The Bhutanese Leading the way.
During the 21st Annual General Meeting (AGM) of the Construction Association of Bhutan (CAB) held from 10 to 12 May 2024, Lyonpo Chandra Bahadur Gurung, Minister of Infrastructure and Transport, said in the current 13th Five-Year Plan, the ministry is going to focus on quality construction and that there is a huge budget for infrastructure development.
“We will be focusing on the quality infrastructure. To do that there will be increase in specifications, even like estimate which means for any work to be given it will be based on estimate. As of now, for any estimate, contractors can quote while they bid as low as minus 20 percent. So, obviously quality will be compromised.”
“I have submitted proposals to the Cabinet where what we are proposing is, let’s not go to the minus 20 percent, maybe they can work to minus 10 percent. If this proposal goes through then as a government, I am assured that the quality will be there.”
Lyonpo said the ministry aims to help the contractors. “In order to do that we will be fair to them by having fair agreement, quoting the estimate up to minus 10% if the proposal is accepted, and release their payments on time,” Lyonpo said.
“I believe, as of now, sometimes it takes up to 3 months to release the payments to the contractors although they have completed their works. It will be challenging for the contractors since they have to pay the banks and they will keep accumulating the interests. Our delay in releasing the payment will cost the contractors which they have to bear,” he added.
He shared that as for the loan deferment, the government have already informed the contractors to sit personally with the banks and talk through and justify if they deserve the loan deferrals.
He said if the government starts giving complete support, then there are few contractors who are very well off and comfortable not deferring. So, the banks will be the best to know who deserves deferrals and not.
However, if there are too many contractors who are not getting loan deferrals and there are issues, government might then intervene.
He shared that contractors are not happy since they are not getting the payments on time and they feel that even the contract agreement is so lopsided that most of time it is in favor of the government.
Lyonpo shared that to motivate them, the ministry along with Ministry of Finance and Ministry of Health on 16 May 2024, had a tri-partied meeting in presence of CAB and have decided to release bill payments to contractors within 21 days of the work completion.
He said contractors will now be paid within 3 weeks from the date of submission of valid running account (RA) bill.
Some of the other outcomes from the meetings were, proposal to establish a Contractor Development Fund by deducting 0.05 percent from winning project bids, discussion on community contracting protocols to address unemployment and quality concerns, request for immediate loan and bank guarantee consideration after clearing Non-Performing Loans (NPL).
