About 81.39 percent of the construction works that constitutes about 585 construction works were declared as a cost overrun in 2016-2017 financial year, a study conducted by the Construction Development Board (CDB) found.
This means the cost for these projects escalated from the initial costs.
CDB director, Phub Rinzin, said that these figures were derived from E2, an evaluation system used by the procurement (employers) agencies. “Cost overrun and time overrun are the biggest challenges.”
CDB also found that 64.53 percent of the construction works that constitutes about 464 constructions for the same 2016-2017 financial year was declared as time overrun, meaning the projects did not complete on the specified tender time.
The director said that contractors provide all required formalities during the bidding process but not in the field. “There is no one check.”
He said that although CDB takes necessary actions by suspending, cancelling, and downgrading the licenses under the purview of registration, not much was done to monitor in the field. “CDB will now get strict.”
Phub Rinzin said the board would now be strict in monitoring the construction sites and penalise the defaulting contractors.
He also said that CDB will also print the annual performance report of the contractors to reflect the performances of construction companies in the country.
CDB’s programme officer, Leki Dorji, also said that while necessary actions would be taken to penalise the defaulter contractors, CDB will also intimate employers if there is non-compliance. “Monitoring reports would also be shared with Royal Audit Authority and Anti-Corruption Commission.”
CDB officials, however, said that without strict and systematic monitoring in construction sites of ministries, dzongkhags, thromdes, and other procuring agencies, the problem would not be addressed.
There are 4,009 contractors in the country today of which 3,401 are small, 394 are medium, and 214 are large contractors. Construction sector contributes about 16.86 percent of the country’s gross domestic product (GDP).
In the last financial year, CDB suspended 23 construction firms and 16 firms were downgraded for failing to meet the registration requirement.
These were the highlights of the eight-day refresher course held at College of Science and Technology (CST) in Phuentsholing.
A contractor, who participated in the refresher course, Passang Dorji, said that although there is support from the government to the sector, quoting a low rate for construction projects is the main problem. “Some quote more than 50 percent lower than the estimated rate,” he said. “It is difficult to understand why people do it.”
Another contractor, Kencho Dorji, said contractors get desperate and end up quoting low.
About 110 small contractors and 77 large and medium contractors participated in the eight-day refresher course. The refresher course certificate is one of the requirements for the license renewal.
Rajesh Rai | Phuentsholing