RAA uncovers massive violations in leasing of hundreds of acres of government land-Part 1

A Royal Audit Authority report titled, “Leasing of government land, Government Reserved Forest land and Mines’ found several irregularities, violations and flaws in the leasing of hundreds of acres of government land to communities, government corporations, institutions, private companies and private individuals.

The report done from 14th September 2012 to January 2103 says that in the absence of proper records on land leased prior to the 2007 Land Act the records as of December 2012 showed that 13,994 acres of land were leased in the country. Land had been leased out for educational, commercial, residential, mining and agricultural activities.

The report found that there are various inadequacies and inconsistencies in policy, legal and institutional frameworks on leasing of land. This resulted in different and contradictory procedures and practices in leasing of land across different government agencies.

The RAA found that supervising, monitoring, and enforcement actions were severely lacking which allowed the abuses of leased land and non compliance including unauthorized uses of leased land, sub-letting and speculative holding for future benefits.

The RAA found 38 cases where government land measuring 50.10 acres were used by corporations, individuals and companies without any authorization. These lands were neither leased out nor their occupation approved by the government.

There were 37 cases of lease where land measuring 30.93 acres was encroached upon which should have constituted an offence warranting termination of the lease but no action was taken. There was also no proper demarcation of the leased lands leading to possibly more encroachment.

The RAA also found 19 cases of illegal subletting where leased land was illegally sub let out to construct canteen and residences with rents ranging from Nu 2,000 and Nu 38,650.

In violation of rules 20.51 acres of land in 20 cases were being used for other then the specified purposes.

Government agencies did not have a complete and accurate inventory of government and GRF leased land and land being occupied and used without any lease.

The RAA found anomalies in fixing lease rents across the country due to a lack of rational approach leading to public complaints. Even within the same municipal boundaries there were different lease rates for the same types of businesses.

The RAA pointed out that charging differing rates for ‘commercial’ and ‘industrial’ lands within municipal areas is not a reasonable basis for fixing lease rates. The report says that if the government had charged the more expensive commercial rates on industries located in Thimphu, Phuentsholing and Samdrup Jongkhar the government would get additional revenue of Nu 200 mn. It also said that having industrial areas in municipal boundaries was not suitable.

The RAA report found that lease rates in bigger Thromdes like Thimphu were lower than those in smaller Thromdes like Phuentsholing, Gelephu and Samdrup Jongkhar. For example commercial lease rates for the smaller Thromdes were Nu 42 per sq.feet while it was just Nu 20 per sq.feet in Thimphu.

Lack of Transparency in allocation of land and inadequate public awareness especially in rural areas on land leasing impeded fair and rational allocation of government land among prospective and interested citizens.

A lot of leased land was only partially used or not developed at all but the lease was transferred many times.

In 18 cases lease land measuring 42.01 acres were found unused for a period exceeding two years. As per the rules the leases should have been cancelled but no action was taken.

Permanent structures were found constructed on both short term leased land and long term leased land violating existing laws in the latter case and leading to potential legal and compensation issues in the latter case.

The Land Act required local governments to come with their own rules on leasing of government land which did not happen. In the absence of both a broad policy and specific rules the inconsistencies lead to many Thromdes not being certain about leasing procedures and rents. This resulted in a short collection of Nu 58.67 mn in lease rent.

The RAA found that in the absence of a ceiling on land lease excessive land or varying sizes of land were given for various activities.

For example for an activity like Mineral water production the leased land ranged from one acre to 10 acres, for mobile towers it ranged from 10 decimals to 2.19 aces, for automobile workshops 12 decimals to 1.50 acres and for stone crushers from 85 decimals to 26.80 acres.

In many places hutments and even townships were constructed in government land without approval or lease which creates legal problems in the future.

The RAA also found a lot of irregularities in the lease of Tsamdro or pastureland in violation of the Land Act 2007. Tsamdro measuring 337.06 acres were already leased in three Dzongkhags to 28 thram holders which was not consistent with the Land Act 2007 as leasing of Tsamdro can commence only from 2017.

As per the Land Act all Tsamdro should have reverted to the government or converted as leaseholds. However, it was found that 1.335 mn acres of Tsamdro belonging to 4,582 thram holders were yet to be returned to the government and compensation for the Tsamdro had not been finalized and paid as yet.

The RAA also said that the possibility of people occupying government land without even the knowledge of the government could not be ruled out.

The RAA also found several cases of lapses in land lease by various other mainly government institutions.

It was that the Department of Roads had constructed many dwelling for its workers along national highways but in many cases the land was not leased. 380 dwelling units were neither registered in the name of DoR nor acquired on lease. This allowed unauthorized construction on such land.

The RAA found that 144.93 acres of land leased out as Mobile and power towers were not leased resulting in loss of revenue for the government.

The RAA found that the 12 townships of Pemagatshel town, Bangtaar town, Lhuentse town, Autsho, Sibsoo, Zhemgang, Dagana, Bumthang, Sarpang, Khaling, Tsimasham and Dagapela towns were established in government land for years where there were no records of government approval authorizing establishment of such towns or giving the land on lease. The RAA also found houses and hutments built on government land.

The issue of controversy over leased land first came up in a major way with the Trowa case during the period of the previous government. The latest instance is the 1000 acre Education City which was declared as illegal by the National Land Commission but was not covered in the RAA report.


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