The Mass Rapid Transit Authority of Thailand (MRTA) has set up a panel to look into a contract dispute surrounding the construction of an extension of its Blue Line electric rail route.
The move came after the Office of the Auditor-General (OAG) sent the MRTA an urgent letter opposing the MRTA's decision to pay an additional construction cost of 290 million baht to the contractor, an MRTA source said.
The extra cost of construction has been incurred because Ch. Karnchang Pcl, the contractor, had to change the method for constructing the Blue Line's extension from Sanam Chai to Tha Phra which now includes a tunnel, the source said.
The OAG, the source said, argues the MRTA might have to go to court to seek the return of the 290 million baht it has paid to the contractor.
The MRTA has set up the panel to look at its rights under the contract and its chances of getting the money back.
It argues the MRTA was in a position to cite some conditions stated in the contract to force the contractor to shoulder the extra cost on its own.
An OAG source said the contractor claimed it had discovered during the construction of the tunnel that the soil layers were different from what it understood them to be at the time it won the contract.
The contractor then requested permission from the MRTA's committee overseeing this project to switch from the "de-watering" technique of construction to the "blanket grouting" technique, the OAG source said.
The request was made under condition No.17 of the contract which may allow the contractor to charge the MRTA an extra cost of 290 million baht and extend the construction period by 90 days, the source said.
The OAG, however, disagreed with the MRTA and the contractor citing condition No.17 and said the contractor in fact should have paid for the extra construction cost and any delay, the OAG source said.
The OAG insisted the MRTA was in a position to cite condition No.13 of the contract to refuse to pay the 290 million baht in extra construction costs, the OAG source said.
It is the contractor's responsibility to survey the site before signing the contract and since this matter arose after the contract was signed the contractor must be liable to shoulder the extra cost, the OAG source said.
The contractor was also liable to pay a fine of 7 million baht a day for the delay in construction, said the OAG source, citing the contract.
"We need more time to verify facts and interpret the legal matters in this case. The MRTA will report back to the OAG after the investigation is completed," the MRTA source said.
The MRTA source, however, said since the construction of the Blue Line tunnel is now complete and the MRTA had approved the inspection of the tunnel, the MRTA will have to discuss the matter with the contractor. Payment was made after the MRTA approved the job that was done.