FORESTRY / CANCELLED TIMBER CONTRACT : Singapore firm suing FIO

Bangkok Post, February 26, 2007



A Singaporean firm is suing the Forest Industry Organisation (FIO) because its timber purchase contract was cancelled after alleged irregularities were found in the deal.

Tropical Forestry Pte Co lodged a complaint with the Central Intellectual Property and International Trade Court after the FIO terminated the 2004 agreement, a source at the Natural Resources and Environment Ministry said.

The company agreed to buy 126,508 cubic metres of logs from the FIO for 823 million baht. The deal was stopped by environment permanent secretary Petipong Pungbun na Ayudhya after investigators deened it "irregular" because there was no bidding process to select the buyer.

The inquiry concluded the deal caused "serious damage" to the FIO, which is under the Agriculture and Cooperatives Ministry. The timber price was said to be lower than the market price and the deal had not been approved by the FIO board.

Disciplinary action was considered against former FIO director Chanatt Lauhawatana and other staff. They were also fighting the case in court, the source said.