Bhutan to import cement in the face of severe crunch

With Penden Cement Authority Limited (PCAL), the main supplier of cement to hydro projects across the country currently facing a severe supply crunch, it has placed an order for 5,000 MT of cement with ACC in Orissa, a top brand Indian cement company, in addition to the already imported lot.

The import had to be made following a recent increase in demand from Dagachhu hydro project. One rake or 2,500 MT of cement has already been supplied and two additional rakes are yet to be supplied to Dagachhu hydro project.

PCAL’s general manager for sales, Sherab Tenzin said the first rake will reach PCAL by April 29 which is expected to alleviate the cement shortage for now. Sherab Tenzin said, “We should be able to maintain supply of cement by May 1 or May 2.”

PCAL’s General Manager for procurement and inventory, T B Gurung said that PCAL has enough budget to import 20,000 MT in a year of which 10,000 MT will be reached once the recently ordered consignment is delivered to PCAL.

T B Gurung said the cement agents are favoring their loyal clients because of which the needy customers or contractors do not receive cement. “Agents are supplying to their regular customers directly and not to the common market”, he said adding that the cement quota for the western region is transported from Gomtu to Phuentsholing depot but he has doubts if full the supply reaches Thimphu.

This doubt could be rooted in fact as there are reports of cement bags not reaching Phuentsholing but being sold to Indian clients midway at a higher price. In the latest case, a transporter was caught red handed.

PCAL is also monitoring activities in all it’s depots across the country.

According to sources the PCAL is taking action against the guilty.

Earlier, PCAL officials suspected supply deflection after it learnt that despite its dispatch of an average of 300 metric tonnes (MT), or 6,000 bags a day to the Phuentsholing depot, the western region, mainly Thimphu was facing a shortage. There were also reports that nearby Indian towns were flooded with Penden cement  meant for sale only in Bhutan.

The main cause of the current cement shortage across the country, according to PCAL, is inadequate supply of cement packaging bags from Bhutan Polymers Company Limited (BPCL).

However, there appears to be multiple causes for the supply crisis. Some contractors blamed the supply shortage to deflection while some attributed it to plant breakdown.

Sherab also cited intermittent supply of cement bags by BPCL. He said the production is hampered as BPCL failed to supply bags in bulk. “We require 32,000 bags per day but they are not able to supply at the moment”.

However, Managing Director of BPCL Kinlay P Dorji said his company cannot be blamed.

“We are having a hand-to-mouth situation but always met the demand,” Kinlay said, “ though the company fails to deliver on rare occasions owing to labor shortage, there are instances when BPCL has supplied more than the required 32,000 bags.”

BPCL is hiring some 15 skilled Indian expatriates to curb its human resource crisis which is the main reason as to why the company failed to supply bags in abundance, according to him. The labor problem is almost solved and production capacity will be restored very soon, he added.

“It could also be because of their own plant breakdown because some machinery are more than 30 years old.”

To this T B Gurung  responded that PCAL confronted plant breakdown some 15 days ago but it was resolved immediately.


Shortages across the country

Its been more than two months and the cement crunch still continues to hinder construction across the country which has led to huge losses for agencies and contractors.

Tashi Tobgyel of Gakhil Cement Agent in Kanglung, Trashigang, said, “Although there is huge shortage, there is nothing we can do when the problem is at the source”.  He added that large scale constructors usually transport their own requirements from the Samdrup Jongkhar depot but due to the  current crisis, contractors are placing demand with Gakhil cement.

Tashi said farmers and small-time contractors who are his main customers have stalled construction works.

In the south, private, gewog and dzongkhag construction works are being hampered. Sunil Lama of Purna Cement Agent in Dagapela said, “We face a lot of transportation problems and in addition PCAL hasn’t been fair with the allotment”.

The Dzongkhag authority has written to PCAL but elicited little response. “Shortage of cement is rampant in Dagana and we hardly receive a truckload in one week even after persistent requests,” he said.

He said there is huge demand from the private contractors as well. “We already accepted payments and had to refund it as there was no cement available to supply.”

Jamtsho of Sanga Cement Agent in Wangduephodrang said it has been more than two months since the contractors started suffering. “I have received orders for more than 5,000 bags of cement from dzongkhag authorities as of now but am unable to meet the demand”, he said.

Jamtsho said, while some construction works in gewogs have not started some have been stalled for weeks. “In the past, officials at the Phuentsholing depot cited transportation issues and now they have this packing bags issue,” he added.

Dechen Wangdi of Dechen Cement Agent in Zhemgang said, “Cement shortage has become a major issue in the dzongkhag since two months. We received a few bags a day ago but the requirement is huge.”

Dawa, a home builder in the capital, who has placed an order for two truckloads of cement said construction activities at his work site is delayed as the supplier notified that cement will be available only after two weeks.

Last year around the same time, PCAL experienced plant breakdown owing to damage of two 30-year old gear boxes which had to be  repaired.

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