DHi to review pay structure while MoF corporations hope for a hike

In what has almost become a time honoured tradition, a civil service pay hike is usually followed by a pay hike by Druk Holdings and Investment (DHI) companies and Ministry of Finance owned (MoF) corporations.

The DHI Chairman Dasho Sangay Khandu said that DHI would be conducting a study to review the pay scale and structure for DHI employees.

The DHI Chairman insisted that any review of pay in DHI would be independent of the civil service pay hike.

He also said that the government’s pay revision report which says that state-owned enterprises pay hike should not exceed 15% of the civil service is not applicable to DHI, which as an autonomous body, has its own Royal Charter to carry out independent pay reviews and also has the Companies Act to back it.

Interestingly, a senior figure in the Ministry of Finance, on the condition of anonymity, disagreed with the DHI Chairperson’s views and said that DHI would have to follow the 15 percent rule for regular employees while corporate executives on contract were out of the purview of the rule.

“The civil service pay hike has nothing to do with any DHI pay review, and in fact, even during the period of the last government, the DHI Board took an independent decision on the pay hike for DHI companies,” said Dasho Sangay Khandu sticking to his position.

He said that a review would be needed not only in terms of seeing the need for a hike but also where it was really needed and also look at the differences within the DHI itself. He said that though a few top people in DHI companies earned more than civil servants, there was not much of a difference when it comes to lower level staff.

He said that the DHI pay hike system has to be independent from the civil service so as to be able to respond to inflation and also not always following in the footsteps of civil service pay hikes just for a mere hike.

He, however, clarified that the real need for a higher hike would be felt at the lower level staff of DHI and there was not as strong a necessity of revision for senior level staff.

DHI Director Damber S. Kharkha said that after the last government hike of 2011, DHI had kept a provision of allowing corporate salaries to be higher than civil service salaries by up to 15 percent. He said of this, 5 percent was corporate allowance and 10 percent was a performance allowance given based on performance. He said that the DHI Board would take any final decision with regard to pay hikes and any decision would be also based on the individual companies’ capacity to pay.

He said salary levels across DHI companies were mainly uniform following a 1-15 or 1-17 grading system and there were differences mainly on the account of different technical or hazardous allowances.

Meanwhile, DHI will find it difficult to avoid any hike in the near future, given the already increased expectations and clamor for a hike, from DHI owned and controlled companies.

Bhutan Power Corporation MD Dasho Bharat Tamang said, “The quality and reliability of service will be affected if there is no hike. Already many bright people are leaving BPC for better opportunities.”

He said initially when corporations were set up and delinked, the civil servants were given up to a 45 percent additional allowance to leave the service and join a corporate structure. He said this gap was reduced to 25 percent by 2006 and finally to 15 percent by the former government.

He said that if there is no hike then the lower level staff would be the hardest hit by inflation.

Bhutan Telecom MD Nidup Dorji said that though his company was waiting for a confirmation, his employees had some ‘expectations.’

Druk Air MD Tandin Jamtsho said that the normal practice has been to give a hike to DHI companies whenever there was a government hike. He said that Druk Air has already lost 15 to 16 people ranging from pilots, engineers, air controller staff and commercial staff as they went for better opportunities. He said his staff is expectant that the DHI and government would also discuss and approve a hike for Druk Air staff.

A Dungsam Cement Corporation official was, however, not sure if they were eligible for a hike given that the company had just started and was still in the red.

The 6 DHI owned and 3 DHI controlled companies have a total of around 6,274 staff that draws a total salary of around Nu 2.087 bn compared to the 24,000 strong civil servants that will draw Nu 9.283 bn after the recent pay hike.

So if DHI companies are given an average 20 percent hike then it would come to approximately an additional Nu 300 mn or more compared to the additional Nu 1.799 bn for civil servants.

In all of this action, the employees of SOEs under MoF like Bhutan Development Bank Limited, Bhutan Post, Bhutan Broadcasting Service, Kuensel, Food Corporation of Bhutan and Bhutan Agro Industries Limited are also expecting a hike.

MD of FCB Karma Nidup said, “We will be able to give a hike if the government agrees because though we have a huge social mandate, it is critical for our employees to be motivated and one way is by good perks.” He said the basic salary structure excluding allowances was lower than even that of the civil service.

The BBS MD Thinley Dorji said that his organization would wait for the government directive. He said that in the past it had taken up to a year for BBS to process and get the pay hike after it was given to civil servants.

The Finance Minister Lyonpo Namgay Dorji said, “As far as these corporations are concerned, they would have to manage from their own revenues without exceeding 15 percent more than the civil service pay. For companies that cannot pay, the MoF cannot commit anything at this point and we would discuss the issue at the right point of time.”

According to the Pay Commission report, the total pay and allowances for SOEs is currently Nu 478.53 mn, which is about 16 percent of their gross revenue. The report says that if the pay of SOEs is kept 15 percent higher than civil service pay scale then the cost would be an additional Nu 71.78 mn.

The report says that only SOEs like BBS, Bhutan Post and Wood Craft Center would not be able to meet the hikes on their own. The report says that the government may not provide any funds for meeting the salary revision cost.

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