The ACC in 2013 received a case in 2013 from the Royal Audit Authority (RAA) about the suspected bribery and collusion between the government engineer Gyem Dorji, Department of Civil Aviation (DCA), Ministry of Information and Communication (MoIC) and the contractor M/s T-Kunzom Construction and Hiring Ltd in relation to the construction of Gelephu Domestic Airport in 2011-12.
The Commission initially declined to investigate the matter as the issue in consideration appeared to be of administrative nature.
However, in August 2016, the RAA referred the matter back to the Commission with certain piece of additional information which implied possible existence of fraudulent practices surrounding the supply of certain item.
In addition, there was already an anonymous complaint lodged with the Commission indicating corrupt payment of Nu.1.50 million to the engineer by the contractor in exchange for manipulating the contract documents to win the contract.
After extended review, the Commission decided to open full-fledged investigation on 29 November 2017.
In June 2011, the MoIC, through open tendering, awarded the construction of Gelephu Domestic Airport to M/s Tashi Kunzom Construction for a contract price of Nu. 192.222 million with scheduled date of completion set in April 2012. At the end of the project, the total cost escalated to Nu. 271.556 million.
At the relevant period, Gyem Dorji, then Deputy Executive Engineer was the Site Engineer as well as the Project Co-ordinator for this project. He was also involved in preparing the cost estimates for the project.
This project was soon mired in controversy after the RAA detected series of irregularities.
One of the irregularities on which the RAA invited the attention of the Commission pertained to suspected collusion surrounding the estimation and measurement adopted by the engineer in relation to supplying, fixing and laying of concertina wire over the 2206.66 m perimeter wall.
The investigation aimed to establish whether there existed any corrupt practices in steering the work to the contractor or affording the latter with privileged information, specifically, the estimate rate of concertina wire from which the contractor dubiously profited over Nu 22 mn.
Evidence showed that Gyem Dorji knew about the market price of concertina wire at the time of preparing cost estimate contrary to his claim that he did not make effort to conduct price inquiry.
Despite his knowledge that concertina wire cost only Nu.75 per metre, he had inflated his estimate using Nu.450 per metre as per BSR 2009.
As alleged in the complaint, the Commission’s investigation revealed that sometime in early July 2011, a month after the project started, the contractor drew two consecutive cheques, one of Nu.800,000 and another Nu.700,000 out of its business Over Draft (OD) account.
These two cheques were drawn in the name of its employee Mr. Pema Wangchen (deceased), the Finance Director, but instructed by the Managing Director Dago Tshering to be paid to Gyem Dorji.
The Commission’s investigation found evidence from the communication record which corroborated with the statement of one key witness who had been confided by late Pema Wangchen about Dago Tshering’s instruction.
The same day when the first cheque amounting Nu.800,000 was drawn, Gyem Dorji purchased one second-hand Hyundai SUV costing Nu.850,000. Few months later, he bought a land at Zomlingthang, Gelephu for Nu.1.350 mn.
During the investigation, he and his relatives either gave misleading statements or failed to account about the source of financing of these assets.
The investigation also revealed that sometime in December 2011, Gyem Dorji certified for payment of a forged invoice of M/s Global Trader, Kolkata for purchase of concertina wire at an inflated rate of Rs 200 per meter. In reality, the contractor bought this material from another manufacturer M/s Shiva Engineering Co Pvt Ltd, Kolkata at Rs. 5.95 per meter.
The forged invoice was passed with an intent to advantage the contractor in obtaining Nu.6.619 mn advance when the contractor would have been entitled to claim only Nu. 196,944.
Evidence proves that Gyem Dorji, at the time of certifying this forged invoice, had prior knowledge that the wire should have come from Shiva Engineering not from Global Traders.
Further, the fact that there had been many audit irregularities involving excess and unjust payments to the contractor resulting in the cost escalation stands to show that Gyem Dorji failed to perform his duties.
The Commission concluded that omission of his duties is, in part if not whole, was because he solicited and received corrupt financial advantage from the contractor which have translated into his unexplained assets.
The Commission’s investigation also revealed that M/s Tashi Kunzom Construction had wilfully evaded Corporate Income Tax through manipulation of certain expenses during the tax filing for the year 2012 thereby depriving the government of Nu. 10.099 mn in tax revenue.
The Commission ascertained that the contractor is liable to restitute to the state Nu. 42.767 mn including fines and penalties.
ACC will be prosecuting Gyem Dorji, Dago Tshering and others under appropriate criminal charges.