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Government backs off subs deal

THAILAND: The government has decided to temporarily back off from the controversial purchase of two submarines worth B22.5 billion from China after the Chinese government allowed the purchase to be delayed for a year, a source said.

militarymarineChineseeconomics
By Bangkok Post

Monday 31 August 2020, 09:13AM


Pheu Thai MP Yuttapong Charasathien, deputy chairman of a parliamentary subcommittee which has been scrutinising the budget, outlines his stance against the purchase of the two submarines. Photo: Apichart Jinakul.

Pheu Thai MP Yuttapong Charasathien, deputy chairman of a parliamentary subcommittee which has been scrutinising the budget, outlines his stance against the purchase of the two submarines. Photo: Apichart Jinakul.

The source at the House committee scrutinising the budget bill for the 2021 fiscal year said that after the Chinese agreed to the request for the delay, the government sent a signal to the committee’s members from coalition parties to slash the budget of about B3bn for the first payment.

The purchase of the first of the three submarines from China has already been finalised, using money from the 2017 budget. Delivery is expected in 2023.

The other two submarines, costing B22.5bn, require payments spread over seven years.

The budget to buy the second and third submarines from China was scrutinised by the sub-committee on durable product items, state enterprises, ICT equipment and revolving funds headed by Suphon Fongngam, an MP from the ruling Palang Pracharath Party.

The sub-committee was split equally, prompting Mr Suphon as chairman to cast his deciding vote in favour of passing the budget for the submarines.

The budget was then put to the main House committee examining next fiscal year’s budget headed by Deputy Finance Minister Santi Promphat.

The main committee will hold a vote today (Aug 31) on whether to approve the procurement.

The source also said the subcommittee today will inform the main committee of China’s decision.

A source from the Royal Thai Navy (RTN) said the matter to put on hold the purchase of the two submarines was decided by Prime Minister Prayut Chan-o-cha who held talks with China. The source said the RTN respected the decision of the premier.

Yuttapong Charasathien, the Pheu Thai MP and deputy chairman of the subcommittee, said yesterday he would seek a Constitutional Court ruling on the validity of the procurement of the two submarines if the purchase is approved by the House committee.

He cited Section 178 of the constitution which stipulates that any agreement that may have a wide impact on security, the economy, society and trade and investment must be approved by parliament.

The section says parliament must approve the agreement within 60 days of the document reaching parliament.

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Mr Yuttapong said that if the purchase of the two submarines is a government-to-government agreement, it must follow the procedure under the section.

However, he said that a check has found that no such government-to-government agreement had been submitted to the now-dissolved National Legislative Assembly or to the current elected parliament for approval.

This means the purchase contract is likely to violate the section, Mr Yuttapong said.

Still, Mr Yuttapong said he suspects the purchase may not be a government-to-government agreement.

“I suspect it is not a government-to-government contract. I have never seen the Chinese government send a written quotation for the submarines to the government.

“When I checked the contract for the purchase of the first submarine, the payment was made to a private company, not to the Chinese Finance or Defence Ministries. The company did not have a letter of authorisation from the Chinese government,” Mr Yuttapong said.

He said the Royal Thai Navy had failed to explain details regarding the signing of the government-to-government procurement contract.

If there is any attempt to push the purchase of the two submarines through the House committee, he will recommend the Pheu Thai Party petition the Constitutional Court to rule on the legality of the procurement, Mr Yuttapong said.

He previously said the contract is not a genuine government-to-government deal as claimed because navy chief Adm Luechai Ruddit who signed on behalf of Thailand had no authority to represent the government and the Chinese company which signed the contract was also not representing the Chinese government either.

Only the prime minister or the foreign minister can legally represent the government in such deals and only the defence minister is able to be assigned that authority if necessary, said Mr Yuttapong.

However, the navy defended the procurement, insisting the subs were vital for protecting the country’s maritime security and the procurement of three submarines was a done deal.

Meanwhile, according to an opinion survey by Suan Dusit Rajabhat University, or Suan Dusit Poll, the biggest causes of worry for the public are political conflicts and the planned purchase of the two submarines.

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DeKaaskopp | 01 September 2020 - 17:26:16

"They are mentally/skill wise not able to coop at sub levels"  If they are mentally not able for that,how come you are allowed to drive a car ?

Pascale | 01 September 2020 - 11:55:10

Kurt, Laos is a landlocked country !Of course they do not have a helicopter carrier or any other aircraft carrier ! Lol !

Kurt | 01 September 2020 - 08:36:46

Myanmar, Laos, Cambodia, Vietnam and Singapore have no helicopter carriers.
Thailand would be best equipped having a operational carrier with ..search & detect, destroy foreign submarine equipped helicopters to protect Thai shallow waters. For Thailand no international role in this sub field. They are mentally/skill wise not able to coop at sub levels.

Kurt | 01 September 2020 - 08:18:46

Last few years Army got het new tanks and armoured cars. Airforce got a few new helicopters+3 small planes from His Majesty the King, Now the Navy wants also a few toys and signed herself for the subs. 'We must be fair among each other', Yes?  :-)

Kurt | 01 September 2020 - 08:13:42

..."I suspect it is not a Government-Government contract. Never seen the Chinese Government send a written quotation"...   Of course not! What is not written on paper offers room for 'traditional financial corrections/budgeting'.  We must be/remain flexible, yes?

Kurt | 01 September 2020 - 07:56:54

Just buy a skeleton hull sub, and make it at once a museum extension besides that antique useless helicopter carrier. Refurbish them into a hotel/ guesthouse.  Unique!  :-)

JohnC | 31 August 2020 - 09:51:00

The only reason they want to purchase the subs is because their neighbouring countries have them. We Thais cannot lose face by not having the same useless toys as our second class neighbours!!! Pathetic attitude and waste of money that is badly needed elsewhere.

 

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