Stoking the flames of corruption

Stoking the flames of corruption

An excerpt from Tuesday's Supreme Court ruling on the fire trucks and boat procurement scandal reveals how acts of corruption were committed.

On whether the deal was normal: The court has to decide if the fire truck and boat procurement was against the 2004 cabinet resolution which specified the terms for a reasonable barter deal between Thailand and Austria.

The court based its judgement on testimony by former interior minister Wan Muhammad Nor Matha in June 2003.

According to the testimony, the Austrian ambassador to Thailand at that time proposed a barter trade for 154 million worth of fire equipment from Austrian firm Steyr [in exchange for agricultural products from Thailand].

The deal would be 100% government-to-government, with Austria securing a source of funding for the project as well.

A witness from the plaintiff's side [the National Anti-Corruption Commission], however, told the court that under the cabinet's resolution the fire equipment project would be 60% funded by the government, with the Bangkok Metropolitan Administration taking up the remaining 40%.

This indicated that the project's financing did not comply with Austria's original proposal.

On whether the fire equipment was overpriced:

Compared to similar equipment procured by the Disaster Prevention and Mitigation Department, the fire boats and trucks procured by the BMA are more expensive.

For fire trucks with 18-metre ladders, the BMA paid 154 million baht more.

For fire trucks with water tanks, it paid 2.225 billion baht more.

For light trucks, it paid 71 million baht more.

For trucks with fire extinguishing chemicals, the BMA paid 396 million baht more.

An expert witness compared the BMA's procurement with benchmark prices and found that overall, Steyr made a 2.1 billion baht profit from the project.

The defendants may argue that products made from different manufacturers cannot be compared, but state procurement must be done with the national interest at heart.

This particular case concerns fire trucks and boats which are specialty goods that must comply with international standards. Even though they are made by different manufacturers, their prices must be comparable.

The court found the fire trucks and boats that the BMA bought from Steyr were grossly overpriced.

On the roles of former deputy interior minister Pracha Maleenont and former city fire police department chief Athilak Tanchukiat in the scandal:

According to an account provided by a witness who served as an adviser to Pracha, Pol Maj Gen Athilak took Steyr representatives to meet Pracha who oversaw the BMA at that time to push for the fire equipment procurement project before it was approved.

The use of Thai agricultural products as a condition for the barter deal was meant to help release overstocked goods under the One Tambon One Product (Otop) scheme, which Pracha supervised, the witness told the court.[In the end, the BMA entered into the barter deal with Austria by exchanging boiled chickens for 315 fire trucks and 30 fire boats].

Pol Maj Gen Athilak backdated his procurement proposal so that it could be submitted to the cabinet before then-Bangkok governor Samak Sundaravej was set to end his term.

His price quotation was the same as that proposed by Steyr to former interior minister Wan Muhammad Nor Matha a year before the project got off the ground. This indicated that the procurement had been fixed even before the cabinet passed its resolution.

The deal reflected more of the company's wish to sell its products than the BMA's need for fire equipment. In fact, the witness said that the BMA lacked the personnel to effectively man the number of fire trucks it purchased.

If Pracha did not have any role in pushing for the fire trucks' purchase, he would not have joined a study trip to Austria [with Pol Maj Gen Athilak]. Even though he denied it, the evidence _ group photos of the visit and flight schedules _ proved otherwise.

Pracha was involved with the project from the start. The court believes without reasonable doubt that the project proposal drafted by his adviser was based on the prices that Steyr offered and not the real needs of the BMA.

When former Bangkok governor Apirak Kosayodhin asked the Interior Ministry to review the project, Pracha, who acted in the minister's capacity at that time, rejected the request and instead pushed Mr Apirak to open the Letter of Credit immediately to complete the deal.

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