RAA uncovers massive overpayments and illegalities in construction of Domestic Airports by MoIC – Part 1

Untitled-1A Draft Royal Audit Authority report has unearthed Nu 152.876 in illegal overpayments and more than Nu 83 mn in avoidable costs out of the total Nu 427 mn spent on the three domestic airports.

The RAA also uncovered tenders being given to ineligible companies, fake bills, sub-standard works, conflict of interest, missing documents, unjustified time extensions, poor planning and etc.

The RAA also found a mismatch in the runway designs required for the aircrafts operating there and also violation of several environmental rules.

According to sources the RAA, as a result of the report, has refused to give Audit Clearance to almost all the 250 staff members of the Department of Civil Aviation.

The Draft RAA report covers a period of three years from January 2010 to 30th June 2012 when the Domestic Airports were constructed by the Department of Civil Aviation under Ministry of Information and Communication. The tenders and overall monitoring was done by the MoIC.

Of the allocated Nu 435 mn for the three airports the RAA covered works worth Nu 427 mn.


Gelephu Airport

The largest illegal overpayments and wasteful expenditure has been found in the Gelephu Domestic Airport. The illegal overpayment here is around Nu 140 mn with avoidable wasteful expenditure of Nu 67 mn.


Illegal Overpayments

The RAA found four instances of overpayments made to the contractor Tashi Kunzom Construction.

In the biggest of them Nu 78.27 mn was overpaid due to inflation of the quantities of the work done. The work was for providing and laying out ‘Dense Bituminous Macadam’ (DBM) and ‘Asphalt Concrete’ (AC) on the airport surface.

The report says that the actual quantity of work for the airport was 45,000 m2 for DBM and 15000 m2 for AC.

It says that in the estimates and the Bill of Quantities or BOQ (list of construction items and their costs) the work quantity was inflated to 72,000 m2 for DBM and 24,000 m2 for AC.

The report says that in the final bill put up by the Construction Company these figures were further inflated with double counting of the quantity of works resulting in overpayment of Nu 78.277 mn.

The report says that the Ministry and the DCA should thoroughly investigate the process leading to such huge payments, fix responsibility on the officials responsible for the preparation of estimates, take legal action and recover the Nu 78.27 mn in excess payments.

The report also says, “Considering the magnitude and seriousness of this observation as well as many other audit findings of serious nature, the Ministry and DCA should also thoroughly investigate the final bills of all the contractors to rule out any possibility of irregular and inflated claims.”

The RAA also found excess payment of Nu 24.94 mn for earthwork excavation and transportation of soil and rocks in the construction of the airport.

The excess payment was found in a resurvey done by a joint team of two officers from Royal Audit Authority, one from Ministry of  Works and Human Settlement and one from the National Land Commission.

The Report said, “As the entire amount pertaining to the earthwork excavation had already been paid to the contractor through first running bill, the ministry should immediately take steps to recover excess payment of Nu 24.94 mn and deposit into ARA.”

The RAA also found Nu 23.67 mn in unjustified payment on transportation of spoil material. Though soil transported only beyond 500 meters and 1,000 meters was to be paid for, the contractor was paid for all soil refilling resulting in the excess payment.


The Report says, “The Ministry should thoroughly investigate the work methodology adopted by the site engineer as all the excavated materials were accepted as transported and paid for despite there were refilling works within the vicinity.”

The RAA also found Nu 12 mn in excess payment for blacktopping of the runway pavement using DBM and AC. A resurvey by a joint team of RAA, Engineers from Bhutan Standards Bureau and DCA found that the average thickness of the pavement was only 137.24 mm against the required thickness of 150mm.

The report said, “It indicated not only execution of substandard works by the contractor but also taking over of works not as per technical specification by the Department in particular the site engineer.”


A Nu 64.54 mn loss

The RAA report points out that failure of the Ministerial Level Tender Committee and in particular the Evaluation Committee which failed to evaluate the tenders with due diligence resulting in a loss of Nu 64.54 mn.

This was after the RAA found that the BOQ rate of the contractor Tashi Kunzom Construction was much higher than the BSR 2009 rates which guides the construction industry.

The report also said that the inclusion of wrong specifications in the BOQ resulted in quoting of wrong rates by bidders which impacted the cost of the project.

The report says, “The Department and Ministry should investigate the failure on part of the Tender Committee.”


A flood prone Airport

As per Gelephu Airport master plan, the consultants, following a thorough study on flooding risks of the airports recommended that the runway elevation should be at least 322 meters at its lowest point. However, as evidenced from the field visit report of joint team of MoWHS, Gelephu Thromde and DCA conducted from 13th October 2012 to 19th October 2012, the lowest finished level of centerline was only 266.524 meters above sea level. The RAA report says that this could be one of the plausible reasons as why the Gelephu airport was threatened with flooding during the construction phase in last monsoon.


A Nu 34.27 mn fence that got washed away

The RAA found that despite a Nu 34.27 mn fencing the Gelephu Airport still remains unsafe as the fencing has been damaged and washed by the river and season stream. The fencing was also not constructed along the national highway at all due to insufficient budget.


Missing Apron and Taxi way

The RAA found that Gelephu Airport has a missing Apron and Taxiway due to improper planning of the project.

An Apron is to accommodate aircraft for purpose of loading or unloading passengers, mail or cargo, fuelling, parking or maintenance. Taxi way is a path on land aerodrome established for the taxing of aircraft intended to provide link between one part of the aerodrome and another.

The Master plan though had originally provided for an Apron and Taxi way. The RAA report said that such infrastructures are necessary for the operationalization of the airport.


 Ignoring the consultant’s advice and paying for it

RAA in its survey found that around 500 meters of the original site of the airport had been excavated before it was relocated on the grounds that excavation would cost Nu 1 bn.

The RAA, however, pointed out that the consultants who had been paid Nu 5.6 mn had already pointed this out and not following their advice made the expenditure worthless.

The relocation of the airport had also increased the distance between the building runway and the airport terminal from 246 meters to 374 meters.


Conflict of Interest

The RAA has said that conflict of interest cannot be ruled out when the contractor was asked to do the Topographical survey which should have done by the Department and later execute works based on it.

The topographical survey is a fundamental exercise for not only facilitating preparation of designs, drawings, estimates, BOQs but also forecasting realistic amount of earthwork excavation.

“There was no monitoring and overseeing mechanism put in place to validate the correctness of the topographic survey report,” says the Report.

The report said that there was possible existence of manipulation in the specification of item of work in the Topographic survey.

“Further, non quantification of earthworks even after the conduct of topographic survey has lead to a huge deviation in the quantity of earthwork excavation between the estimated quantity of 28,635.00 m3 and actual executed and paid quantity of 581,885.040m3 representing +1932% deviations from the estimates,” says the Report.

The RAA said that inclusion of topographic survey as an item work to be executed by the contractor was inappropriate and questionable.

The contractor charged around Nu 5.1 mn for the survey.


No documents rejection of tenders

The DCA despite repeated requests failed to provide bid evaluation results to the RAA. The information provided by DCA could not be verified as the re-tendered documents of the three contractors were not made available on record except the Standard Bidding Document (SBD) of M/s Tashi Kunzom Construction. The decisions of either the MLTC or DCA on the rejection of the initial tenders and retendering related documents were not made available for review.

“In the absence of which the process adopted for retendering, evaluations, rejections of bid and negotiation and award thereon could not be validated in terms of transparency, and fairness in the award of the contract to the 2nd lowest evaluated bidder M/s Tashi Kunzom Construction,” said the report.


Poor preparation

The RAA noted that the estimates for the contract package especially for the earthwork excavation and construction of runway were not prepared as per the required construction norms. The DCA had not conducted any preliminary studies such as hydrological, geotechnical and geodetic data as these are the basic and critical information for execution of such vital construction work.

The technical sanction as required was not made available and in the absence thereof the technical soundness of the project with appropriate infrastructure could not be confirmed. The RAA said that the Department and the Ministry should explain on how the project was implemented without ensuring the technical feasibility and soundness of the project.


Time and Equipment

The RAA report also criticizes the ministerial tender committee for giving time extensions of three months that adversely impacted the government in the timely operationalization of the airport.

The RAA also said that the committed equipment and vehicles on the list of machineries provided by the contractor were not deployed. Though this was a fundamental breach of contract no action was taken.



RAA findings on Domestic Airports
Nu 435 mn was total cost of 3 domestic airports
Nu 152.876 mn lost in Illegal Overpayments
Nu 83 mn lost in wasteful expenditure
Ineligible bidders awarded tenders
Fake Bills and missing documents
Missing Infrastructure
Substandard works
Airports not meeting technical specifications

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    This is achievement of dpt. druk air ceo is a corrupt, he should be checked for bribery

  2. Where r u? Here? There?who is Lamsang’s moderator? Y is his negative nt published? Is this democracy?

  3. U kno y u r paid less u do less N spent less. Now its time to use ur kidney as ur brain does nt work.

  4. OMG…..will be interested to read the 2nd and even more stories….what is going on in the country……who is accountable?  Thanks  to the Bhutanese for this news…it is vital to update the society of the corrupt people involved and must be punished!

  5. very disturbing

  6. Sad, our country is falling in the hand of corrupted people, As per information I got BEC is lowest bidder and they should give project to them as they are really good in DBM and AC works, Dhadgari to Chisopani blacktop is better than airport one, Road was done by BEC. This is just my observation.. 

  7. is it Phala of DCA again. . He has been known to be corrupt, when  MD of Bhutan Post was selected, he as officiating Joint Secretary of MOIC acted on his own.
    he should have been kicked out  when he was in Trade and Industry in Phuntsoling many years back. being married to the niece of Prime minister has helped him

    • Get your facts and figures right before you start pointing fingers at others. Dasho Phala is no more the director!!


        Dasho phala? U seems to be his chamcha newphew. Like corrupt uncle like corrupt newphew, welcome to gnh.

  8. If we do not work, we do not commit mistakes. If you work there is bound to be some loopholes. For example Lyonpo Minjur gave land to two Dratsangs in good faith as they were civil societies and the land will do good for the general people of Bhutan and not individuals. The intention was very noble but now he is beng charged for crime. If the airport work was not awarded, the airport would not be functional now.

    • you and your whole view of issues, seems like u r core supporter of corruption. I pity my country that such countrymen like u also exists and do not see in broad way. Simple mistakes are inevitable but major deliberate corruptions, may be u should be the PM of the country and forgive all corrupted ppl and make the nation, a land of gross national corruption!!


      If u make mistakes why did he  become Lyopo. If u want orange scarf, patang, prado, post, foreign trips, dine n wine at taj, business class in druk n international plane u dont make mistakes, if u makes mistake u take punishment. Whether the land is awarded to dratshang or not is not the issue here, the fact that he violated royal kasho is the crime, he is not king. 

      No airport is better than half done or wrongly done, its just waste of time, resources, etc. if accidents happen will u take responsibility. Will minister or pm or dpt take responsibility. Everyone will run. Like the recent bridge collapse. Question is here about corruption.

  9. What abt DHI? Does it have role to play here?

  10. All the top guys need to be changed….if people are in the same posts for long then we are allowing corruption.Regular check and balances is needed.

  11. Am surprised that RAA has taken out a detail report and got it published.Why did nt they do that with the Lottery Report.They refused to hand a Audit report to OL and ACC.
    RAA must be transparent and not be picky about the diffirent cases.Why are they not following up with ACC for closure of Bhutan Lottery.Such huge revenues lost by the government.Whose resposible?People must be held accountable and not protect the corrupt.


      Raa catch only small fishes, they r scared of big fish, morever they are vegetarian? 

  12. Samlak, I neither support corruption nor am supporter of Lyonpos- I as Bhutanese have the right to express my views. Your views can also be gazed from different angles and i can say it is very absurd.

  13. How come my post is not published.  I only raised some genuine issues.  For example How can this paper have  direct assess to to draft audit report.  It is illegal on part of the concerned reporter as well as the concerned audit official.  There is so called audit exit meeting where lots of things get clarified and memo’s gets dropped.  I hope this time you publish my post otherwise I will never have any faith in this paper. 

  14. This papers favorite pass time is investigating illegal land issues etc, I can’t understand how they did not get a story on the 4 acres of land taken over by the Speaker and sold or given to Yab Ugen. It happened around the same time as the Gyelpozhing case, Just tells you how fair in their reporting this paper is.

  15. I even don’t understand why in the first place only the need of having an airport in Gelephu, when we don’t have a good network of roads and transportation system, and when we already know its limited scope in a place like Gelephu. The money spent on this airport could have been well spent, in good faith and realizing the need to fix the basic necessities first, on double lanning the national highways and construction of new roads. This would have brought much benefits to the common man in terms of comfort, less travel time, less road accidents, and improving and increasing access of more people to better transportation. Honestly speaking, this Gelephu airport may benefit less than even one percent of our population although the amount used for it is a huge proportion of the country’s resources.

  16. All our tax money gone down the drains because of few people. We cannot tolerate this because the money used for the building the domestic air ports must be either our hard earned tax money or loan money which we have to pay back with interest. ACC should come in to punish the culprits. RAA has no teeth to bite and Dasho Ugyen Tshewang can only fix small fishes unlike Dasho Neten, So ACC roll up ur sleaves to investigate yet another big scam.
    In continuation I would also like to know from the ACC on what is happening to the Land scam of Thimphu Thromde and the high level land committee’s decision . People 0f Bhutan needs to be informed on the status of our scarce land resources . The allegations made against some of the Mi ser Gothrips Viz: former Gup Naku, Gup Kanjur and land Tshogpas for the New Sathram Compilation (NSC) in 2000-2002 merits an immediate investigation. Cheers and keep up the Good job Dasho Neten because u are bestowed with great Honour by our beloved Monarchs.

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