OAG says graft in low-cost rice sales scheme cost state B3.8bn Please credit and share this article with others using this link:http://www.bangkokpost.com/news/general/662196/oag-says-graft-in-low-cost-rice-sales-scheme-cost-state-b3-8bn. View our policies at http://goo.gl/9HgTd and http://goo.gl/ou6Ip. © Post Publishing PCL. All rights reserved.

The Office of the Auditor-General (OAG) has found several irregularities in the Public Warehouse Organisation's (PWO) implementation of the low-cost rice sale programme under the Yingluck administration, saying their misconduct cost the state about 3.8 billion baht in losses.

 A source at the OAG said implementation of the project -- which aimed to distribute low-priced rice to consumers -- was not in line with the project's objectives.

 The prices at which the rice was sold to consumers were higher than the required 70-baht per bag stipulated by the rice-pledging scheme.

 As part of the scheme, the PWO was allowed to purchase 503,518 tonnes of rice at half the market price.

 The PWO then signed contracts with six companies to distribute the bagged rice for sale, but none of the contracts with the companies said the rice had to be resold at 70 baht per bag.

 The contracts should have stipulated that if a third party bought the rice from the companies, the same 70-baht rule would apply for its resale. In its absence, consumers could not reap economic benefits.

 The OAG investigation also found that only one of the six contracted companies had experience as a rice retailer and some of the five other companies were related to the first one, said the source.

Witnesses said the companies without experience in selling rice had secured the contracts with the PWO through personal connections, said the source. Worse still, the OAG's probe into the money trail of the project showed the same person purchased cashier's cheques for all six companies when they paid for the rice purchases from the PWO, said the source.

Most importantly, the OAG found the six companies had re-sold the bagged rice to other rice retailers for between 72-75 baht a bag, higher than the project requirements that the rice be sold for under 70 baht per bag, which marked up the consumer cost even more.

 In addition, the rice was bought from farmers for 15,000 baht per tonne.

 But an inspection of the rice warehouses in October 2014 by the Prime Minister's Office found the rice was improperly stored for too long a period of time and only 10% of the 18 million tonnes was good quality and edible.

 The results of the OAG probe have been forwarded to the National Anti-Corruption Commission, along with recommendations that the PWO officials involved be prosecuted for causing damage to the state.

 The report also recommends legal action against the companies for violating the 1999 State Organisation Bidding Act. .