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The payment is part of a Bt6.68billion deal for fire trucks and other equipment.

The suspension of payment of about Bt700 million to Steyr Co yesterday was based on a finding by the Assets Examination Committee that the contract was illegitimate and should be voided.

The source said BMA Governor Apirak Kosayodhin had asked Krung Thai Bank about suspending payment late last month and notified related agencies including the Interior Ministry, the National Counter Corruption Commission, the Office of the AttorneyGeneral (OAG), and the Commerce Ministry.

Apirak affirmed yesterday that he had assigned his deputy, Wallop Suwandee, to discuss the matter with Krung Thai Bank last week and would suspend the payment pending fur¬ther discussions with the OAG.

A source at BMA headquarters said no money was deducted from the city's Krung Thai Bank account. But it was possible the bank had to make the advance payment on behalf of the city, just like the first instalment.

In that case the city would be charged interest. The bank would deduct money from the BMA account and transfer the sum to Raiffeisen Zentralbank Oesterreich AG Bank in Vienna because the contract stated that payment would be paid via a confirmed, irrevocable letter of credit.

The city had yet to cancel the purchase contract, so it could not cancel payment, the source said. If BMA executives wanted to stop payment, the contract must be cancelled first or else the supplier might file a lawsuit.