Domestic Airports Scam- Part 2: Ineligible contractors give shoddy work and get illegal overpayments in Younphula airport

Bhutan grc Brochures copy-10The draft RAA report on the construction of Domestic Airports has pointed out several irregularities in the construction of the Nu 81.2 mn Younphula Domestic Airport. These include an irregular bidding process causing additional costs, selection of technically non eligible bidders, overpayments to contractors for works not done, poor quality of work done and etc.

As per the report around Nu 11 mn was paid in illegal overpayments for works not done but paid for by the Ministry of Information and Communication. The report also mentions how Nu 10 mn of additional costs was incurred due to irregular bidding process.

Of the Nu 81.2 mn sanctioned for the airport the Draft RAA report covers Nu 76.04 mn of the works between January 2010 and June 2012.

The draft  report has unearthed Nu 152.876 in illegal overpayments and more than Nu 83 mn in avoidable costs out of the total Nu 427 mn spent on the three domestic airports.


Nu 11 mn in overpayments

The Nu 11 mn in overpayments to contractors are for various works but the two main areas are for incomplete earth moving works and fictitious use of an excavator.

As part of the construction the contractor was paid Nu 28.94 mn for removing 382,490 m3 of soil but a joint survey by a RAA and Department of Civil Aviation team found that in reality only 220,443 m3 of soil had been removed.

As a result Nu 8.14 mn had been overpaid to the contractor.

The report says, “It is imperative for the Ministry and the DCA to thoroughly investigate the estimation process which had impeded economy, efficiency and effectiveness in the execution of infrastructure works.”

It also says the Ministry should fix responsibility on the officials responsible for the preparation of estimates besides recovering the extra payment of Nu. 8.14 mn

In another case the contractor Sonam Ugyen and hiring unit had claimed and was paid Nu 2.24 mn as hiring charges for a fictitious excavator that never existed.

The RAA on enquiring about the registration with the Road Safety and Transport Authority found that the registration number was of a tripper truck which had been off road since 2010 and sold for scrap at Nu 20,000.

Other overpayments were for CGI roofs, timber flooring, taxiway, compressor works, and shoulder works and fencing works.


Ineligible contractors chosen

Three firms which are Sonam Ugyen and Hiring Unit, CDCL and Peldang Hiring Unit had bid for earthmoving works for the Younphula domestic airport.

Of the three CDCL was disqualified for giving and alternate bid and Peldang was disqualified after the MoIC tender committee said the company failed to qualify for almost all criteria.

As a result Sonam Ugyen and Hiring Unit was selected as the lowest evaluated bid at Nu 18.78 mn which was 36.54% higher than the estimated cost of Nu 13.76 mn.

However, the RAA on the review of the Tender evaluation report fund that Sonam Ugyen and Hiring Unit has failed to fulfill several minimum qualifications which should have rendered the company ineligible.

The company failed to fulfill experience in works of similar nature, lacked availability of critical equipment, project manager and site supervisor, did not have adequate credit facilities and lacked bid capacity.

In fact RAA found that the company that was disqualified Peldang Hiring Unit had actually fulfilled many of the criteria which the tender committee had claimed it had not fulfilled. It had experience as a prime contractor of  similar nature, had critical equipment and also had a project manager.

The report says, “It is apparent from the above facts, that there existed flaws and ambiguity in the tender evaluation process which resulted in award of contract to a non-responsive bidder.  The Ministry and the Department may comment on the circumstances leading to incorrect evaluation of bids and award of contract to a technically non-responsive bidder posing the risk of quality and progress of work.”

In another case the RAA found that a lone bidder Kuenleg Construction who was selected for Nu 13.49 mn to carry out site development works was actually not eligible as the bidder had failed to fulfill several requirements.

The report says, “The decisions and action on the part of the Evaluation Committee and Tender Committee were not in line with the provisions of the PRR 2009, Standard Bidding Documents on Procurement of Works and tender terms and conditions.”

The report also says that it not only violated the tender terms and conditions but also posed risk of possibility of technically compromising the quality of such vital infrastructure.


Substandard and poor quality works

A joint physical inspection of the runway on 13 September 2012 revealed several defects with the airport. The runway was found to have multiple cracks.

The report said that the occurrence of such defects indicates either poor workmanship due to technical incompetence of the contractor or the materials used were not in conformity with technical specifications.

It also said that the runway not only had cracks, seepage of water and growth of vegetation but also necessitated urgent resurfacing of the pavement to reinstate the operation of the air services.

The RAA report said that rather than spending Nu 8.77 mn in redoing the runway in patches it would have been better to redo the entire runway in a uniform manner to ensure quality works.

The report asks for defects in the runway to be rectified at the cost of the contractor or official responsible for such lapses.

The report also said that the pavement thickness did not meet the designed thickness. The RAA also criticized the fact that the Younphula was the only airport where the CBR test had not been done without which the density of the runway cannot be known.

The RAA also criticized the DCA for accepting a thickness 4.04 mm for the MS angle in the perimeter fencing as opposed to the technical specification of 5 mm.

The RAA also pointed out poor quality cement concrete flooring around the terminal building with undulations, major portions worn out, full of cracks and casting not done as per specifications.


Nu 10 mn in additional costs due to irregular bidding process

The MoIC had called for tenders in 2009 for construction of the Domestic Airport and received six bids but had cancelled the tenders on grounds of budgetary constraints and called for a retender later.

The RAA says that this irregular bidding process resulted in additional cost to government of Nu 10 mn. This is because the lowest bidder in the first tender was 10 mn lower than the accepted bid of Kuenleg construction at Nu 34 mn.

The report also says that Nu 4 mn worth of additional works were awarded to Kuenleg construction without proper tendering process.

The report also says that the cancellation of the initial tender was not justifiable particularly when the financial bids of the six bids were lower than the prepared estimates.

It also says the delay of the construction of the airport by nearly one year failed to achieve the objective of reducing the scope of work and ensuring timely completion.


Doubtful BOQs and deployment of different equipment than specified

The RAA has also pointed out the use of unauthenticated Bill of Quantities or BOQ (list of construction items and their costs) by the MoIC tender committee for tendering and awarding contract for infrastructure works and demolition of three hills.

The report said that there were many estimates for the same work, none of which were found authenticated and considered final. It says, “RAA could not confirm the authenticity of such vital documents giving scope for possible manipulation and abuses during process of contract implementation.”

RAA said that the estimates for the machine hours for demolition of two hills were in fact provided by the contractor without proper basis, legality and authenticity. “There was thus ad-hoc and lack of transparency thereby impeding decision making and effective implementation of the project,” says the report.

The RAA found that the type or specifications of vehicles like excavators and trippers used at the site were entirely different from those committed in the tender documents. This according to the report should have been treated as a fundamental breach of contract but no action was taken.

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  1. Our system has made these few people happy…what a shame on the govt part to push this project and wasting  the money… These people must be fixed…

  2. The Engineer in-charge o f DCA is fully responsible as he didn’t supervise the work properly. Tender evaluation committee also responsible for being made the ineligible contractor to eligible. once the evaluation committee forward the work in the awarding committee, the awarding committee straight away look for the conclusion of the evaluation report and result in awarding the work. So evaluation is very important to check the compliance and requirements asked for.


    Check nandu’s swiss bank account, also pm’s

  4. what about lottery scam RAA??

  5. The tender committee members and contractors of both Batpalathang, Yonphula and Galeyphu airports should be immediately brought to task and fixed them like the one in Gyalpozhing. What had happened to Galephu to Trongsa highway road construction bribery case? We citizens r awaiting to know the results of investigation.

  6. what could we expect when contractor is Minister …

  7. There could be corruption at the highest level. Misuse of power and financial gains. Must be investigated thoroughly and responsibility and accountability fixed even at the ministerial and government level.

    This government is in heck deep in corruption on all fronts

  8. Karma Tshering

    What has happened with the Domestic Airports is nothing short of blatant corruption. This is also an economic crime given the fact that everybody is cutting back and trying to save money. However, i also feel that this is not only limited to this project. 
    Thanks to the failure of this government to check corruption virtually every construction project from farm roads to airports have some element of corruption in them. 
    The above is one of the reasons why we have a rupee crisis. It is becoming very clear that when Nu 50 is the cost of a project the government is paying Nu 100 for it and more and that too to get poor quality works. The government has also failed to take action against engineers who have been caught. 

  9. I am neither a politician nor civil servant. To me the cabinet ministers can not visit construction sites to supervise and check the quality of works. The works were given to contractors and supervised by the engineers who are civil servants. Ministers are at policy lavels and implementers are civil servants from peon to Secretaries. Based on the policy, the Deuty Directors, Under Secretaries, Joint Directors, Directors, Director Generals and Secretaries do all the homeworks throgh Committees and works are affected/ done. If there is flaws and over payments, they should be penalized. It is a team work and whatever is pointed out by audit may not all true. Therefore, things should be revisited before pointing fingers to the Govt. My opinion only

  10. u@laksam, but you sounds politician. Yes of course ministers cannot and should not supervise construction sites. However it is the responsibility of the govt to be accountable for their policy, plan, and execution of those plan. if a department, agency or individual is the culprit, then it is the govt’s  responsibility to take them to task. So govt cannot get away with such lame excuses.

  11. ha ha ha i find all the senior level officials, the circus jokers. they did GNH (gross national happiness) for themselves and GNH (gross national harrashment) for all people like us. So we the common people are fulfilling with second GNH term..People…did u notice one common thing these days …our senior political people are lingering in town these days because now it is time to beg for second round of vote……i made them count my whole families vote for them but not this time…they kept making law which was a kind of punishment for small business people like me. GNH means happiness to all the people and not putting them beyond the bar..”Tobacco band” why was these done? for me it means encourging smuggling and also putting people beyond the bar because our govt. has more budget so that when people are in prison then again govt budget is wasted. have u seen people smoking in dzongs and in RCSC office. GOD rich people can pay tax n buy and even govt vehicle are not inspected in the entry point. Does that bring equality and justice? People please get my point noted. our young leaders have done the research from the very grassroot level which means since they were students and when democracy was not even introduced. I think it is time for the old age brains to take rest. let the new generations come forward and participate for the democracy. I encourage young people in politics so let us all not underestimate them at this point and rather support them when they are forthcoming. As of now we dont need more airports but we ned more roads n better roads. I salute to all the young politicians who are actively taking part in 2013. hats off to them for coming forward. for change, let us all support them.

  12. I too feel the less energetic people should vacate their seat for the more energetic people..I m so happy that a tour guide from paro is being nominated for NC. so now let us all support for young MPs too because they are our future leaders. now it is IT world and some of the senior people even does not know how to operate the computers….so now let us forget them.

  13. To be part of politics, 25 and above is considered to be the suitable age then why do some of our citizen say some candidates are too young. then just make the cutoff age to be 60+ for politics n let the old brains walk in again with politics.

  14. Are your parents not old? Tell them to die or poison them because they are not energetic and burden to you.

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