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