Managing the Assets of the Zhung Dratshang

On the auspicious occasion on Zhabdrung Kuchoe on 30 April 2023 His Majesty The King granted a Royal Charter for the establishment of the Gerab Nyed-Yon, an autonomous entity to hold and manage the the assets and investments of the Zhung Dratshang (Central Monk Body).

It all started back in 2019 when the Royal Project for the Zhung Dratshang started and the former Deputy Chairman of the National Council from 2013 to 2018, Tshering Dorji was appointed as its head.

The low key and small office of two people manned by Tshering and a colleague (with a recent third addition) tucked away in an attic of an old building in Lanjophakha had the enormous task of working to create an autonomous agency that would professionally manage the Dratshang’s assets like lands, shares and buildings and income from them, and be under the Zhung Dratshang.

This was a transformative moment for the more than 400-year old institution established by Shabdrung Ngawang Namgyel and initially there was a certain reluctance, and they were not very forthcoming.

The need to keep the Rituals going

Tshering said that to ensure a breakthrough and approach them in such way to not alarm them they studied the fears and doubts of the Zhung Dratshang.

Not knowing the intention of the project the first fear of the Zhung Dratshang was that over the decades as Bhutan modernized the government had taken a lot of land away from the institution for developmental purposes.

A historical example is that the current Golf Course once belonged to the Phajoding Monastery under the Zhung Dratshang. A more recent example was the loss of a large tract of land  to the Diplomatic Enclave project in Hejo.

The second fear was that a lot of the lands of the Zhung Dratshang over the centuries were Yojey land which are either contributed by people who wanted the institution to do their last rites and prayers or by people as offerings during the time of religious teachings.

Each of these lands had a story of its own and over time they became a source of revenue for the Dratshang to do its many rituals across the country. The Zhung Dratshang feared that any major changes or the loss of control over these lands would affect these daily rituals which were mainly for the benefit for all sentient beings, benefit of the Tsa-Wa-Sum, during special Buddhist events etc.

The office did a study and found that the Zhung Dratshang’s 327 monasteries and religious centers in 20 Dzongkhags did 9,037 days of Rituals throughout the year and spent Nu 310.878 million (mn) on it of which the government only gave Nu 60.65 mn which meant the Dratshang had to come up with around Nu 250 mn on its own through its assets to do the rituals.

The expenses of the rituals were around the meals, Chadri, Tsho, Gep (fee) etc that went into these rituals.

Cutting down on these rituals was not an option for the Zhung Dratshang as these had to do with the well being of the country and people and certain rituals were to appease various powerful deities.

The above does not include the many special and extensive rituals carried out during very challenging national times like the recent COVID-19 pandemic for which the government was not charged with any funds.

The Nyendhar or cash offerings made in monasteries and prayers are not accounted as revenue, but the Monasteries often use the money to make up for budget shortfalls as not all its monks get government get stipend, for constructions of quarters and other daily expenses.

The above figures also do not include the annual stipend and some budgetary support the government gives to the Zhung Dratshang, but here it must be noted that the stipend support is minimal at around Nu 1,700 per month per monk and some do not even have that. Also, while major constructions are budgeted a lot of other construction like dining hall etc are constructed by the monasteries themselves by raising their own funds.

To illustrate how much effort can go into the rituals, Tshering said that there are 16 continuous days in a year where monks do rituals for around 23 hours in a day with very little sleep. Also, ordinarily when civil servants reach office by nine the monk body would have long finished its morning rituals with a separate set to be done in the evening.

The monk body does not have a modern Terms of Reference system or management practices but Tshering was amazed by how people knew their role and how they managed and coordinated things very well even for the smallest functions.

The Assets

In the popular imagination the Zhung Dratshang is seen as a very rich institution with a lot of land and other assets.

However, when the office looked into the assets of the Zhung Dratshang while there were assets it was not as much as popularly imagined.

The Zhung Dratshang owned 35 buildings and housing structures of which 25 were in Thimphu, 4 in Phuentsholing, 1 in Paro, 3 in Wangdue and 2 in Punakha.

The total annual rental income from these were Nu 66.14 mn but after paying bank loans for these structures the actual annual income left was only Nu 36.69 mn.

In certain cases, the rent was not even able to meet the loan payments.

In terms of its income from leasing out land it was only Nu 6.9 mn mainly given at very low and below market rates.

In terms of shares it had invested Nu 300 mn in companies like Bhutan National Bank, Royal Insurance Corporation Limited, Bhutan Ferro Alloys Limited, Pendent Cement, Bhutan Tourism Corporation Limited, Bhutan Plywood and Dungsam Cement.

When it came to its urban land holdings within Thromde areas the office looked at the five Dzongkhags where the majority of the Dratshang’s urban land assets are.

It owned a total of 112 acres of urban land consisting of 241 urban plots in the thromde areas of Thimphu, Phuentsholing, Paro, Wangdue and Punakha.

Of the above, the maximum urban land is concentrated in Thimphu with 93 acres, Phuentsholing with 16 acres, Punakha with 1 acre, Wangdue with 69 decimals and Paro with 6.23 decimals.

However, when it comes to urban land ownership the ownership is not all directly under the Zhung Dratshang but is owned by different monastic institutions under it. The 93 acres in Thimphu are owned by 11 different monasteries with only 31 acres owned directly by the Zhung Dratshang and other being 17 acres by Dodeydrak, 6 acres by Phajoding etc.

The same is in the case of shares which while registered under the Zhung Dratshang but is again owned by different monasteries. There has also been no professional management of the shares.

The office is still compiling the total other non-urban lands owned by the Dratshang but generally these are concentrated in Paro, Punakha and Wangdue.

Taking the example of Paro where the non-urban land is most lucrative there are 104 acres of Kamzhing (dry land), 67 acres Chuzing and 151 acres of built up land where its monasteries and institutions are located.

The main aim of the autonomous office will be to first focus on the 112 acres of commercial urban land in the five Dzongkhags and then after that in rural areas where land could be leased out for purposes like commercial agriculture etc to youth groups and others to improve food security.

Dratshang got a raw deal in leasing land

However, even as the office looked into the 93 acres’ landholdings of the Dratshang in Thimphu there were several issues.

Before urbanization these land was mainly used to grow paddy and so at least generated food for the Dratshangs, but after urbanization they had to be left fallow and while their value increased sharply the Dratshang could not make money from it. This is when the idea of leasing land came in.

While the Dratshang Land is nominally under the charge of the Dratshang Gerab office the actual Thrams and ownership belong to the respective Monasteries and so there was a wide difference in rates and lease terms.

The first lease happened from 2012 onwards when Draana Goenpa and Dodeydrak started leasing out their lands with different rates and terms and it then built up from there.

The lands were normally take on lease by Jindas or sponsors of prayers in the monasteries with the understanding that they would take the land and make use of it to by giving lease money. Some land was taken on lease by the descendants of those who had offered the land in the first place and there were others too.

The Zhung Dratshang in an effort to ensure uniformity in rates and rules in leasing land brought out a Rules of Procedure in 2016 but it was not very effective.

The result was that of the 93 acres in Thimphu the lands had been leased out at very unfavorable rates to the Dratshang.

There were 15.1 acres of land with 56 plots which had been leased out and had buildings and other structures built on it.

The office from 2019 had asked additional lease lands not to be given and so there were 3.8 acres of land coming to 20 plots where the agreement was done but the land was not given.

There were then 4 acres coming to 10 plots where the agreements were not in line with the Rules of Procedure and the final category were 5.4 acres with 14 plots where there were applicants some of who even had given security deposits.

The lease periods given at very nominal rates were for up to 30 to 40 years with some even being given on lease for ‘generations.’

There was a real fear within the highest levels of the Zhung Dratshang that these lands cannot come back to the Dratshang easily and that some of them had been lost for good. The Dratshang was also unable to collect the nominal lease rent on time as some of the tenants kept payments pending.

Tshering Dorji said that the lease terms were very unfavorable to the Zhung Dratshang.

Of the 93 acres of 211 plots in Thimphu the office found that 26.3 acres could not be used as they were either in steep slopes, were forested over or were far away with no easy access.

This left only 66.7 acres that could be leased out but as pointed above around 36 acres were already leased on in various stages of being leased at very unfavorable terms and rates.

The Zhung Dratshang was this left with only 30.3 acres to actually lease out in Thimphu.

Solving the Zhung Dratshang’s land woes and earning trust

The Dratshang wanted the the new office to solve these deep real estate issues. The office was given the power of attorney by the Dratshang to look at these issues.

In the case of those who had built on 15.1 acres of land with 56 plots it involved 70 individuals and the office had five rounds of meeting with them individually and it was impressed upon them that they had taken their own risk to build on Dratshang land and even taken advantage of the Dratshang and such structures are against the law.

After five meetings everybody agreed to either take compensation for their structures and for the bigger and more expensive buildings the lease rent was made much higher closer to commercial rates and the lease period was decreased.

Then for those who wanted to lease land the option was given to give in sealed bids and what was once going for Nu 5 per square feet per year got up to Nu 90 per square feet per year. Here around 4 acres were leased in a commercial manner and most of the other lands were kept with the Dratshang.

The office could ensure that of the 66.7 acres most of the land was recovered back and even those given on lease were at commercial rates.

The office solved the issues amicably without a single case going to court.

Tshering Dorji said it was the above initiative of the office that helped it to earn a lot of trust and goodwill of the Zhung Dratshang who were now completely on board with the reforms.

An inventory of the commercial usefulness of the land was made and it was decided that for those areas not to be used for more than five years they could be given on 10 and 15 year leases provided no permanent structure is built on it.

While the lands are in Thimphu they are located mostly in Babesa, Hejo and Changbandhu. Tshering wondered if the Dratshang lost out during the land pooling process in the past.

He said the Dratshang had also not factored in the much higher property taxes.

The Gerab Nyed-Yon office

Tshering Dorji said that the project is not the Gerab Nyed-Yon office as the project with the Royal Charter will now form this office. ‘

An Advisory panel will first be formed Chaired by one of the Lopens and with the DHI CEO, Finance Secretary, Dratshang Secretary and a representative from His Majesty’s Secretariat as members.

They will recommend a list of potential board members for the Gerab Nyed-Yon which will be submitted to the Dheumang Lhentshog which is the highest decision making body of the Zhung Dratshang with the five Lopens and the Je Khenpo, who will have to finalize and endorse it.

The board members being autonomous will be accountable to the Dheumang Lhentshog and hence the Zhung Dratshang.

The board in turn will form a secretariat and select its head who will run the autonomous Gerab Nyed-Yon’s day to day operations.

This organization will professionally manage and commercially operate the various assets of the Dratshang like the buildings, land and shares.

It will be run on a company business model.

The revenue generated from this will go entirely to the Zhung Dratshang. The first priority is to ensure that the various rituals worth Nu 310 mn per year will go on undisturbed.

Currently when monks retire at the age of 60 they have to leave the Dratshang and there is nothing for them. It is hoped that the surplus funds will be used to take care of their welfare.

The monk body unlike the civil service or others does not have a fixed welfare scheme that gives funds when monks die or their parents die. The semso is only given if there are funds given by donors and sometimes there is nothing to give. The fund could help here too.

The preamble of the Royal Charter first acknowledges the rich legacy and sacred responsibility of the Zhung Dratshang in preserving and promoting the spiritual heritage of the country. It affirms the importance of Buddhism and the principles of non-violence and compassion for the well being of sentient beings.

Thirdly it recognizes the historical importance and continued blessings of the rituals conducted by the Zhung Dratshang for the benefit of sentient beings and the Tsa-Wa-Sum.

It takes cognizance of the fact to provide adequate support to conduct its spiritual responsibilities, and the importance of Zhung Dratshang as an institution to remain in perpetuity.

Tshering Dorji said that the Zhung Dratshang are so appreciative of the organization and the achievements so far that they have kept the original Royal Charter in the Machhen and they plan to celebrate the charter in their own way.

This is a quite and low key transformation that has worked in the Zhung Dratshang with one person appointed by His Majesty using an attic office and another colleague.