair in order to get what you want ที่ไม่ซื่อสัตย์
first-hand - when you see or experience something for yourself (not just hear about it from other people)
relatives -
members of extended family (not just mother, father and children, but also grandparents, aunts, uncles and cousins)

local - in or related to the small area that you live in ท้องถิ่น
state - government รัฐ
fulfil - achieve some goal, do something it promised to do สำเร็จ
contract - a written (or oral) agreement that is legally binding สัญญา
social contract - when a group of people give up the rule of their country (sovereignty) "to a government or other authority in order to receive or maintain social order through the rule of law. It can also be thought of as an agreement by the governed on a set of rules by which they are governed" (See Wikipedia)
development - the gradual growth and formation of something

free up - make available something that is not available now
understates -
says that something is smaller than it is
potential - possible ความเป็นไปได้
potential savings - places in spending where money might be saved
ministry - a government department dealing with an area of activity กระทรวง
poised - about to do or achieve something ได้มาซึ่ง
key - important คนสำคัญ
legislation - a law or set of laws suggested by a government and made official by a parliament กฎหมาย, การออกกฎหมาย
implemented - when a plan is put into action, actually doing the things in a plan
decade - period of ten years เป็นสิบๆปี
safeguard - make safe, protect from danger
initiated - created; started ริเริ่มโดย
widespread - happening or existing in many places, or affecting many people อย่างแพร่หลาย
demand - the need and desire to buy goods and services by households and businesses
sector - a part of the economy (public sector = government, private sector = all businesses, household sector = families and consumers, banking sector,...) (See Wikipedia) ภาคเศรษฐกิจของประเทศ
contracts - grows smaller, shrinks
undergo - to experience something which is unpleasant or which involves a change ประสบ (เหตุการณ์ในด้านลบ)
comprehensive - complete, includes everything needed, covers all aspects ที่ครอบคลุม
vetting - examining something or someone carefully to make certain that they are acceptable or suitable ตรวจสอบ
process - a series of actions that you take in order to achieve a result แนวทางปฏิบัติ, กระบวน, วิธีการ

championing - fighting for some cause (supporting and helping something to become successful)
ensure - to make certain that something happens or is done รับรอง ให้ความมั่นใจ
independent - free from outside influence เป็นอิสระ not taking help or money from other people พึ่งตนเอง
independent review - evaluating and making a judgement about something free from outside influence

urgent - must happen quickly, needing to be dealt with immediately ที่เร่งด่วน
critical - situation is very serious and dangerous. extremely important because a future situation will be affected by it สำคัญยิ่ง, อย่างวิกฤต
investment - taking your money and putting it into projects to make a profit or earn interest (buying stock shares, bonds, real estate)
materialise - to happen or become real กลายเป็นจริง
support - help, by giving money, for example สนับสนุน
term - a period of time 
in the medium term - during a period of time that is 2-10 years into the future ...
current - of the present time ปัจจุบัน
current incarnation - in its current existence (this time, it has existed or happened many times before)
sorely needed - needed very much
century - a period of one hundred years ศตวรรษ
bureaucracy - large and slow government departments (with lots of red tape)

unfortunate - unlucky โชคร้าย, เคราะห์ไม่ดี
establish - to start a company or organization that will likely continue for a long time สถาปนา, ก่อตั้ง, จัดตั้ง
new paradigm - a new way of doing or of thinking about something
public-private partnership - Same as "PPP"
venture -
a new business or experimental project by a business
raison d'etre -
a reason for being
replace - to get rid of something and put a thing in its place เลิกให้และนำสิ่งใหม่มาใช้แทน

creation - the act of making something new การสร้าง
Telephone Organisation of Thailand (TOT) - a Thai state-owned telecommunications company. Originally established in 1954 and corporatized in 2002, TOT's main line of business is fixed line telephony, although it has several other businesses, including mobile telephony. (See Wikipedia) (ทีโอที)

concession - official permission from the government to do a certain type of business สัมปทาน
proposal - a plan or suggestion for a group to consider ข้อเสนอ

imposed - force someone to do something or follow some rule
regulations -  rules made by the government to control how some activity is done ระเบียบปฏิบัติ, ข้อบังคับ
safeguard - protect ป้องกัน
the public interest - the interest that the public has in things being done to benefit them
feasibility studies - a study and report to see if some project is possible
National Economic and Social Development Board (NESDB) - the government organization in charge of long-term economic plannning in Thailand
X tasked with Y
- X given task Y to do
ascertaining whether -
finding out if, discovering if
fit in with - be match and work well, suitable or apprpriate with
justify - to show that there is good reason for something แสดงเหตุผลที่ดีพอ
priorities - the most important things that you must do first (before other less important things)
approval - official permission การอนุมัต
commit funds - promise money for some project
drafting - writing
terms - conditions; requirements ข้อกำหนด
terms of the contract - details and conditions in a contract
bind X to Y - make or force X to do Y (not doing Y is not an option)
concession holder - the owner of a concession
contractor - a person or company whose job is to do work for another person, organisation, company, etc. ผู้รับเหมา

politicians of all flavours - all kinds of politicians
outlined - explained in a general sort of way
effectively - working well and producing the results that they wanted
transfers - changing the location of a person's work (for example, transferred to work in a different province) โอน โยกย้าย
power - energy in the form of electricity produced in large quantities and used to operate lights, machines, and heating
authority - the power to make decisions or tell people what to do อำนาจ, อำนาจในการสั่งการ
technocrats - an engineering or science expert with power in government and/or industry วิศวกรหรือผู้เชี่ยวขาญพิเศษ
objective - what you plan to achieve; goal; aim; purpose เป้าหมาย
initiate - to cause something to begin, make something start ริเริ่ม
award - to official give someone a contract ได้รับ
vet - check, examine and screen carefully to ensure acceptability, preliminary step before a final choice (See glossary)

scope of the law -
the number and variety of cases that the law applies to
X left to the discretion of Y - decision X has been given to Y to make
root of the problems - the first cause of the problems
complicate - make more difficult to understand and work with

elements - sets or groups of people องค์ประกอบ
lack - does not have ขาดแคลน
lack clarity - is not clear, is not easy to understand
confusion - situation where people don't know what is happening and what they should do
plentiful - lots available
extensive - includes a wide variety ที่มีมากมาย
efforts - people trying to accomplish something, achieve a goal, the work done towards achieving some goal ความพยายาม
spotlight - the centre of public attention เป็นที่สนใจ
trigger point - the point (here: amount of money) which starts something happening (here: a rule)

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