Corruption in Thailand worsened in the first half of the year, with the private sector saying it must spend 30-35 per cent of a project's budget as graft to win a government job, a survey by the University of the Thai Chamber of Commerce (UTCC) and the Anti-Corruption Network found.
If this is true, corruption could cost Bt252 billion (S$316 billion) to Bt294 billion out of the country's overall investment budget of Bt840.14 billion this year, amounting to 2.18-2.54 per cent of gross domestic product.
Corruption is getting worse because of higher budgets for the government's post-flood rehabilitation projects, and many mega-projects will open for bidding in the current second half, said UTCC president Saowanee Thairungroj.
Worsening graft could damage foreign investors' confidence and Thailand's competitiveness against other countries, she warned.
She claimed that the major culprits were politicians and businesspeople who deal with government projects, while state officials are instructed by politicians to cheat on each project.
To increase transparency and rein in corruption, the UTCC urged the government to share information with the public clearly on every project tender.
Based on a survey of 2,400 respondents covering the business, public and government sectors, the Thai Corruption Situation Index (CSI) slipped from 3.6 points in December to 3.5 points out of 10 last month, suggesting an increase in graft in the past six months.
A CSI score close to zero indicates high corruption, while a score close to 10 shows higher transparency and a lack of graft.
Other indices related to corruption - those measuring its seriousness, suppression efforts, and awareness and morality - have also dipped since last year, while only the index on corruption prevention was unchanged from last year's 4 points.
The index on corruption seriousness was down from 3.4 points to 3 points, the suppression index shrank from 3.8 to 3.7 points, and the index on awareness and morality dropped from 3.5 to 3.2 points last month.
More than 85 per cent of respondents said they had to pay bribes whenever they had to deal with government agencies or politicians to win contracts. Only 4.7 per cent said they had not paid any bribes, while almost 10 per cent said they were unaware there was graft.
Saowanee said the projects most likely to lead to corruption were infrastructure developments worth a total of Bt2.2 trillion and the flood-rehabilitation project worth Bt300 billion.
Moreover, 35 per cent of respondents said they must pay more than 25 per cent of a project's budget to win the job from the government.
On average, they said they must pay about 30-35 per cent of the budget to win a project from the government or state-owned agency.
These figures were higher than in the last survey, when only 30.6 per cent said they had to pay more than 25 per cent for tea money.
But according to the UTCC statistics for 1999, only 11-15 per cent of the budget would be paid under the table, Saowanee added.
She said the losses due to corruption would affect the government's procurement of materials, land and buildings.
Last year, the total losses due to corruption were about Bt233 billion to Bt272 billion, from the total investment budget of Bt777. 58 billion, she said.
Saowanee said the government had to get serious about reducing corruption or it would continue to hold back the country's growth.
Thanavath Phonvichai, director of the UTCC's Economic and Business Forecasting Centre, said the survey showed that the government had failed to rein in corruption.
The situation will badly damage Thailand's image while other Asean countries such as Singapore and Malaysia have developed more rapidly.