Asian Development Bank

Thai villagers demand halt to ADB-backed Samut Prakarn Wastewater Project

March 28, 2002

Klong Dan’s open letter to the Thai Prime Minister, villagers demand halt to project.

Open Letter to the Prime Minister of Thailand Mr. Thaksin Shinawatra from the people of Klong Dan and Song Klong subdistricts, Samut Prakarn and Chachoengsao Provinces We, the people of Klong Dan subdistrict, Samut Prakarn Province, and Song Klong subdistrict, Chachoengsao province who will be affected by the Samut Prakarn Wastewater Management Project (SPWMP) urge the Prime Minister to stop the project.

The Asian Development Bank (ADB), the main funder of the SPWMP, has violated its own policies in processing and implementing the project. The project has not resolved the questions involving the non-participatory and non-transparent nature of the project implementation, allegations of corruption, and the social, economic and environmental impacts.

The local communities have been fighting to stop the project since 1999. We have never challenged the importance of having an appropriate wastewater treatment facilities to help deal with the pollution problem in Samut Prakarn. We are challenging the location and the negative impacts associated with siting the SPWMP at its present location in Klong Dan.

Last year, we demanded that the ADB inspect the non-transparent process by which the SPWMP has been implemented as well as any violation of ADB policies especially relating to social, environmental, and economic impacts. Subsequently, the ADB’s Board of Directors authorized an independent Inspection Panel on 10 July 2001.

During the inspection process, we expressed our disappointment with the Thai Government for refusing permission for the Inspection Panel to visit the SPWMP site and meet with local communities. Thus the Panel could not carry out a full inspection of the project site, meet with the local people to be affected by the project, or discuss the project with Thai academics and Senators.

Despite this serious limitation in its work, however, the Inspection Panel has completed its work and published its Report on 14 December 2001. The report found that the ADB has violated several policies in processing and implementing the project.

The most crucial is the violation of the policy on Supplementary Financing of Cost Overruns which the report states: “The Panel is of the view that in not carrying out a reappraisal of the entire project for the supplementary loan proposal there was non-compliance by the Bank . This omission became a crucial factor from which other consequences followed” (Paragraph 75, page 22, Final Report of Inspection Panel on Samut Prakarn Wastewater Management Project, 14 December 2001). Other violations of ADB policies include the Bank’s Operational Mission, Environmental Considerations in Bank Operation, Involuntary Resettlement, Incorporation of Social Dimensions in Bank, and Governance. The Panel also found that the ADB only partially complied with the policies on Benefit Monitoring and Evaluation, and Economic Analysis of Projects. Moreover, the local people have consistently questioned the non-transparent and non-participatory nature of the project implementation that has involved huge cost overruns and potential for corruption.

The Inspection Panel has also noted the massive cost overrun involved in the implementation of the project since the estimated cost of the project soared from US$507 million at appraisal to $948 million. The Board Inspection Committee in charge of the Inspection Panel has also confirmed that: “A sudden increase of $441 in the estimated cost of a recently-approved ADB project is a significant event” (Paragraph 38, page 7, Inspection Request, Samut Prakarn Wastewater Management Project, 28 February 2002).

However, the allegations of corruption in the project potentially involving the private sector, government officials and the management of the ADB are yet to be satisfactorily resolved.

The project would pose serious economic and environmental impacts that have not been adequately studied in the project implementation. The Inspection Panel report has noted:”The rights and interests of the people, whose livelihood depends upon the activities in economic exclusion zone, have been adversely affected due to being excluded from engaging in their economic activities.

“The rights and interests of the people whose livelihood depends upon the activities in the vicinity of the economic exclusion zone could also be adversely affected due to the potential problems caused by the dilution of salinity, release of toxins or heavy metal.

“The rights and interests of people, who are in the vicinities of the treatment plant, could be adversely affected by the odor, lowering of property value and potential problems caused by the existence of toxin and heavy metal in the sludge management” (Page 2, Final Report of Inspection Panel on Samut Prakarn Wastewater Management Project, 14 December 2001).

It is evident from the Inspection Panel’s report that the SPWMP has the potential to seriously damage the local livelihoods of local communities and the coastal environment.

The PCD failed to conduct an environmental impact assessment (EIA) of the project site before beginning construction. The EIA is crucial since the project site is located very near the coast and consists of soft, sandy soil vulnerable to sea erosion. The lack of an adequate EIA has delayed the construction of the project and is likely to cause the government to pay “compensation” to the project developers. At present, the construction company is demanding 6,865 million baht as compensation from the Pollution Control Department (PCD) because the project could not be completed by the construction deadline of 20 February 2002.

The local communities have expressed these concerns about the SPWMP to the government and the ADB in the past. On 1 June 2001, the Thai Senate passed a resolution urging the government to “stop all project process” since this project has been non-transparent.

We strongly demand that the government take this opportunity to stop the project. Continuing the project will seriously damage the coastal and marine livelihoods of hundreds of local people and the coastal ecosystem as well as contribute to increasing the debt burden of the national budget and the tax-paying citizens of Thailand.

Sincerely,

Klong Dan and Song Klong people

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