Suvarnabhumi Airport Contract Questioned

February 11, 2004

Airport Contract Questioned 
Bangkok Post, Thailand


An affiliate of Airports of Thailand Co (AoT) has
filed a complaint with the Auditor-General's Office
complaining of a lack of transparency in a procurement
bid for work on the new Suvarnabhumi Airport.

Thai Airport Ground Services (Tags), 28% owned by AoT,
has asked state auditors to investigate a contract won
by WFS-PG Cargo Joint to provide air cargo terminal
services and ground service equipment maintenance for
the airport.

Anuphong Rojanakarin, Tags' managing director, said
WFS-PG Cargo, a joint venture between Bangkok Airways
and Worldwide Flight Services, offered 1.5 billion
baht gross returns to AoT while Tags offered 1.11
billion baht.

But Mr Anuphong said the winner should be disqualified
in five critical areas as stipulated by the bid terms.

First, he said, the contract required the bidder to
invest at least one billion baht, while WFS-PG
proposed investing only 800 million.

The returns offered were also unrealistically high, Mr
Anuphong said. 

To generate the necessary returns, PG-WFS would need
to charge higher service fees than Tags had proposed. 

''It is difficult for the company to do that because
clients of Tags are already satisfied with the quality
and service charges provided at present,'' Mr Anuphong
said.

Tags also claims that the equipment specified by the
rival bidder did not meet the criteria. The facility
requires an automatic storage/retrieval and bar-coding
system as well as equipment for the transfer of
containers and pellets in outbound warehouses.

But the financial proposal by PG-WFS covers only
investment in forklifts, Mr Anuphong said.

As well, WFS-PG failed to verify its track record in
managing cargo beyond a specified minimum volume
between 2000 and 2002, only claiming past experience
at airports in Brussels, Madrid and Paris.

Also, the winner did not propose construction of an
operations building for ground service equipment
maintenance.

Mr Anuphong said his company's 2,800 staff could face
job losses if the rival bid was allowed to succeed.


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