The Nation
March 27, 2002

A loan by Asian Development Bank (ADB) to Samut Prakarn’s Klong Dan project violates six of its own policies and procedures, says an independent panel set up by the bank.

The Panel of three non-governmental organisation representatives from the Netherlands is the first independent body formed to scrutinize a bank’s loan. The conclusion was reached after a study in July.

Violations were found in areas such as supplementary financing of cost overruns, operational missions, environmental considerations of bank operations, involuntary resettlement, incorporation of social dimensions in bank operation, and governance, the panel said.

Klong Dan’s opponents yesterday wrote to ADB president Tadao Chino and its 12 Executive Directors calling for the project to be reviewed instead of merely admitting the mistake.

“It’s now clear that the ADB had made serious errors in its appraisal, approval and implementation of the project,” said the group’s leader Dawan Chantarahasadi at the press conference yesterday.

The group plan to write to Prime Minister Thaksin Shinawatra tomorrow at the Government House, urging him to halt the project.

“He may act on this finding and stop the controversary without having to make compensation,” she said

Of the US$948 million (Bt41 billion) total project cost, the ADB had put up US$504 million for the wastewater treatment plant initiated in 1995. More than US$80 million loan were made in 1998 without a review of the project’s impact on local residents or the environment as demanded by policy, said activist Premrudee Daoroung.