The Bhutanese Leading the way.
The Multi Level Car Parks (MLCPs) has been in the news over the years with efforts by Thimphu Thromde to pedestrianize Norzin Lam to benefit it.
This paper’s reporting and a recent RAA report shows the Thimphu Thromde going out of its way to financially benefit the private owners of this PPP project to the detriment of the public revenue.
The difference now is that the current elected government is also going out of its way to the point of even violating the FDI rules to benefit this private company.
It does not help that a sitting cabinet minister was a former shareholder in the project, and those shares are currently owned by a family member of the minister.
The government by allowing the FDI partner to withdraw has violated a clear three-year lock in period FDI rule that stipulates a FDI investor cannot take its equity for three years after the start of commercial operations. This is especially for a PPP project with public land given as concession.
According to the Thromde and the company, the cabinet has also generously waived of around Nu 8 mn in revenue owed to Thromde after delay in the project. The Thromde is also not bothering to collect the concession fees stipulated in the agreement though the project has started commercial operations for a year, and wants it to be waived off with the proposal put to the government.
The Thromde has already not collected land lease fees and waived off half the scrutiny fees.
It also wants to take over more spaces and convert them into parking spaces to hand them over for the private company’s benefit.
While the government claims the Centenary Farmers Market (CFM) move shutting down 515 vending stations is motivated by COVID, it does not make sense to ask the more boxed in MLCPs to create space for 270 vendors which is 57 percent of the CFM.
Just the rent from the vendors, even at the CFM rate, will be well above the annual concession fee that the MLCPs have to pay the Thromde.
The agreement with the company is very strict on a 20 percent commercial space which the company now wants increased to 35 percent. However, the CFM move automatically increases this even above 35 percent.
Both the Thromde and the government, instead of looking after certain vested interests, should look out for the interest of the public in this project.
‘Crony Capitalism is an economy where success in business depends on close relationships between business people and government officials.’
Warren Buffet
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