The Bhutanese Leading the way.
According to Thimphu Thrompon, Ugyen Dorji, the cause for the cost escalation for Multi Level Car Parks (MLCPs) remains a mystery, but KCR Private Limited has its own explanation for the escalation.
The Thrompon said that it is a Public-Private Partnership (PPP) project, and the private partner must bear the risk, as the cost increase or decrease is irrelevant to the Thromde.
“We don’t have to get involved because we operate on a concession basis. Thromde didn’t check this one from their end, but whatever the reason, I don’t think it’s the kind of risk we should be taking. What matters to us, is the quality of the work and the completion of the project. I believe KCR will try to handle it on their own,” he said.
He said that KCR claims that the cost increased due to design, however, according to the PPP project model, this must have been addressed first.
“They initially stated that the cost would be Nu 480 million (mn) in 2014 but later stated that it had increased to Nu 850 mn in 2020. Thus that is their entire risk. They must take care of it according to the agreement, and whether it is for 20 or 30 years, KCR must run it, but at the end of the day, they must return to us,” he said.
He also said that KCR is supposed to run the MLCPs for 22 years, after which the property will be Thromde’s, and KCR’s role will be to deal with the bank if the bank has granted them a loan.
“We can run after 22 years, and if we can’t, we’ll re-tender the project to people who can. KCR will also have an edge because they already have experience and can return to bid for tender. They may be able to come up with a suitable package for us now that they are aware of the project,” he said.
He added, “My colleagues raised numerous difficulties about MLCP as soon as I joined the office, but I was aware of PPP bids and quickly directed them to form a Contract Management Committee (CMC). The issues relating to the MLCPs will be handled here on by CMC.”
As per the Thrompon, Thromde has, for the first time, formed CMC, and they are already moving in the direction of resolving the issues and moving forward, which was never done before, and was left to individuals, as well as management members who did not want to take the risk of joining because the project belonged to the previous management.
“With my arrival, I informed them that we are new management and new council. So, if we don’t go into it and solve it, it will be a loss for the country because at the end of the day, it’s public property. The goal is to decongest and handle traffic issues, but if we don’t truly get involved and try to solve it, I don’t think the goal will be met, and there will be no value in us being here,” he said.
The Anti-Corruption Commission (ACC) is looking into the MLCPs which is Bhutan’s first PPP project between Thimphu Thromde and KCR Pvt Ltd after the cost of the project soared from an estimated Nu 480 mn in 2014 to Nu 850 mn in 2020.
