PM says Transparency and Accountability a must in construction of hydro projects

In the early years of the previous government the Royal Audit Authority (RAA) had come out with a Performance Audit on the construction of the Tala project.

The RAA report while appreciating the construction of the project pointed out several lapses including avoidable costs, overpayments and lapses in the project.

When the then Opposition Leader Tshering Tobgay who is now the Prime Minister had tried to raise the issue in the Parliament further discussion was not allowed.

That lack of transparency and accountability has now come back to haunt the ongoing Punatsangchu 1 and Mangdechu projects where RAA has found similar lapses and in some cases history repeating itself. This has been highlighted to some extent in a RAA report on Mangdechu and also a RAA performance report that includes issues over Consultancy Services in the Hydro projects. According to sources there are some major issues being looked at in the ongoing RAA Audit of the P I project.

There are also questions being raised on the site relocation of the P I project not only in terms of the huge cost and time escalation due to the deeper than expected dam site, but also more cost overruns and time delays due to an unstable and sinking slope not previously accounted for.

The Prime Minister said, “As the Opposition we did try and raise a discussion on the Tala report but we were told that everything was in order. The RAA reports indicate otherwise and their reports must be taken seriously.”

The PM said, “Ultimately these are assets of the people and the nation and how people use the money to construct these projects must be transparent and people involved must be held accountable.”

A government official on the condition of anonymity said, “If the previous government had taken the RAA report on Tala seriously and implemented its recommendations in the projects that came after that Tala then many of the issues coming up now could have been minimized or avoided. These issues are now costing the country billions in additional construction costs.”

The Prime Minister said, “I don’t doubt RAA’s capability and ability but that said anybody looking and analyzing these huge projects would want to be very careful.”

The PM said, “We are concerned about the spiraling costs and cost going way above the DPR. The RAA on their part have the mandate and legal instruments and they can hold people accountable.”

In the audit of the Mangdechu Hydroelectric Project Authority (MHPA) there was a case where the construction works included in the Detailed Project Report prepared by the consultant were later changed by the project management. The consultant insisted on maintaining the same works as it was cheaper than the alternative works which the management opted. This entailed a possible extra financial implication of Nu. 779.89 8 million in a road that could have been avoided according to RAA.

The RAA, in its performance report on procurement of consultancy services by the government has pointed out some deficiencies and shortfalls in consultancy services for Hydro projects, which are impacting the construction of Hydro projects.

The report says that were several deficiencies in the design and preparation of estimates mostly attributable to inadequate time and resources in preliminary studies such as geo-tech, topographical studies etc. This, it says, had resulted in huge deviation in actual and estimated quantities necessitating payments at analyzed rate which are usually much higher than the quoted rates.

The report also talked about major changes in the scope of work had ensued from unrealistic estimates prepared by the consultant, time and cost overruns, no accountability mechanism and penal provisions to hold the consultants responsible for the flawed and deficient DPRs and excess payments.

The report also says that while the adverse geological conditions contribute largely towards inadequacies in the DPR and resultant subsequent changes, BOQs prepared by the consultant, time and cost overruns, no accountability mechanism and penal provisions to hold the consultants responsible for the flawed and deficient DPRs and excess payments.

The report also says that while the adverse geological conditions contribute largely towards inadequacies in the DPR and resultant subsequent changes, BOQs prepared do not seem to reflect these realities and provide for in their estimates.

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