CREC responsible for “structural engineering work” at the SAO building, DSI told

The Department of Special Investigation (DSI) has started its interrogation with representatives of the SAO building’s construction contractor, ITD-CREC, design engineers and architects, as well as consultants, this week, whereas more facts have been revealed, including the responsibilities of the concerned parties

The DSI has invited representatives of Italian-Thai Development Plc (ITD) and consultants of the SAO building project to testify in a case concerning the collapse of the State Audit Office (SAO) building to determine whether there are any irregularities or wrongdoings involved in the incident. All are still treated as “witnesses”.

Since early April, the department has been looking into possible irregularities that may have been involved in the collapse of the building, which has so far caused more than 100 casualties. It has taken two cases concerning the use of nominees and possible bid collusion as special cases under its law and authority, resulting in official invitations sent to parties concerned for interrogation this week onwards.

ITD is among the invitees. ITD’s Executive Vice President, Kriengsak Kovadhana, showed up on Tuesday as the company’s representative to testify before the investigators. According to Police Lieutenant Colonel Amorn Hongsritong, Director of the DSI’s Bureau of Government Procurement Fraud, the department asked the ITD about its joint venture with China Railway Number 10 (Thailand) (CREC) (ITD-CREC), proportions in shares and earnings at their joint venture, work distribution, as well as the bidding process.

It was told by the ITD’s representatives that the ITD had worked with its Chinese counterpart before in a high-speed railway project, and that’s the reason why it had trust in its counterpart and joined it in the joint venture. They divide earnings according to the shares they hold; ITD has 51% of the shares, while the CREC has 49%, according to Pol. Lt. Col. Amorn.

The ITD’s representatives also told the investigators that during the construction, the ITD was responsible for piling engineering and mechanical and electrical engineering work, while the CREC was responsible for “structural engineering work”.

Mr. Kriengsak did not talk to the press. But when being approached with questions about the relationship between the ITD and the CREC, he just briefly replied when asked whether the ITD knew in the first place that the CREC is a Chinese company: “Definitely, we knew that.”

He later elaborated during the press conference to express the joint venture’s readiness to support the victims through compensation set between Bt 200,000 to one million that the JV was not in a position to direct or examine every contract involved, as it’s actually just a construction contractor. He compared it to “the lowest actor in a food chain”, which took orders from the building owner, architects, and consultants. 

Asked whether the JV knew about the change of the design that was suspected to have contributed to the collapse of the building as well as forgeries of signatures of consulting engineers to approve the change of the design, he said it knew nothing and all these had nothing to do with the JV as it’s the business of the architects and consultants.

According to the DSI, the CREC is found to have Thais holding 51% shares, meaning it’s registered as a Thai company. However, three Thai shareholders are found to have been used as nominees. The DSI suspects that the tactic is used to facilitate the company to enter a bidding process by presenting itself as a Thai company. The largest shareholder of the CREC is CREC NO.10, or China Railway No.10 Engineering Group Co., Ltd, a subsidiary of China Railway Group Limited (CREC) based in Beijing, China, a Chinese state-owned enterprise in the mega construction business worldwide.

According to the Foreign Business Act B.E. 2542 (1999), foreigners who wish to run certain businesses listed under the act in Thailand must hold fewer shares than their Thai counterparts, 49% at most, or in other words, they cannot own a company. These include construction.

Mr. Zhang Chunling, who holds shares on behalf of CREC No.10 at 49%, was arrested on April 18. He has been charged for being a foreigner who runs a business listed under the act (construction), and on behalf of the legal entity, he has been charged for conspiring in the use of nominees, according to the DSI.

Its largest shareholder, CREC No.10, meanwhile, also has a joint venture with the ITD (ITD-CREC No.10), which won Contract 3-1, part of the High-Speed Railway Development for Regional Connectivity Project, Phase 1 (Bangkok-Nakhon Ratchasima) in 2023. It’s claimed to be a collaboration project between the Thai government and China, and is part of China’s ambitious Belt and Road Initiative (BRI). The contract is worth more than Bt 9,000 million. In mid-2023, Mr. Zhang represented CREC No.10 in a contract signing ceremony of the contract.

At the same time, the department has also invited representatives of the architects and design engineers of the building, a joint venture of Forum Architect Co., Ltd. and Mein Hardt (Thailand), Ltd., to testify. Mein Hardt’s executive did not talk to the press. He briefly replied when asked about the change of the design, admitting that the design of the building was modified to enable a larger walking space around the life core. However, he did not say who ordered the change of the design.

As reported by Matichon Online, the Bureau of Government Procurement Fraud’s interrogation has found that the joint venture holds the authority to approve the change of the design of the building. Mein Hardt was responsible for design engineering work, while Forum Architect was responsible for architectural work. 

Mein Hardt’s representative admitted to the investigators that there was a change in the design of the building to enable larger walking space around the lift core, and Mein Hardt was responsible for the new calculations of the changed design engineering work. However, the two parties approved the change together in the form of a consortium. 

The bureau’s investigators noted that they need to investigate further to see who would be subject to responsibility if the design of the building has contributed to the building collapse.

The DSI is also eyeing to invite up to 40 engineering consultants or advisors of the project from a joint venture of PKW. Pol. Capt. Surawut Rangsai, the DSI’s Deputy Director-General, and the head of the special investigation team investigating the SAO building case, told Nation TV that so far the department has invited 17 consulting engineers for interrogation. 13 of them have denied any involvement with the project and claimed to have had their signatures forged. The rest have admitted that the signatures on the documents seized at the site belong to them.

Also read: Possible bid collusion in SAO building case taken as second “Special Case” by DSI