It has been learnt that the Office of the Attorney General (OAG) has dropped the Abuse of Function case against the former PDP Ministers Dasho Dorji Choden of Ministry of Works and Human Settlement and Namgay Dorji of Ministry of Finance.
The ACC had charge sheeted an Abuse of Function case under section 58 of the ACC Act case against the two ministers and then MoWHS Secretary Phuntsho Wangdi for the direct award of a 2.75 km stretch of double laning of the Nobding-Dungdungnesa road on the Northern East West Highway to Empire Construction at Nu 39.40 mn.
The direct award had been in return for Empire Construction voluntarily agreeing to allow the MoWHS to terminate his 2.5 km rocky Trongsa-Yurmu stretch, the tender for which he had won at Nu 39.40 mn.
The initial formation cutting for this Trongsa-Yurmu stretch work to transport heavy electro mechanical equipment to commission the 720 MW Mangdechu project was going behind schedule. However, legally he still had 10 months left and so if he did not agree to the voluntary termination and there were delays then Mangdechu Hydroelectric Project Authority (MHPA) had made it clear that the loss to the MHPA would be at Nu 22 mn a day.
To get him to give up the work and avoid a drawn-out arbitration and legal battle with the contractor, the Ministry said he would be paid for the work he did so far and he would be given a similar work through Direct Contract. The rate fixed for the direct award was at the departmental estimates and not the lower tender rates average. Here the ACC asked for Nu 10.82 mn to be recovered too.
The ACC said Dasho Dorji Choden and Phuntsho Wangdi put up the note sheet and Namgay Dorji approved it for which he does not have the authority.
Namgay Dorji had earlier said the Abuse of Function charge for direct award of work does not apply as the Public Finance Act under section 105 states that MoF on good grounds can approve a departure from MoF regulation or instruction. He also said under section 22.214.171.124 (g) of the then procurement rules direct work can be given during urgency.
The ACC in its opinion did not feel such an urgency was at play.
OAG’s view on Dasho Dorji Choden
The OAG in its opinion had said that Dasho Dorji Choden’s request for approval from the Finance Minister for direct award of works does not amount to abuse of function.
Section 58 of the ACC Act says, ‘A public servant who knowingly abuses functions or position by performing an act amounting to favouritism, nepotism or patronage, etc. in violation of laws, in discharge of his or her functions to obtain advantage for himself or herself or for another person shall be guilty of an offence.’
The OAG says the former MoWHS Minister should have knowingly abused her function which is clearly absent. The OAG says the defendant rather acted in good faith with the sole intention of preventing the loss of Nu 22 mn per day to the state.
“If she had not acted as she did, as evident from the ultimatum issued by the contractor, the contractor would have dragged the state to the court and that would have led to a number of outcomes none of which would have been in favour of the state.”
The OAG says the defendant should have performed an act amounting to favouritism, nepotism or patronage etc. but by going by the facts of the case, this element also seems to be absent.
“Considering the complexity of the situation at the site, the defendant merely recommended or sought the approval of the Minister of Finance to directly award the work to the Empire Construction. By doing this she did not commit any act of favouritism, nepotism and patronage.”
The OAG says the action of the defendant should be in violation of the laws but this element is also clearly absent.
The defendant knowing that the Public Finance Act authorizes the Finance Minister to deviate from the financial rules in certain instances merely sought the approval of the then Finance Minister to directly award the work. In doing so the defendant violated no law because no section of any law in force outlawed the defendant from seeking approval from other ministries with whom the power to approve such decisions vested. After all, the final say as to whether to approve such decisions vested with the approving minister.
The OAG said the defendant should have acted to obtain advantage for herself or for another person. It says the fulfilment of this element is also doubtful as she did not act to obtain advantage for herself. Though the action seemed to have given advantage to the Empire Construction it’s not an advantage given by her per se. She has just sought the approval of the Finance Minister and she had her own valid justifications for seeking such approval.
“And one thing is very clear; while seeking the approval of the Finance Minister, she did not intend to unduly advantage the Empire Construction – she merely intended to prevent a highly probable time-consuming litigation and ensuing loss to the state by compensating the Empire Construction for the premature termination of the Yurmu project.”
The OAG said that as per its analysis the defendant and her acts do not satisfy all the elements of commission amounting to abuse of functions and therefore the charge against the defendant should be dropped. It says in any case the defendant’s action would be justified under section 89 of the Penal Code of Bhutan, which is an affirmative defence.
OAG’s view on Namgay Dorji
The OAG says that in the case of the former Finance Minister the requisite mens rea for the offence or knowingly is absent. The defendant, rather than acting with the intention to abuse his function, acted in good faith which is with the sole intention to prevent the loss of Nu 22 mn per day to the state.
OAG said if he had not approved the direct award of the work to Empire Construction, the contract at the Yurmu site would have been very difficult to terminate, leading to the state enduring a loss of Nu 22 mn per day or even more.
Even if they were able to terminate the contract without his approval, the MoWHS would not be in a position to compensate the Empire Construction, in which case, the time-intensive litigation and with that the said loss would have ultimately ensued.
OAG said he acted with the sole intention to avoid all these consequences and to bring to an end the risk posed by the contractor’s work to commuters and residents of the site. Hence the mens rea is absent.
It says the element of favouritism, though unintended and inadvertent seem to be present in some ways.
The element of it being in violation of the laws is absent according to OAG as his action of approving the direct contract is not in violation of the laws per se.
Though the work at Nobding- Dungdungnesa stretch did not meet any of the stipulations of Direct Award set by the PRRR 2012, the defendant as the Finance Minister had an authority under the Public Finance Act to deviate from such requirements of the Rules and Regulations in certain circumstances for a good reason. Thus, his action was not in violation of the laws.
OAG says the former minister also did not obtain any advantage and even though the contractor was advantaged it was unintended and not undue. At the same time the defendant had valid reasons for acting the way he did.
Here too, the OAG said since the defendant and his act did not satisfy all of the elements of commission amounting to abuse of functions, the charge against the defendant should be dropped.
It says in any case the defendant’s action would be justified under section 89 of the Penal Code of Bhutan, which is an affirmative defence of justification.
OAG’s view on Phuntsho Wangdi
The OAG says for the same reasons as that for Dasho Dorji Choden, the charge against Phuntsho Wangdi should be dropped. It says Phuntsho Wangdi and Dasho Dorji Choden’s act were committed in the same line of action.
It says he was acting under the command of his immediate boss which is the minister. In his statement, he allegedly reminded his boss of the ineligibility of the Nobding- Dungdungnesa stretch work for direct award. He did what is required and to be done and further objection to his boss’ instruction would have complicated the dynamics of the boss-subordinate relationship.
OAG view on Empire Construction
The OAG will be charging the contractor for an issue separate from that of the above two former ministers and the former secretary.
The contractor in his bid for the first work had submitted falsified documents misrepresenting the employment of technical and skilled manpower which the contractor neither possessed nor deployed when the work was being executed.
The ACC recommended that the company be charged for penal offence of deceptive practice and forgery which the OAG is charging.
The Chief Engineer of the regional office is also found to have manipulated the technical score to show Empire as the lowest evaluated bidder. The Chief Engineer is being charged too.
The OAG put the above case in its committee or corpus of lawyers for discussions and the above decisions were taken. The ball is now in the ACC court.
In a separate but not related development the two former ministers will be getting their audit clearance. They already got their Integrity Assessment Certificate from the ACC allowing them to be eligible to contest for the polls.
The case all started with the Audit Report on the ‘Northern East-West Highway project.’
The MHPA had requested Department of Roads (DoR) to carry out critical widening works as deposit works especially at the cliff of Dzongkhalum.
The Regional Office, Trongsa had awarded the contract to Empire Construction through open tender at a cost of N 39.40 mn for widening of approximately 2.5km Trongsa-Yurmu rocky stretch and other related construction activities.
During the visit of the Finance Minister Namgay Dorji on 28th September 2015, MHPA and JPCL reported along with other numerous complaints in the past that, there is huge risk to the lives of people and commuters and also to the JP colony due to uncontrolled blasting and widening.
They felt the contractor will not complete the Formation Cutting works in December 2015 and delay would cause a loss of Nu 22 mn a day for the project and so it was decided that the works will be handed over back to MHPA.
Since the contractor still had time left, the Secretary informed the contractor that they will be given the equivalent value of work elsewhere due to the fact that they have not failed the contract, but due to safety issues. The contractor would be paid for the work executed so far.
On the Regional Office’s instruction, the contractor had tried to do a type of half tunnelling excavation but they could not do it due to high risk and lack of requisite experience and resources. Due to above facts, the contractor had to resort to conventional cutting.
RAA’s main issue here is that the contractor was found compensated with a total payment of Nu. 40.98 mn for works executed against the contract cost of Nu. 39.40 mn despite the failure to complete 70% of the works.
Here Dorji Choden had said that RAA’s observation would be fair if half tunnelling could be done at a 10-meter height, but due to the instability of the slope the contractor had to cut 50 to 100 meters above and so even the 30 percent work exceeded the total contract value. She said that in fact the remaining works was tendered by MHPA for Nu 50 mn.
She had said that legally the contractor still had 10 months to complete the entire project and he assured he could finish the entire work by the end of it and the contractor was well within his legal rights to drag them to arbitration which would have delayed not only the road but also the entire MHPA project with a loss of Nu 22 mn a day.
She had said that to get around this and to get him to give up his Dzongkhalum work voluntarily without any legal battle and delays to the MHPA project, he was assured he would directly be given another work of a similar size without bidding.
The ministry then gave a 2.75 km road widening work at Nobding-Dungdungnesa directly based on the proposal submitted by the MoWHS Minister and cleared by the Ministry of Finance.
The work was given at the departmental estimate amounting to Nu. 39.39 mn.
The RAA objected to the direct award of work saying the department’s analyzed rates for the 2.75 km Nobding-Dungdungnesa was much higher than the rates quoted by winning contractors including Empire Construction itself for a nearby stretch.
Here Dorji Choden had said it is not fair comparison as the RAA is comparing a department estimate to quoted rates by contractors as contractors will always bid lower.
Both the former ministers had denied any family and personal links with the construction company.
There was additional controversy as the two former ministers said they were never informed about the audit memo against them and were not given a chance to thus reply and attempt to clear the memo.
They said that while meetings were held with RAA discussions were at the ministry, Department and Regional Office level and there was no talk of ministers being held directly accountable.
RAA said that RAA has nothing to do with the fixing of accountability as the accountability on the former ministers and former MoWHS secretary Phuntsho Wangdi were fixed by the Ministry of Works and Human Settlement before the report was issued in 29 May 2019.
On the issue of the two former ministers not being made aware a senior RAA official had said here again as per the Audit Rule section 195 it is the job of the head of the audited agency to intimate all concerned individuals who are held accountable immediately upon receipt of the audit report.
The RAA official said the report is normally issued to the head of the agency which in this case is the current MoWHS/MoIT Minister Dorji Tshering.
The former ministers said that if they had been made aware about the findings by RAA or the two ministries in 2019 then they could have replied with all the necessary documents and evidence and especially on the national interest part but they never got the chance.
While the RAA issued the report to the then MoWHS on 29 May 2019 it decided to forward the issue to the ACC a year later in June 2020.
The agency was still given a chance to respond and also file an action taken report within three months.
There was a dialogue and several meetings between MoWHS and RAA over the period of a year and in the end it was decided that 8 cases on the Northern East West Highway Project including the above case would be sent to the ACC.
The former ministers were never aware.