In a complainant’s letter to the Anti Corruption Commission (ACC) alleging large scale corruption in the sale of Gypsum to Nepal from the State Mining Corporation Limited’s (SMCL) Pemagatshel mines (see main story on pg 1) one important and related aspect is also alleged corruption in its transportation from Bhutan to Nepal.
The complainant alleges that in terms of transportation a company called East Bhutan Private Limited (EBPL) has been selected without tender to do the transportation from Bhutan to Nepal in collusion with SMCL General Manager Marketing and Sales, Sangay Rinzin and SMCL Marketing Specialist Kumar Pradhan.
Illegal cash collection
He said that EBPL collects illegal money in cash which is a minimum of Nu 3,000 from each truck for each trip with amounts going well above that too. He has also given the phone numbers of 85 drivers who ply Gypsum from Bhutan to Nepal under EBPL and have paid this illegal money as proof.
The complainant told this paper that this transport scam is an important part of the Gypsum price scam as the transport cost is inflated on paper and the difference is kept by EBPL in cash from each diver for each trip and the amount is huge and runs into millions.
ACC is doing some preliminary enquiry into the case within Bhutan but given the external nature of the case The Bhutanese looked at it too.
As per the official system SMCL is only responsible for mining the Gypsum and delivering it up to the stockyard or depot in Samdrupjongkhar. After that the buyers of the Gypsum who are in Nepal have to arrange the transport themselves.
The Nepal syndicate chose to hire East Bhutan Private Limited (EBPL) for the transport logistics and even to pay advance money to the drivers. The money is sent to EBPL from Nepal.
The complainant alleged that this arrangement is part of the larger Gypsum scam where EBPL has been deliberately hired so that it can also collect illegal additional transport fee from drivers which ends up driving the price of Gypsum down for Bhutan as Kumar Pradhan and others collect money illegally from the drivers.
The complainant alleged that in the real unofficial deal Kumar Pradhan and others had not only fixed a lower price for Gypsum with the Syndicate (see main story) but also mandatorily offered EBPL’s transport services which the Nepal Syndicate had to accept.
The Bhutanese found that Kumar Pradhan helped found the EBPL along with a former Druk Satair Administration head Kuenzang Leki and a former Druk Satair CEO Sangay Wangdi.
Kumar still has shares in EBPL and his younger brother also works as a manager there.
The drivers confirm illegal cash collection
Of the list of 85 drivers the reporter randomly chose seven drivers to talk to from the list. Their statements are all with the paper but their identities are not being revealed to protect their jobs with EBPL and the Nepal syndicate.
All of them reported Nu 3,000 or more being cut in cash per trip in Bhutan and no receipt being issued for the same.
Driver one said he has been doing this work for a few months now and he was surprised when people in Bhutan cut Nu 3,000 per trip from his transport advance to take the Gypsum from Bhutan to Nepal. He said he was told by a Bhutanese that it is cut from all drivers per trip and was asked to ask the other drivers.
He said he consulted the older drivers who all affirmed such an amount was cut.
Driver one said no receipt was given to him for the cash deduction.
Driver two said he has been ferrying Gypsum for around 10 years. He said that this 3,000 amount is being cut by Kumar Pradhan of SMCL in Bhutan. He said the calculation is Nu 100 per ton as each truck carries around 30 tons.
He said 3,000 is actually the minimal amount as currently trucks are scarce because many of them are ferrying illegal coal from the Indian state of Meghalaya to Guwahati. This is a separate coal syndicate or mafia in the north-east that operates from Assam.
Driver two said that when this illegal coal business was not operational or when there are excessive trucks then Kumar and his colleagues even deduct Nu 8,000 to Nu 9,000 per truck per trip. He said the drivers are desperate for work and so do not protest. No receipts are given again. He said this amount is calculated based on Nu 100 per ton which comes to Nu 3000 and the remaining Nu 5000 or 6000 is cut from the fare directly.
“So the fare for a place may be Nu 1,300 per ton but that is only on paper as the driver may get just Nu 900 or Nu 1000 per ton,” said driver two.
Driver three said that if a driver is supposed to get Nu 10,000 advance payment on paper the company in Bhutan deducts Nu 3,000 in cash if not more. He also said that this deduction goes up when the coal business in Guwahati is not doing well.
Driver four who has been plying Gypsum for around 5 years said that the official rate maybe Nu 1000 or Nu 1200 per ton on paper but only Nu 900 or so is given to drivers. He said that Bhutanese Gypsum goes to big importers first and then goes all over Nepal. He also reported that receipts were never given when this money was cut in cash from their advance by EBPL.
He said sometimes he would be angry that he is being cheated like this especially in a neighboring country like Bhutan but he also did not want his truck to go empty.
Driver five also confirmed that Nu 3,000 or more gets cut with every trip in Bhutan and the same is done to all drivers plying Gypsum from Bhutan to Nepal.
Driver six said he has been in this line for eight to nine years and money does get cut in Bhutan with no receipts issued.
Driver seven also confirmed the same as all the above.
If one goes by the statement of these seven drivers, then every ton of Gypsum being exported from Bhutan faces an unofficial transportation tax of Nu 100 at the least going to Nu 200 per ton and more. This money is collected in cash in Bhutan by Bhutanese without receipt which means it is not accounted for and not taxed.
If 45 trucks depart for Nepal a day then then cash collection even at Nu 3,000 per truck will come to Nu 135,000 a day and Nu 4.05 mn a month or around Nu 48 mn in a year.
Given that the Nepal syndicate is paying for the transport their willingness to endure losses on the transportation raises the question on what concessions have been given to them on the Gypsum export front or prices for that matter.
Allegations against Kumar Pradhan
In the meantime, a former employee of SMCL now based in India came forward on the condition of anonymity and alleged that while Kumar Pradhan on the surface may have nothing to his name he said around 14 to 15 trucks in India are registered in the name of of his wife who is an Indian citizen.
He said that Kumar Pradhan through his wife and relatives also has stakes in transport companies in India of which one company’s name is Sikkim-Kalimpong Transport. He said that Kumar Pradhan has been deliberately giving priority to supply Gypsum to Nepal.
He asked how a person sitting in a government organization in Bhutan is allowed to misuse his chair and collect such assets.
An Indian trader who did many years of business with Druk Satair also came forward to make similar allegations against Kumar Pradhan in terms of owning multiple trucks and assets through his wife.
An illegal partner in India
The complainant also alleged that EBPL had illegally appointed an unlicensed transport partner in India called Hirimba Enterprsie who is not allowed to do the transportation business by the Assam government due to a lack of proper license.
A November 2020 letter from the District Transport Officer under the Assam government calls on Hirimba to not illegally park trucks (Gypsum trucks) at Darranga without the license.
The complainant said he had brought up this matter of an unlicensed Indian transport partner and other written complaints with supporting documents against EBPL to the trade office, local RRCO, RSTA, BCCI and local RBP in Samdrupjongkhar but no action was taken.
Kumar Pradhan and Sangay Rinzin respond
SMCL General Manager Marketing and Sales, Sangay Rinzin denied that he or SMCL had anything to do with the transport of Gypsum from Bhutan to Nepal and said that the Nepal buyers arrange their own transport.
SMCL Marketing Specialist Kumar Pradhan admitted that his wife who is an Indian citizen has 5 to six trucks registered in her name but he denied owning 15 trucks as alleged. He claimed his wife’s trucks were bought on loan.
On being asked he also admitted to being one of the founders and shareholders of EBPL which he said was started as Druk Satair was winding down as a means to earn livelihood after the company shut.
He said he was to join EBPL but SMCL wanted him to stay on and so he stayed. He denied allegations of collusion or owning any other assets. He also denied Nu 3,000 or more being cut from trucks.
EBPL’s current Director and also shareholder is Kuenzang Leki who formerly worked as the administration head of Druk Satair.
He denied that 3,000 or more per truck per trip is being being cut. He said most of the buyers are charged only a service fee of Nu 20 per ton for logistic services in Bhutan and recently a couple of them were charged only Nu 50 per ton. He said all this is accounted for and audited.
He said that Hirimba Enterprise is not linked to EBPL in any way and that Hirimba Enterprise must be collecting the parking fee in India on its own.
Official challans show that the Nepal buyers send in advance money to EBPL to pay advance money to drivers which Kuenzang acknowledged is a service. However, it is not clear why the advance money is not sent directly to drivers and has to go through EBPL.
The remaining amount is paid to drivers on delivery of goods in Nepal by the syndicate there.
Kuenzang alleged that the complainant and his Indian transport partners were unhappy not to get the Gypsum transport business chance and are hence creating all this controversy.
However, while Kuenzang and EBPL denied any ties with Hirimba the paper got access to an 25th April 2020 letter with an EBPL letter head signed by Kuenzang reappointing Hirimba to hire trucks to transport Gypsum for EBPL.