Thailand construction contract mismanagement leads to big loss

Inefficient management of construction contracts in Thailand during the 2023 fiscal year led to financial losses exceeding 30 billion baht, according to a spokesperson from the State Audit Office (SAO).

SAO spokesperson Sutthipong Boonnithi revealed that these figures emerged from the SAO’s annual audit, which examined over 14,148 projects and contracts across 9,426 public agencies nationwide. The audit identified budget management flaws in 1,795 agencies, accounting for 19% of those reviewed.

The SAO detected abnormal spending totalling at least 30.83 billion baht.

In response, the SAO issued conditional recommendations to improve 629 out of 8,575 financial reports under audit for accuracy. Sutthipong noted that most of these discrepancies involved major expenditures with incomplete bookkeeping or errors in record-keeping, often related to cash, land, and real estate properties.

The audit also found that 2,638 out of 5,318 contracts, or nearly 50% of the total cases, failed to comply with legal requirements or contractual obligations, resulting in damages amounting to around 666 million baht.

Sutthipong highlighted several abnormalities, including violations of middle market price estimation, unclear contract statements, tax collection issues, and breaches of contract terms. Flaws were identified in 151 out of 157 cases, or around 96%, of government agencies, including both central and provincial offices, examined for efficient use of state funds.

“The inefficiencies included proposals that were incomplete or poorly prepared for project operations, as well as delayed timelines.”

Sutthipong noted that the total damage was at least 30.16 billion baht.

Sutthipong also pointed out potential issues with the construction contract for the Rama II elevated road project, suggesting that the project may not yield satisfactory results. He recommended that all related sectors cooperate to reduce the construction timeline from eight to five months to improve budget management efficiency.

The 10.5-billion-baht project, which has gained notoriety for its delays, is expected to be completed in November, reported Bangkok Post.

In related news, two construction workers were critically injured after one was electrocuted by a high-voltage wire, causing him to fall from a two-story building. The incident occurred on July 31 at a construction site near Wat Phlapphla in Chanthaburi province.