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FOCUS: Long-delayed Thai airport project causing headaches.

BANGKOK, Nov. 22 Kyodo

A 120 billion baht ($2.72 billion) airport project in Bangkok, put on and off over the past 40 years, has hit yet another snag.

Now a delay over which of two potential designs to use -- one by a U.S. firm and the other Japanese -- is putting the 2004 opening target in jeopardy and attracting wide public interest, due to allegations of a lack of transparency and mismanagement of the process.

The new Bangkok international airport, located at Nong Ngu Hao, southeast of the capital, is intended to replace the overcrowded Don Muang airport and is expected to handle 35 million passengers per year.

A delay would threaten Thailand's aim of becoming a regional aviation hub and would allow neighboring countries such as Singapore and Malaysia to take over the goal.

In 1995, the government's Airport Authority of Thailand hired U.S.-based Murphy Jahn Tams-Act (MJTA) as project designer, which came up with a plan for the terminal and concourse.

Everything seemed to be going according to plan, but early this year New Bangkok International Airport Co. (NBIA), which was set up in 1996 to oversee the project, decided to have a second design prepared by Japanese firm Pacific Consultant International (PCI), saying the original design is unlikely to meet the 45.7 billion baht construction budget.

Then, in an unusual move, the NBIA allowed construction firms to bid on both designs, and in late September two successful bidders for the MJTA design -- one each for the terminal and concourse -- came in with bids totaling 8.8 billion baht over budget. The bidding for the second design remains open.

However, an NBIA source said mismanagement and the inability of an NBIA evaluation committee, comprising company and government officials, to examine the MJTA design led to overpricing.

''It's inefficiency of the committee. The committee members keep changing and it's hard to find a real expert,'' the NBIA source said.

On the other hand, the PCI design, which is believed to be much cheaper, has been widely criticized because it is based on a design-and-build as-you-go basis, meaning the actual cost of the project could be much higher.

In addition, some argue it may be a favor to Japanese contractors, as most of the loan for its construction, 84.1 billion yen (33.6 billion baht), is from the Japanese Bank for International Cooperation (JBIC).

A government source said the MJTA design, which specifies certain suppliers and materials, would give less room for kickbacks, while PCI's so-called ''fall-back design'' would allow more chances for the process to be corrupted.

The source added there may be pressure from the U.S. government to go with the MJTA design.

Despite initially pushing for the second design, the NBIA has done an about-face and, after failing to renegotiate with the two lowest bidders to reduce the construction costs, requested the MJTA modify its design to meet the budget targets.

In addition, the JBIC has said it will not increase the value of the loan.

The MJTA submitted its modified design around mid-November, and the NBIA board is now seeking the JBIC's approval to redo bidding on the new design.

According to MJTA representative Brian O'Connor, the company has substantially adjusted the design to allow more local products and cut some unnecessary parts. He said he believes the modifications could put the construction cost to within budget.

The NBIA source, however, said there is still the possibility of switching to the fall-back design if the new bids result in the cost remaining over budget.

''The not completed yet,'' the source said.
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Publication:Asian Economic News
Date:Nov 27, 2000
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