Ex-Civil Aviation DG liable in Audit of domestic airports allows arbitration on RAA report as new DG of CDB

In what some are already calling a case of conflict of interest, the former Director General of the Department of Civil Aviation, Phala Dorji, who is held accountable in the RAA report on domestic airports, has permitted an arbitration on the RAA report. He has done this in his new post as the Director General of Construction Development Board under Ministry of Works and Human Settlement. 

The RAA report coverd the construction of domestic airports from 2010-2012 when he was the DG of Civil Aviation.

The Director General in a letter addressed to six members of the arbitration committee of the Construction Development Board lists out the agenda for the 21st meeting of the National Arbitration Committee.

The letter says, “This is to apprise that Tashi Kunzom Construction has requested for arbitration with DCA, MoIC in connection with recovery for the RAA’s observation. We hope to be able to convene the meeting on 2nd April 2013 in CDB office depending on the member’s availability and convenience please.”

A copy was also sent to the CDB Chairman Lyonpo Yeshey Zimba and the Auditor General.

The application for arbitration was put up by the contractor of Tashi Kunzom on 8 March 2013 in relation to RAA observations on Gelephu Domestic Airports and the letter calling for an arbitration meeting was sent out by the DG on 22 March 2013.

The letter from CDB has put the RAA in an awkward position. An RAA official on the condition of anonymity said, “We as a constitutional body are accountable for our reports only to the Parliament and the Court of law which can summon us. Not an arbitration committee.” The RAA official indicated that the RAA is not under any obligation to cooperate with the committee.

An official also on the condition of anonymity noted that the arbitration committee is usually meant for disputes of non-payment, work differences or disputes between a contractor and a client and arbitrating on RAA findings is an unusual development.

The official also noted that the RAA report had in fact been sent to ACC for further investigation.

The maximum irregularities were noted in the Gelephu Domestic Airport by the RAA report where the report noted various illegal excess and unjustified payments for works not executed.

The letter by the Construction Company says that the disputed amount is Nu 114.15 mn which is being denied to them on the basis of audit objections.

The construction of Gelephu Domestic Airport at Gelephu was awarded to Tashi Kunzom Pvt.Ltd at the contract amount of Nu 192.22 mn with contract duration of 10 months.

The work was started on July, 2011 and completed on April, 2012. The final contract price was Nu 307.33 mn and there was no delay on the completion of the work.

The letter from the company says that the work was jointly measured and paid. However the project was audited on November, 2012 and had come with number of recoveries.

“We have submitted our justifications on the recoveries, however, it has been realized that the matter cannot able to resolve without an independent review as amount involved is huge. It was decided by the Tashi Kunzom construction to move the case for arbitration for early and fair resolution,” says the letter sent to CDB.

DG of Construction Development Board, Phala Dorji, however, denied that there was any conflict of interest. He said, “I won’t be sitting for the arbitration committee meeting to avoid conflict of interest.” He also said that the RAA and MoIC are having a dialogue on the report.

“When somebody submits application, we have to accept the application,” he said.

A CDB official said that CDB is an organization, which just receives application for the arbitration and leaves it for the arbitration panel to arbitrate.

One of the panel members for the Arbitration, Phuntsho Wangdi, and the Director General of Bhutan Standard Bureau said, “Accepting and rejecting the application from the client for arbitration by the DG of Construction Development Board, will not amount to conflict of interest as he is the head of the organization.”

He also said with no Act on arbitration, it is difficult to deliberate on the issues raised by the concerned clients.

“We are just acting on the request of the client and the contractors coming in dispute,” he said.

Besides, he also pointed out that there were numbers of cases similar to this nature.

Another arbitration committee member and Construction Association of Bhutan President Aum Phub Zam said, “It so happens that he was the former DG of Civil Aviation but it is normal to call for the meeting.”

However, she said that it is not clear what will happen if the committee makes a decision either way.

However, though the DG will not be sitting on the panel what will raise eyebrows is the fact that  arbitration meeting was made possible by the same DG in whose interest it is to get audit clearances on the RAA Domestic Airways report and under whom the violations mentioned in the RAA report occured.

Chencho Dema / Thimphu


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  1. Once again the bhutanese ego in play.

  2. Wasn’t he the same person who was the chairman of the selection committee for the selecting the present MD Bhutan Post  and held responsible for corrupt practices by ACC? 

    We need to put a stop NOW otherwise it looks like there will be no end to his corrupt practices. ACC needs to take action NOW.

  3. Dear Readers

    I have few ?? to be ask: Now in the comming 2nd term election what should look for.
    Atleast those of us who knows the inside of the system of our governence we should make sure there should have a huge change in the system of governence. There are corruption in many of the organisation. Specially in the upgradation , selection for jobs, opportunities for better pay and training. I have seen huge corruption on a website about Punatshangchu employment. please visit PHPA II website. .

  4. This Phala is is JYT guy, he can do anything as long as DPT in Govt. He was supposed to be fired long back for fraud practice in several cases….but he wont go,until JYT there, he is part and parcel of DPT corruption package.. we can only dream such people can be fired…

  5. I think we should not look for sides in an egg. The CDB was established to arbitrate on issues concerning contractors and clients. In this clearly there is a huge unpaid amount to the contractor. If I’m not mistaken a lot of this must have loan implications which would impact the contractor. therefore it is necessary for the CDB to intervene. 

    If the government has not followed proper procedures, it doesn’t mean they should bully the private contractor that has done the work and not pay. So something should be done to ensure that contractors are protected as well. Otherwise the government can just decide not to pay until the RAA issue is resolved. By that time the contractor will be largely impacted by the bank’s loans. 

  6.  We applaud the TB for bringing out these issues. What has happened to the other media? Kuensel, BBS…muzzled by the government? 
    As for Phala, the noose is tightening on him. To set an Arbitration Committee seems like  joke and a last gasp.  Go ACC we want a clean government that will benefit the poor people.

  7. Benefit the poor lo! Do not give shit, Poor will remain poor and rich will become richer because the suck the poor more often then not!

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