Govt Ditches Open Bidding to Gift Megaproject to Developer

A concept design for Bangkok Observation Tower. Image: Bangkok Observation Tower Foundation

BANGKOK — The government on Tuesday exempted construction of a multi-billion baht tourist attraction from mandatory competitive bidding, saying such a hassle might cause delay.

Rather than open bidding, which is required for firms that invest in government projects, construction of the upcoming 459-meter high Bangkok Observation Tower was directly handed over to a private entity linked to a luxury high-rise complex being built right next door.

“If we open it for bidding to find a private developer, I don’t know if anyone would be interested, because the project value is quite high,” Finance Minister Apisak Tantivorawong told reporters Wednesday. “And they wouldn’t know if it would be worth their investment.”

Private companies that invest with the state are typically required to compete with other firms in open bidding to ensure transparency and discourage graft.

Under the agreement approved by the cabinet, a plot of land owned by the treasury department will be leased to a private entity called Bangkok Observation Tower Foundation over the next 30 years at the fee of 198 million baht – about 6.6 million baht per year. The landmark is located in the Khlong San district on the west bank of the Chao Phraya River.

The Bangkok Observation Tower Foundation has no website or listed phone number.

Media reports named its chairman as Panas Simasathien, a veteran businessman who’s serving as a board director of Siam Piwat group, a land developer behind Siam Paragon and Siam Center shopping malls.

The same developer is also building a residence and shopping mall complex called Icon Siam next to the the site where the observation tower will be constructed, though one official maintained they are owned by different entities.

“It doesn’t belong to Icon Siam,” Pachara Anuntasilpa, director of the Treasury Department, which owned the land earmarked for the observation tower construction.

It was the second time the military government has subverted the procurement process this month. On June 15, Gen. Prayuth Chan-ocha used his absolute power to skirt 10 laws and regulations, including those related to bidding, to expedite construction of a stalled Sino-Thai railway project.

The tower project is part of a plan by the government to construct the so-called observation towers in 10 provinces with the stated aim of promoting tourism with their panoramic view of the cities. While towers in other provinces are operated and built by regional authorities, the one in the capital city will be overseen by the private foundation.

Construction of the tower is estimated to cost 4.5 billion baht, 198 million baht of which will be paid to the Treasury Department as rent. The Cabinet minute says the cost will be entirely covered by the foundation and the private firm selected for the project. Apisak, the finance minister, said it won’t cost the state a single baht.

Any entry fees collected would also be used to maintain the observation tower and not distributed among investors, the minister added.

Apart from the observation deck, the tower will feature an exhibition hall dedicated to the life and work of the late King Bhumibol, he said.

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