OVER FOUR YEARS AGO when the new airport opened, there was a storm of allegations over corruption. There was the small matter of a Bt1.71 billion gap between the purchase price and the selling price for the CTX baggage scanners. But there were others too: a Bt1 billion contract for ground services awarded to a Singapore-registered company whose owner was traced to a derelict house in the Bangkok suburbs; Bt4 billion for wiring and ducting to a company with no track record; half a billion for luggage trolleys of unbelievably clunky quality; Bt5 billion for operating security guards; Bt3 billion for limousine services; an allegation that Thaksin’s sister demanded a bribe of Bt300 million for the car park concession; an advertising concession to Thaksin’s son; and an Bt8 billion contract for building drains allocated to the family of another minister. After scrutinising the contracts, the auditor-general, Jaruvarn Maintaka, reckoned that the defalcation was consistent and large.
What has happened with all these allegations? When Jaruvarn joined the Assets Examination Committee after the coup, she told the press that the CTX case would go to court in three days. That was almost two-and-a-half years ago. Officials have muttered about the difficulty of translating all the documents received from the US. You don’t need to translate names.
When the airport opened, somehow it hardly seemed like an airport, more like a shopping megamall with an airport theme for the decor. It was easy to find the perfume counter, but very difficult to thread your way to Immigration. When you left the glitzy shops and entered public spaces like the toilets, it was like crossing from the first world to the third.
After the 2006 coup, a new board at the Airports of Thailand (AoT), headed by General Saprang Kalyanamit, revealed some extraordinary allegations: King Power, the company that had the concession to develop the retail areas in the airport, had allegedly occupied just over twice the area specified in its contract; in the process, it had obscured signage, blocked emergency exits, and made toilets and other facilities very hard to find.
A KING-SIZED SLICE
King Power had gained a 10-year exclusive right to handle duty-free sales and oversee the whole retail area without any competitive bidding process at all. In 2004, King Power asked AOT to extend its duty-free contract at Don Mueang airport for a longer period, and to expand the contract to include Suvarnabhumi. The Council of State ruled that this procedure was improper, and that there should be a competitive bid for the Suvarnabhumi concession. That never happened.
An airport is like a moderate-sized city centre. Over 100,000 people pass through Suvarnabhumi Airport every day. In effect, one company was put in charge of the commerce of this city.
The AOT board revealed more. Any contract worth over Bt1billion falls under the provisions of the Public-Private Joint Venture Act which demands annoying things like competition, transparency, and proper public scrutiny. To evade this, the Suvarnabhumi retail concession was allegedly split into two contracts, each under the billion bar. Under a PM’s Office order of 2002, any deal over the airport required Cabinet approval. That too never happened.
Finally, the AOT board alleged that King Power had put up a building next to the terminal to house its own offices and a restaurant; the permission for this building was given by a sub-committee that had no such authority; for some reason, the AOT had asked for no recompense from King Power; the building was located on space designated for later expansion of the terminal; and the building made it possible for people to enter the terminal without passing through security.
UNBREAKABLE GOLDEN EGGS
In March 2007, the AOT board ruled that the contracts with King Power were illegal and thus void. In August it ordered King Power out of the airport. In November, it resolved to terminate all arrangements with King Power. And in January 2008, it was preparing to petition the attorney-general to throw King Power out of Suvarnabhumi.
But King Power is still there. The retail space does not seem to have shrunk by one square centimetre. With a compass and good map-reading skills, you can now find a toilet. By trial and error you can find your way out to Immigration, but still risk being sprayed by a duty-free perfume saleslady on the way. The revenue from King Power’s airport concession in 2007 was Bt12.7 billion. That’s a lot of golden eggs.
King Power responded to the AOT board’s attacks by launching a slew of counter-suits. In February, it won an injunction against its eviction from the airport. More importantly, in March 2008 the Samak government appointed a new AOT board. After that, all King Power’s problems seemed to disappear like perfume evaporating off the skin. The new board resolved to find ways to make its contracts with King Power comply with the law (!).
But when Samak and then Somchai crumbled, King Power faced another change of government, and potentially another change in their legal fortunes.
During the negotiation between Suthep Thaugsuban and Newin Chidchob that created the current coalition, there was reportedly a third person in the room - Vichai Raksriaksorn, the head of King Power. Seemingly from nowhere, Vichai has risen in a very short time to become Thailand’s 21st richest man, valued at around Bt7 billion before all such wealth began to shrink. The meeting took place in his Pullman King Power Hotel in the city. Perhaps he was there as a courteous host, checking on the flower arrangement and chivvying the coffee waitresses. Perhaps not.
Perhaps he was just a mutual friend. He had to deal with Suthep as transport minister in the late 1990s. Reportedly Suthep helped him out over some difficulties at Don Mueang. Newin had adopted Vichai’s hotel as his Bangkok base, and had reportedly become a friend.
The golden land and its golden geese still play a bit part in Thai politics.