Education City Project bid ratified by Cabinet

Bhutan’s Education City Project, an ambitious scheme incepted two years back is finally moving forward with the project bid further ratified by the Cabinet as per the Private Participation in Infrastructure (PPI) framework policy.

The bid has been awarded to the consortium bidders, Infinity Infotech Parks ltd and ILFS (Infrastructure Leasing & Financial Services limited).

Now, with the negotiations finally concluding, the contract agreement will be formulated and signed sometime within this month. The Detailed Project Report (DPR) study will immediately begin after the signing of the draft concessional agreement.

According to the DHI-INFRA, the government will be working on the ancillary infrastructure works such as access road, power and water supply, and telecommunication to the site.

The estimated cost that will be borne by the government will amount to about Nu 500mn.

The DHI-INFRA’s CEO, Kinga Tshering, said following the awarding of the works, the bidders are mandated to follow the primary obligations of carrying out the DPR in nine months.

He said the bidders should invest a minimum of Nu 1.00bn in Phase I,  extending to five years and by Phase II, which is for 15 years, the amount should be Nu 15-20 bn. This is to be submitted and paid to the government or DHI-INFRA.

Other payments will be in the form of the performance security for Phase I.

The pay project development fee is to be Nu 30 mn.

Speaking on the bidders being able to execute such a complex project, Kinga Tshering, said the ILFS is a pioneer in PPP projects across India. He said, DHI-INFRA was happy that the consortium led by the ILFS brought forth a very credible and strong set of skills and financial capacity, along with the expertise to develop and execute the project.

Kinga Tshering added that for the Bhutan Education City project the performance requirements were very stringent and the project milestones were now being defined. “Any delay by the bidders on some critical milestone will cause a penalty of Nu 100,000.00 per day in accordance to the draft concession agreement.” Last January, the DHI had managed to get a consortium of bidders of ILFS and Infinity after which by the end of February  2012, the Empowered Group (EG) had approved the award to the consortium bidders.

The EG comprises of the works and human settlements minister, the economic affairs’ secretary, the cabinet secretariat’s secretary, the education secretary, the secretary of the GNH Commission, Thimphu Mayor, and the CEO of the DHI-INFRA.

Earlier, the EG had approved in principle the report submitted by the bid evaluation committee on the consortium bidders to take up the project. The evaluation was divided into two requirements: technical and financial qualifications.

The ILFS-Infinity consortium had met the requirements of having a minimum net worth of Nu 1bn, the actual consortium net worth being Nu 22bn. Added to these were experiences in the field of developing townships and education experiences with revenues over Nu 200mn per annum.

The consortium also offered a 2.1% revenue share to the government, an annual lease rent of Nu 10mn, and a project development fee of Nu 30mn in addition to making an investment of Nu 1bn in Phrase I.The Education City covering 1,000 acres of land  at Wangsisina, Thimphu  will be leased out for 90 years.

The Education City project had earlier become controversial as the sole bidder at one time was Infinity a company represented in Bhutan by the Prime Minister’s  nephew and son. This is first project in Bhutan for which a separate bill has been put up in Parliament.

About Tashi Wangmo

11 comments

  1. Sonam Jamtsho

    It is very interesting to note that the Infinity is being represented by close relatives of PM.

  2. Hope it will not be like IT park with no takers and beneficiaries after huge investment.

  3. I am very sure and I can ensure that it will be another IT park project with no takers and beneficiaries as mention by river. One thing I don’t understand why all ministers and prime ministers relatives including royal family are involved in million ngulrum project in Bhutan.

  4. EC ratified as predicted. this is called legal corruption, each one scratches each other’s back.

  5. the politicians and DHI really knows how to invest billions without hesitation. I would ask them the same questions if it was their father’s hard earned money, would they do the same,,, They try to be businessman but they are without money in their pocket so to satisfy their egos they spend govt’s money

  6. Audit has to audit DHI’s decision making process. they’re not investing in good business ideas as they are supposed to be doing. they are investing in whatever the DPT leadership thinks is a good idea. If that is the case then the DHI should be dissolved. the ministries are equally capable of toeing the party line and they survive on rcsc salaries.

  7. Infinity indeed. Now they have the land, DHI, and a law to support them, not just the PM & his family.

  8. For the PM, he is in a no win position, if the project does well, since his family members are allegedly in partnership with Infinity, people would not be happy. If it fails, then he will still be responsible for pushing the project through.

    Some are even quite sure that the project will have no takers, so I really don’t know what people want, do they want the project to fail because it would some how mean that the PMs relatives involved in the project would lose money or do they want it to fail because it then mean that the PM has failed.

    • as usual we have idiot questions from the resident idiot.

      People are not happy with the PM and his Education city because:

      1. There is a severe conflict of interest with a PM pushing a project that his near and dear are involved in. (btw this is not the only one)

      2. Because they are giving away 1000 acres to a foreign company while at the same time not even allowing a few decimals of excess land to our own citizens.

      3. They have broken the law against 100% FDI law as a special case

      4. As clear proof that the conflict of interest playing a major role, the NA has even ratified a bill and passed as law an act specially designed to support THIS education city! This law does not address any other business or even other education cities! Why does a business deserve its own law? Are they planning to ban all future education cities and ensure there is a monopoly?

      5. It seems DHI has been bullied into doing the dirty work of making this project take off even though it is not their job when someone else is investing. DHI is supposed to be an investment arm, not a marketing agent of the DPT.

      Whether the business is a success or a big flop is irrelevant. Whether the people like the PM or not is irrelevant. The underlying issue is corruption.

      The next government needs to raise this act again in parliament and revoke it or make it more sensible and less corrupt.

      • Keep on crying, I really don’t see any corruption in it, rather, when you invite FDI, some concessions are needed to be offered to the company that is investing millions of their hard earned money. And this happens everywhere and not only in Bhutan. With an attiude like your’s, its small wonder that we have very few people that want to invest In Bhutan.

        And if you are not interested in whether the project does well or not, then I feel sad for the way you feel As a Bhutanese, all Bhutanese should want such projects to do well, but some people like this empty vessel would actually be happy if it failed. 

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