All that glitters is not gold. Community learns the hard way

Tashi Dema 

Lost and worried, members of the Pedmi Dejung Kuenphen Private Limited (PDPL), a company formed by people of four gewogs in Samdrupcholing drungkhag, are now  suspecting  there could be more reasons than just their inability to procure machineries on time that disqualified them from the contract to hire machineries to the State Mining Corporation Limited (SMCL) in Habrang and Tshophangma mining activities.

The company has 4,187 members from gewogs of Phuentshothang, Pemathang, Samrang and Martsala, who invested money to buy earth-moving machinery (EMEs).

However, today, they are not only deprived of the opportunity to hire machinery but lost about Nu 20 million (M) to a contractor they paid in advance. While the steering committee members are opting for a legal suit against the contractor, villagers who invested money in the contract after taking loans are worried.

The project started in November 2019 when some residents consulted local leaders and instituted a community company called Pedmi Dejung Kuenphen Private Limited (PDPL).

Members said that in January last year, SMCL’s Chief Executive Officer (CEO) assured them that he would award the work to them this year after the contractors involved in hiring EMEs complete their contract term.

By June last year, they received a letter of intent from SMCL asking them to prepare bylaws and make their community group a legal entity. By September, SMCL sent them a requisition of 25 excavators, four 10-wheeler dumpers, four payloaders and 69 six-wheeler dumpers.

“In November, SMCL asked us about the status and preparedness of the shares and we reported we might collect about Nu 189 million,” a member said. “But we could barely collect Nu 35 million through chiwog representatives and community volunteers.”

PDKPL’s steering committee members wrote to SMCL on December 31 last year, detailing their back-up plans such as deploying workable machines of the public and avail loans to purchase remaining machines to meet the conditions.

However, on January 14 this year, SMCL called tenders for the Tshophangma mining. The group and four gewog leaders immediately wrote to SMCL to cancel the tender.

When this did not happen, the group then appealed to the Prime Minister and availed a time extension of 45 days.

SMCL, however, changed the condition of the machine requirements by increasing the number of heavy machinery and vehicles in February this year, which impacted the community contract. “By changing the requirement, there was a difference of about Nu 60M and also the new condition mandated we deploy new machines,” a member said.

A community member said they requested only 45-day extension based on the requirement conditions set in September 2020.

In that 45 days extension period, community members set up offices, called quotations for EMEs supply and started banking works, but without experience and capacity, they could not fulfil the requirements.

Some members travelled to Thimphu to request agencies involved, including officials of Druk Holding and Investment (DHI).

PDKPL’s members said repeated lockdowns and permanent sealing of border gates affected them to raise funds, as export of cash crops like ginger, betel nut and rice were hampered. They said compulsory quarantine in order to travel from Samdrupjongkhar to other areas also hampered their work.

A member said there was a lot of communication gap between SMCL and the community. “We work on a voluntary basis and we do not have knowledge and expertise on such projects.”

Facebook post

Members alleged they were told by DHI officials, Samdrupjongkhar’s member of Parliament Jigme Wangchuk and SMCL officials that they would not get the work because they wrote against them through an anonymous post on Facebook.

The anonymous Facebook post alleged a contractor who is executing a hiring work of corruption and linked SCML’s chief executive officer, NC member Jigme Wangchuk and DHI officials. It claimed DHI officials were given locally produced Khamtey rice.

A member said they repeatedly told all officials that it is not fair to punish the whole community because of an anonymous post. “We told them they should track the writer and drag him to court instead of punishing 4,187 people.”

Who executes the work now? 

In Habrang, a local contractor executes the work. Members alleged he was given liberty to deploy machines within the range of five years old and were given repeated time extensions.

Allegations are rife that most of the machines deployed at the sites under a contractor belonged to NC deputy chairperson, Jigme Wangchuk, although the machine was registered in his brother’s name.

“A former DHI board member also owns machines,” a Samdrupcholing resident said. Most of the managers of financial institutions here own machines in their relative’s name.”

In Tshophangma, a contractor who was awarded the work also could not fulfil the obligations of SMCL’s. After repeated time extensions, the work was cancelled and SMCL is executing the work departmentally.

Residents in Samdrupcholing allege that the community contract does not receive support from authorities because their bylaw mandates only residents of the four gewogs to hire machinery and trucks.

“As the most affected community, we thought we should benefit from the mining activity, but we did not realise we are risking our opportunity,” a community member said.

SMCL’s stand

SMCL officials explained there is a difference while hiring from the community and through tenders, as the community is awarded the work directly with negotiated rates or existing rates.

“Since the benefits must be shared by all community members, they have to pool resources, procure and own machines,” an official said. “Otherwise, only machine owners in the community will benefit.”

He said in a community contract, they do not allow bank loans to finance the machines, as banks will benefit and not the community.

The official explained they cannot dictate the terms when hiring is done through open tenders as procurement norms will govern it.

SMCL officials refused to acknowledge the change in conditions although there is a letter from the company dated February 5 that changed the conditions for the community contract.

An official said about 50 trucks that they deployed in two mining areas are from local households, without any middlemen.

Way forward 

PDKPL members insist that DHI and SMCL should award machine and dumper hiring works to the community.

A member said that if DHI and SMCL are serious about uplifting the community of the mining site, communities should be allowed to deploy machines and vehicles that are functional and not new.

A prominent public figure in Samdrupjongkhar also agreed that SMCL’s new requirement issued in February this year limited the community’s capacity. “The conditions were made to ensure the community cannot fulfil it.”

A member of the National Assembly, who is familiar with mining issues, said NA was apprehensive about SMCL taking up all the mining works because they were mindful of issues like this.

The member said affected communities are not benefitting because of state monopoly. “SMCL and DHI should give them some flexibility for the benefit of being the local residents who were affected by mining activities. SMCL should encourage and support the community by helping in procuring machines instead of being too rigid.”

A corporate employee said if SMCL wanted to help the community, they could have supported them and built their capacity.

Meanwhile, it was learnt DHI had verbally instructed SMCL not to award any machine hiring works to communities henceforth.

“Because of PDKPL, all communities living in mining areas will be impacted,” the public figure from Samdrupjongkhar said.