RAA points out Nu 122.08 mn in irregularities in Education City Project

The Royal Audit Authority (RAA) in its Annual Audit Report for 2014 has pointed out Nu 122.08 mn worth of irregularities pertaining to the Education City project.

Of the total, Nu 110.74 mn are observed directly against the Bhutan Education City Secretariat.

The RAA report says in a case of mismanagement the Bhutan Education City Secretariat (BECS) and DHI-Infra made huge investment of Nu 110.18 mn for construction of various ancillary facilities for the Bhutan Education City project. It says the project was terminated because the land identified and acquired for the project violated the Land Act.

It says BECS has furniture and equipment worth Nu 0.102 mn lying idle and Nu 0.035 mn in unjustified payment for procurement of software which was not found utilized.

There was also violation of laws and rules as BECS had made payments of Nu 0.526 mn on account of overhead cost in addition to Nu 99.47 mn for 10 percent deposit work fee to DHI-Infra. There were no approvals for payment of overhead costs and it was not covered in the contract agreement.

BECS has not yet surrendered unutilized funds of Nu 258.87 mn including earnings from fixed deposits to the department of public accounts. The Ministry of Finance has asked the BECS to retain the funds till all pending liabilities are settled.

The RAA report says that DHI-Infra failed to recover the cost differences from the withdrawing bidder amounting to Nu 11.34 mn during the construction of the access road to Bhutan Education City.

It also says that DHI-Infra failed to forfeit the Earnest Money Deposit from the withdrawing bidder amounting to Nu 1 mn during the construction of the bridge to Education City.

The Cabinet, in a meeting held on February 17, 2014 decided to close down the Education City project based on the several legal issues and objections raised by the National Land Commission over the proposed allotment of 1,000 acres of land to the project. The NLC said provisions of the Land Act would be violated in giving such land.

The project from the beginning was dogged with controversies over conflict of interest issues, generous concessions, viability, true nature of the project, quality, location etc.

The detailed project report of the Education City talked of the developers planning to build 699 luxury villas of 50 decimals to an acre each to be sold to rich tourists and foreigners. This hardly left any land for the actual Education City. The PM earlier questioned this asking for whom exactly where the luxury villas being developed in a supposed Education City project.

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