Seventeen rice-bid winners are pressuring the government to urgently allow transportation of the produce from its warehouses and pay compensation for cancelled contracts, with one of them already threatening to sue if it fails to comply.

The compensation would offset the exporters' losses from the rice they deposited under the government's now-terminated bidding. Rice-exporters are scheduled to meet Prime Minister Abhisit Vejjajiva on Tuesday to hear what the government proposes to do.

The government is forbidding all bid-winners to move rice from its warehouses, although they have already paid the required deposit on 240,000 tonnes out of the total bidding volume of 2.6 million tonnes.

The 17 winners have paid about Bt3.6 billion in bank guarantees on the 240,000 tonnes of government rice and have already removed 100,000 tonnes.

Sompong Kitireanglarp, president of Ponglarb, one of the affected exporters, said the bid-winners did not object to the government's plan to cancel the remaining volume, but the premier must allow exporters to move their produce from the warehouses.

"Our buyers are waiting for shipment. If the government does not allow the rice to be moved within seven days, I may take it to court," said Sompong.

A source at another rice-exporter said the government's reputation would be badly dented if it caused exporters to renege on their contractual obligations.

To solve the problem, the government must obey the contracts by allowing the rice to be delivered.
The government could cancel the remaining 2.4 million tonnes of rice and open a new bidding based on clearer regulations, said the source.

In order to avoid losses from a falling market price, the source suggested that the government open a new bidding round for a smaller lot of 500,000 to 1 million tonnes.

On Wednesday, Abhisit ordered the Commerce Ministry to terminate the contracts following a report that the government stood to lose up to Bt20 billion on the 2.6-million-tonne rice-pledging scheme initiated by his predecessor.

The Public Warehouse Organisation yesterday met with the 17 bid-winners to mediate over the cancelled contracts.
Acting president Yongyos Palanitisena said the organisation would collect all proposals made by the affected exporters, and submit them to the premier and Commerce Minister Porntiva Nakasai on Tuesday. The government will attempt to reach a compromise that will satisfy exporters and the government, he said.

Source: The Nation