Thai khemkaeng in Chiang Mai

The government’s propaganda arm, the MCOT, reports on Thai khemkaeng projects from deep inside red shirt stronghold Chiang Mai (16 December 2009: “Bright investment outlook for Chiang Mai”).

While Chiang Mai might be a “political stronghold of Thailand’s former prime minister Thaksin Shinawatra, convicted of misusing the power of his office,” the MCOT tells its readers that the “investment outlook seems brighter in the year to come…”. Why is this? MCOT explains that it is “thanks to the government and private investments.”

The government has “at least five big projects are set to get off the ground next year, including an international exhibition and convention centre project … [and] a development project for road expansion to facilitate agricultural transport, a logistics system and a project to improve a local bus terminal in the provincial seat to support millions of incoming tourists.”

These projects “have a budget of over Bt3 billion (some US$90 million) from the government’s Strong Thailand Project, of which Bt18 billion (US$545 million) is allocated for the province…”.

The president of Chiang Mai Chamber of Commerce is happy about the budget from the Strong Thailand Project, claiming that ” Bt4 billion ($121 million) has already been distributed to various projects here…”.

Big beneficiaries of this Thai khemkaeng investment are said to include “two big [real estate development] companies from Bangkok and Dutch investors planning  to “extend abut Bt3 billion ($90 million) for construction of a large department store…”.

The Abhisit Vejjajiva government continues to hope that pouring funds into “local” areas will improve the economy, create jobs and translate into votes. This is seen in the approach to the northeast (Bangkok Post, 18 December 2009: “Democrats set out plans for Northeast”), where the opposition Puea Thai Party is very strong but where the “Democrat Party is looking into extending the debt moratorium for village fund members as a means to woo northeastern voters…”. It also plans to increase funding to village development funds and to expand the  railway network.

Leading the charge are Deputy Prime Minister Korbsak Sabhavasu (already the subject of major corruption allegations associated with various government spending projects), Democrat deputy leader Kraisak Choonhavan (who only joined the party just prior to the last election),  and Democrat list MP Somkiat Pongpaiboon  (one of the leaders of the People’s Alliance for Democracy, which now has its own New Politics Party). The Democrats also “showcased government projects such as the Thai Kem Kaeng (Thailand: Investing from Strength to Strength) scheme to stimulate the economy.”

Sound familiar? Remember the criticisms made of the Thaksin Shinawatra government accused of “policy corruption” that was considered the equivalent of vote buying? That kind of criticism was made by each of the Democrat Party politicians listed in the previous paragraph.

Bright investment outlook for Chiang MaiThe global economic downturn coupled with several of political turbulence have marred the investment atmosphere in Chiang Mai, a political stronghold of Thailand’s former prime minister Thaksin Shinawatra, convicted of misusing the power of his office, but the northern city’s investment outlook seems brighter in the year to come thanks to the government and private investments.

In the public sector alone, at least five big projects are set to get off the ground next year, including an international exhibition and convention centre project on a piece of land covering over 300 rai (about 120 acres). There is also a development project for road expansion to facilitate agricultural transport, a logistics system and a project to improve a local bus terminal in the provincial seat to support millions of incoming tourists.

All these will have a budget of over Bt3 billion (some US$90 million) from the government’s Strong Thailand Project, of which Bt18 billion (US$545 million) is allocated for the province, while provincial authorities expect to generate more employment and income to stimulate the local economy.

According to the president of Chiang Mai Chamber of Commerce, the budget from the Strong Thailand Project is one factor that will help improve the economy of Chiang Mai.

“As the budget for this project has been allocated mainly at the local level here in Chiang Mai, there’ll be more investment and construction for the primary infrastructure. Now Bt4 billion ($121 million) has already been distributed to various projects here,” said Narong Kongprasert, president of the Chiang Mai Chamber of Commerce.

Meanwhile, the vice president of the Real Estate Entrepreneur Association of Chiang Mai and Lamphun viewed that the property business in the region is outstanding and continues growing in this year’s last quarter following signs of economic recovery.

“The tendency of the housing development market in Chiang Mai this year hasn’t actually gone down,” said Paisan Phucharoen, the association’s vice president.

“Although there were problems of Thailand’s internal politics of colour codes in the beginning of the year, the economy in Chiang Mai in 2010  could in fact be vigorous, for I heard that there are two big companies from Bangkok which came to buy and plan to develop land here in the province.”

To show signs of the positive investment tendency, an instance of the private sector’s big investments is due to the fact that around Bt1.2 billion (some $36 million) has recently been invested in a housing development project, set to be completed early next year on a piece of land connecting Chiang Mai’s provincial seat and Hang Dong district, an area considered a prime location for real estate developers, and where other several projects are also under construction.

Also, as a city of undoubted potential, Chiang Mai has recently attracted a group of Dutch investors to extend abut Bt3 billion ($90 million) for construction of a large department store to be targeting over 14 million northern Thais.

From all investments planned ahead, the city has guaranteed itself that for the year to come it is still a jewel for many who love to discover more of this land called the ‘Rose of the North’ filled with its Lanna culture. (TNA)

Features : Last Update : 17:46:29 16 December 2009

Industrial and infrastructure projects

This post is related to an earlier one on Thai khemkaeng.

Not everyone is happy to receive infrastructure and industrial projects. The Bangkok Post (9 December 2009: “Coal plant fuels Section 67 protest”) reports that villagers in Chachoengsao are continuing their protests against the building of a coal-fired power plant. Prachatai (7 December 2009: “Locals say no to second deep sea port in Songkhla”) also reported opposition to a deep sea port and a planned petrochemical industry in Songkhla. Both groups have linked their claims to the massive problems at Map Ta Phut.

The Democrat Party-led government is desperate to get such projects going as it thinks its electoral fate depends on an economic recovery. Its response to Map Ta Phut has involved getting royalist, industrialist and former unelected prime minister Anand Panyarachun involved.

The Nation (12 December 2009: “List of harmful industrial activities due next week: Anand”) reports that Anand heads a small committee that will report a “list of industrial activities that seriously damage the environment, health and communities … at the end of next week…”. This sounds very much like closing the gate after the horse has bolted.

Anand’s panel is sorting out two different lists of dangerous industries: “one produced by the Industry Ministry, which in September announced a list of eight harmful activities; and another proฌposed by Thongchai Phansawat, an engineer and senior pollution expert who is an adviser to the Natural Resources and Environment Ministry. His list contains 19 damaging activities.” The committee is also reported to have “agreed to revise environmental impact assessments (EIAs) and health impact assessments (HIAs) but did not say how these would be improved.”

Anand also said a “preliminary resolution to the Map Ta Phut dispute will also be finished by the end of this month…”. This seems likely to involve the hasty formation of an “independent environmental and health organisation” that will report to the Office of the Prime Minister “in order to help the economy move forward.” According to a report in The Nation (15 December), “The owners of 19 energy projects in Map Ta Phut and nearby areas in Rayong stand to suffer opportunity losses amounting to Bt88.7 billion a year.”

And here’s the link to Thai khemkaeng: Prime Minister Abhisit Vejjajiva “expressed concern that Thongchai’s list would affect the government’s Thai Khemkhaeng … stimulus package and the nation’s economic recovery.”

For more background on Map Ta Phut, see Chang Noi (14 December2009: “Landmark judgment for people, environment, and the rule of law”).

Forget corruption

Just a few hours ago, PPT blogged: “The Democrat Party-led government has continued to sweep corruption allegations under the carpet, mainly because the media are in it pocket. This of the sufficiency economy projects, the Ministry of Public Health, Ministry of Education and other cases and allegations, and all of them seem to have fallen into the great void of nothingness that is the government’s effort to root out corruption. If any reader ever sees anything on these cases, let us know.”

As if to confirm PPT’s perspective that corruption is being swept under the carpet, the Bangkok Post (13 December 2009: “Quick spending urged”) reports that Kan Trakulhoon, president of the Crown Property Bureau’s industrial “crown jewel” the Siam Cement Group (SCG) has called for faster spending. He wants government spending on the Thai khemkaeng projects to be “accelerated to help support economic recovery and ease pressure on the baht to appreciate…”.

SCG is also the main company involved in the ongoing and horrendous pollution problems at Map Tha Phut, seemingly causing new illnesses every day. The SCG president admits that this is a problem for the group: “Private investment has remained weak due to excess production capacity, economic uncertainties and an unfavourable investment climate, highlighted by concerns over political stability and the suspension of major industrial projects in Map Ta Phut.”

He wants the Thai khemkaeng projects that promise 1.43 trillion baht for “tens of thousands of infrastructure projects nationwide through 2012, ranging from improvements to community hospitals and schools to new Bangkok mass transit systems and logistics and rail improvements” to be sped up. His company would benefit more than any other as they are the major suppliers of construction materials, not least all the cement that would be poured into infrastructure.

Not a mention of the corruption allegations that have dogged these projects from Kan or from the Bangkok Post. How big is that carpet and will the broom be big enough?

Abhisit blames officials for corruption

In the Bangkok Post (19 October 2009: “PM promises headhunt for bent officials”) Prime Minister Abhisit Vejjajiva has stated that corruption in the Thai khemkaeng (Strengthening Thailand) stimulus scheme will be rooted out. He says that the “heads of any government agencies linked to corruption” will be held responsible.

With “procurement contracts … signed and the budget … disburse[d]” the premier is fretting about the Public Health Ministry’s 86 billion baht purchase of medical supplies and the stain this is leaving as corruption appears to have been rampant. But the “prime minister gave assurances that efforts to tackle corruption have always been a government priority.” He says that his Democrat Party-led government is “serious about fighting corruption.”

Why should anyone believe him?

He has been slow in responding to each major allegation and is very reticent to even acknowledge claims regarding the Education ministry. Abhisit seems to have covered up the corruption in the Office for Sufficiency Economy Community Projects. There a Democrat minister was running the show. At the MOPH there is also a Democrat minister. They haven’t suffered and Abhisit wants to blame officials rather than his own ministers. The MOPH investigations have been tainted by the appointment of pro-Democrat Party investigators.

Investigating corruption while protecting Democrat Party ministers is hardly likely to build confidence. Blaming officials while sparing ministers is simply partisan. As we have said for several weeks now, in the end, this is political dynamite set to be ignited.

Updating ISA and medical scam

There has been a spate of interesting reports today on a range of subjects. In this post PPT updates two stories we have been following, the repeated use of the Internal Security Act and the corruption allegations involving the government’s stimulus package.

Internal Security Act overkill: In a recent post PPT asked why it was that the Internal Security Act was being used in Bangkok for a red shirt rally. We pointed out some inconsistencies. Now we are told that the Democrat Party-led government is deploying 18,000 security force personnel in Bangkok and a similar number in Hua Hin, where the ASEAN summit is located ( Bangkok Post, 15 October 2009: “Massive summit force gets nod”).

An earlier report in the Bangkok Post states that Deputy Prime Minister Suthep Thaugsuban,” who is in charge of security affairs, was assigned to be director of the Bangkok peace-keeping command.” He said” 6,000 police, 10,000 soldiers and 2,000 civilian volunteers will be deployed … from Oct 15 to Oct 25 in the wake of the United Front for Democracy against Dictatorship (UDD)’s plan to rally on Oct 17 and hold a no-confidence debate against the government outside parliament.”

“Civilian volunteers”? PPT wonders who this might be? Right-wing vigilantes  or something less threatening?

Suthep stated that “Attention will be given specially to Government House, parliament and Chitrlada Palace.”

That’s a total of 36,000 security personnel mobilized. Even leaving aside the questions of human rights and intimidation, this is clearly way, way more than would be reasonable for controlling a rally that the government estimates will be “about 10,000 people.”

The Post says this is to “ensure peace and order.” The government is not expecting the planned rally to be violent. So why this huge number of police and military? Is the government wasting money or does it have “intelligence reports”? Why are 2 security personnel required for each expected demonstrator?

PPT has no answers that we haven’t given before.However, this kind of mobilization is suspiciously large. If we were being really cynical and conspiratorial, we’d be tempted to link to an earlier post.

Corruption in MOPH procurement: The Nation (15 October 2009: “Witthaya’s new committee to study medical equipment scam”) reports that Public Health Minister Witthaya Kaewparadai has “decided to set up a new independent committee with members from outside the ministry, to probe irregularities in the procurement of medical equipment under the Bt86-billion Thai Khemkhaeng package.”

Witthaya said he “decided to set up the new independent committee after being criticised over an announcement yesterday – by the ministry’s fact finding committee led by Dr Seri Hongyok – that some senior health officials had been involved in the scandal.”

PPT wonders why an independent committee has taken so long to be established? We also observe that new committee will be led by former Bangkok senator and one-time but short-term police chief, Police General Pratin Santiprabhob. He was a leading anti-Thaksin critic prior to the coup and was a PAD supporter.  Stacking the committee, perhaps?

The Rural Doctors Society’s has expressed some reservations on this appointment and “questioned whether his relationship with the Democrat Party would influence his approach to the investigation.” It also criticized “the ministry’s announcement on October 13, revealing that a retired senior health official and senior health official were involved in the scandal, was not fair as politicians were also involved in the purchase irregularities.”

Pratin of course dismisses any allegation against him and potential favoritism. Yes, he “accepted he knew people among the Democrats as well as in other political parties.” He said: “Don’t question me about my work before you see the results of the investigation…”.

Sounds like a cover-up is planned.

Its big, its corrupt, and the government wants it

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PPT is drawn again to the Strengthening Thailand (Thai khemkaeng) project. As we have mentioned previously, we think this is an important issue that is intimately related to the Democrat Party-led coalition government’s preparations for elections. At the same time, if the allegations deepen, they will undoubtedly threaten the coalition.

The Bangkok Post (13 October 2009: “PACC to look into stimulus graft claims”) has some interesting reporting on the projects that indicate that they remain critical for the government.

Despite the continuing allegations of massive corruption, the Finance Ministry is seeking cabinet endorsement for  “additional spending of 240 billion baht for the Thailand: Investing from Strength to Strength scheme.” If approved, Finance Minister Korn Chatikavanij said “expenditure would reach 1.3 trillion baht, out of the total 1.43 trillion baht allotted until 2012…”. Of this, 800 billion baht was to come from loans.

So significant is this project for the government that PM’s Office Minister Sathit Wongnongtoey confirmed that “although the first-phase Thai Kem Kaeng project was plagued by corruption allegations, the government would consider approving its additional spending…”.

Sathit said the “government will ensure transparency in the first phase and will not protect any wrongdoers. In the meantime, it must proceed with the second phase because the stimulus project will benefit the public.He said it was the biggest investment project in the country in more than 10 years and it should not be interrupted with any groundless accusations; otherwise, the stimulus process would stop and Thailand would become inferior to other nations in the same region…”.

Sathit knows that the allegations are not “groundless” but the government is convinced that pumping funds into the economy will bring electoral success. At the same time, politicians need spending in order to prepare for electoral campaigning. Expect corruption allegations to be increasingly commonplace over the next 7-9 months.

Is Abhisit serious?

When PPT posted this story, we were giving attention to corruption allegations. The headline was “Is Abhisit serious about graft?” In this updated post, we extend this story to include the premier’s comments on constitutional amendment and have changed the headline to the simpler “Is Abhisit serious?”

Corruption allegations: Prime Minister Abhisit Vejjajiva always knew that the graft allegations about the the Ministry of Public Health’s procurements as part of the “Strengthening Thailand” (“Thai Khemkaeng”) stimulus spending was going to be tougher to deal with than those regarding the Office for Sufficiency Economy Community projects. As PPT has pointed out, the MOPH allegations came from the Rural Doctors Society, a group that has considerable respect. It might even be seen as a Democrat Party ally.

He has also realized, more than 3 weeks after the allegations were made, that the fallout from these allegations of corruption in the 86 billion baht project in a ministry headed by a Democratic Party minister is potentially very damaging. This probably explains why the premier has come out to explain that his government is serious about the graft claims (Bangkok Post, 12 October 2009: “Graft inquiry shows we’re serious – PM”)

Attempting to turn a negative into a positive, Abhisit lamely says that the government’s investigations of “alleged irregularities under the economic stimulus package at the Public Health Ministry would show how determined the government is in fighting corruption…”. He added: “I want to prove to the people that my government is determined to make state projects corruption-free…”.

Meanwhile, MOPH minister Witthaya Kaewparadai has vowed to “push ahead with the scheme.”

PPT would find Abhisit’s claims more convincing if he’d adopted a similar attitude to the corruption and nepotism in the Office for Sufficiency Economy Community projects. He seems to have buried that investigation. We wonder, too, if the allegations regarding similar issues in the Ministry of Education will be investigated? If he is to be taken seriously, Abhisit needs to show that he is prepared to deal with all difficult allegations.

Constitutional amendment: Prime Minister Abhisit has been conducting an odd campaign on constitutional amendment, appearing to be for it but engaging in considerable foot-dragging. The Bangkok Post (12 October 2009: “PM goes cool on charter change”) follows up on earlier reports that the PM was backing away from amendment. Now Abhisit is reported to have said that amendment may be unnecessary.

This is no surprise. PPT does not consider Abhsit to have ever been serious about meaningful change to the military’s 2007 constitution. There are several reasons for skepticism.

First, in the Bangkok Post of 16 August 2007, before it went to a referendum, Abhisit stated that his party accepted the new constitution. He is reported to have said that the draft was acceptable: “because it wanted the country to move ahead. Accepting the draft constitution would given some sense of political stability with a timeframe set out for issuing organic laws, he said. The party could not predict which constitution would be picked if the draft was rejected. Mr Abhisit said the draft and the 1997 constitution did not differ much from each other as both emphasised people’s rights and freedoms, and checks and balance mechanisms. They did differ regarding the origins of cabinet members and MPs. However, the draft was not as flawed as some people feared.”

Second, Abhisit has been lukewarm on the proposed amendments all along, seeking ways to delay an election for as long as possible. Even if the opposition agreed and amendments were accepted, the process of change was likely to take 9 months.

When opposition emerged, he immediately returned to his 2007 position, stating that the 2007 constitution is satisfactory. His reason: if enough parties disagree with the changes, leave it alone. He said: “If the PAD (People’s Alliance for Democracy) and the opposition disagree with it, why should it continue?” He’s known that PAD were opposed from the beginning.

He also said that ” the 1997 charter was problematic, leading to the enactment of the 2007 charter.” Yes, forget all that military coup stuff and the fact that the military and its friends in the palace wrote a new version.

Abhisit is not serious about constitutional change.

Corruption in public health and education

PPT has recently posted on what we called “a case to watch.” The case we wrote of was headloined in the The Nation (28 September 2009: “Public health ministry to set up factfinding committee”). There is was reported that the government’s much-heralded “Thai Khemkaeng” (Strengthening Thailand) project was in trouble over corruption. This is the government’s headline stimulus program with almost 1.6 trillion baht to deliver, and with its own website.

The Nation (6 October 2009: “Minister’s advisers quit in wake of buying scandal”) now reports that each and every one of the eight advisers to Public Health Minister Witthaya Kaewparadai have resigned. This should be a huge story.

While they said that this was to allow the minister “a free rein to counter a scandal over the alleged rigging of purchases in a Bt86-billion project,” it is clear evidence of corruption.

Dr. Thawat Suntrajarn, one of the advisers stated: “We are uncomfortable with the scandal. We want to show we are by no means involved in the alleged irregularities.” This was in response to rumors that “close aides of Witthaya were colluding to profit from purchases planned under … Thai Khemkhaeng…”.

Meanwhile, “six officials from the Auditor General’s Office met yesterday with Dr Kamron Chaisiri, who oversees the project, to seek more information.”

Witthaya said he had no great knowledge about medical devices so that he had “to rely on senior public health officials and inspector generals….”.

Clearly Witthaya has been duped or is somehow involved. This is a potentially disastrous scandal for the Democrat Party and Prime Minister Abhisit Vejjajiva is noticeably quiet.

In another report in the Nation (6 October 2009: “OBEC dismisses education corruption charges”) it is reported that the opposition sees and opening to weaken and tarnish the government. They have targeted the Thai KhemKaeng project in the Education Ministry.

Puea Thai Party spokesman Prompong Nopparit “claimed OBEC officials based in Nakhon Ratchasima had expressed suspicion about certain procurement deals. Examples included promises of high priced auditoriums for schools requesting new buildings, while others were promised equipment – also highly priced – they did not want.”

The Ministry has blamed “school managements’ confusion over the process,” a claim also made in the sufficiency economy office scandal.

These remain stories to watch with interest.

OBEC dismisses education corruption charges

Published on October 6, 2009

The government’s Thai KhemKhaeng project has drawn another Opposition allegation of corruption in the procurement process, this time targeting the Education Ministry.
A statement by Pheu Thai Party spokesman Prompong Nopparit yesterday was dismissed by Kasama Worrawan na Ayutthaya, secretary-general of the Office of Basic Education Commission (OBEC), saying the procurement process would not be finished until next week.

Prompong claimed OBEC officials based in Nakhon Ratchasima had expressed suspicion about certain procurement deals. Examples included promises of high priced auditoriums for schools requesting new buildings, while others were promised equipment – also highly priced – they did not want.

“This entire matter could have been prompted by school managements’ confusion over the process, or based on their own speculation about alleged corruption,” Kasama said.

The government is already subject to Opposition scrutiny into a number of procurement deals made by the Public Health Ministry, also through the Thai KhemKhaeng project. Allegations are being directed against the Democrat-led government and Minister Jurin Laksanawisit, a party executive, that items being offered are overpriced and don’t match hospital needs.

As for OBEC’s policy, government schools will be provided with only three major installations: a centre for career development of teachers, a technology-based information centre, and other installations including toilets, Kasama said.

For equipment, all schools are to be provided with items listed in individual menus for their selection. Median prices and specifications of those items are based on experts’ recommendations, minimising the chance of bid-rigging, she said.

Jurin said all of his policies were transparent and he would welcome tip-offs over irregularities.