The business of giving advice

The Royal Audit Authority Report on the procurement of consultancy services by the government from 2007-2008 to 2011-2012 raises several issues, challenges, and questions on the procurement of such services and their effectiveness.

Consultancy, unlike procurement of other things like cars or tables, is very significant because the advice or report that comes from a consultant influences how programs and projects are implemented on the field, or how changes are made in the system.

When the USD 9.1 mn McKinsey project was announced, there was criticism from the domestic consultancy industry who felt the jobs could have been done by them. There was also criticism from civil servants who did not see the point of hiring people who had little or no idea about the local situation in Bhutan, and in fact, had to be taught everything from scratch by grumbling civil servants themselves.

The fact that McKinsey sent very young and barely out of college professionals to work on some monumental tasks showed the level of commitment from the consultancy company. The government, at the time, refused to listen to its own people and was in effect, star struck by McKinsey.

The result, as the RAA Report points out, is far from satisfactory for the huge amount of money spent.

The fact that McKinsey promised, but failed to make Bhutan one of the top 50 nations in the ease of doing business index, and instead Bhutan further declined down to 14 8th position in 2013- says it all.

There was also a lot of in-transparency around the project,

and the then government actually gave the impression that McKinsey was a success- in absence of adequate information. The RAA Report shows quite something else.

The McKinsey lesson for the government is to first make sure that consultancy is actually required because there actually maybe a lot of in- house capacity that can be used.

The government or agency must also know what it wants clearly-and also be able to evaluate the end product presented as being usable or more theoretical solutions that can’t solve problems.

A visit to any government agency’s office will show rows and rows of consultant’s reports where millions would have been spent. However, in most cases these reports lie on the shelves collecting dust-not only showing the worth and relevance of these documents, but also the reality of the implementing mechanism.

McKinsey is also that deep Asian complex of placing superiority on foreigners or foreign companies-irrespective of their quality of work.

Bhutan has to be sure of our own capacity, capability, strengths and weaknesses before entrusting everything to consultants and hoping for a fix. If we don’t know or can’t bother to find our own problems and solutions- then no amount of foreign consultancy will solve it.

However, it is not fair to only pull up McKinsey as the RAA Report also raises some broad questions on the nature and quality of Detailed Project Reports done by hydropower consultants.

The inaccuracy and less than desirable quality of these reports have lead to unexpected and huge

cost implications and escalations in the projects, imposing a burden on both governments. It is clear that many recommendations made by the RAA following its performance audit of Tala have not been followed with the same mistakes being repeated in the projects under construction. It is high time that Bhutan develop technical expertise to evaluate the quality of not only the consultancy reports, but also build up its capacity to do these reports on its own.

Currently, the economic future of Bhutan and also India’s billions in grants and loans are at the mercy of some engineers and technicians who have already shown that they are not perfect and they do make mistakes. More levels of checks and balances will only lead to fewer mistakes.

However, the RAA reports raise the maximum questions on the domestic consultancy services and also the government agencies procuring them. There are clear issues with avoidable costs, quality issues, and also better management of consultancy services.

Several poor quality infrastructures and less than satisfactory services can be traced back to such consultancy reports. The consultancy industry in Bhutan, far from being a group of eminent experts that can provide the best solutions, are degenerating into businesses that are more interested in making money at the government’s expense then delivering quality work.

The government of the day should take note of the RAA’s findings and carry out the necessary rectification measures.

A consultant is someone who saves his client almost enough to pay his fee.
Arnold H. Glasow