Lack of professionalism, inadequate technical, managerial, and financial capacity of local contractors and consultants, unemployment, and poor enabling environment has necessitated an overarching policy to guide development of the construction sector.
With these deterrents impeding the growth of the construction sector today, the works and human settlement ministry (MoWHS) has drafted a National Construction Industry Policy.
The main objective of the policy is to develop the construction industry as a key employment generation sector, to professionalise the industry, improve quality of construction in both government and private constructions and to improve coordination and collaboration within the public and private sector.
Once through, the policy is to provide the highest level of strategic direction to guide the development of the construction industry and create an enabling environment to alleviate the constraints affecting the growth of construction sector.
According to the first revised draft policy the MoWHS and labour ministry would spearhead need-based assessment for human resource development in construction industry and formulate a five-year human resource master plan.
The policy also states that the ministries should review curriculum of technical and vocational education centres to address the mismatch of skills and government should allow award of small constructions up to Nu 1.5 million to construction firms that would employ only Bhutanese workers.
“The government shall direct all procuring agencies to award works to any contractor employing 100 percent Bhutanese workforce, on preferential basis for larger works,” the policy states. “Small class contractors shall also be mandated to employ TVET graduates.”
The policy also states that the government shall balance local and foreign employment and recruitment of foreign workers shall be allowed only in those occupations where Bhutanese with appropriate skills are not available.
According to the policy, although, equal numbers of jobs have been created in the construction industry, foreign workers take up a majority of these jobs. In 2015, the industry recruited about 44,535 foreign workers against 6,241 Bhutanese workers.
The four TVET institutes produce about 690 graduates annually but huge deficit in supply of skilled national work force remains. Annually, the RMA remits Nu 7 billion in Indian Currency as payments for the foreign workers and Ngultrum 5.76 billion for the construction materials.
The policy states that to professionalise the construction industry, the MoWHS along with other ministries, shall develop standard operating procedures and the government shall institute a Council of Engineers and Architect.
“For major public works, prime contractor shall lawfully subcontract specialised works/trades such as plumbing and electrification, to and their agreement shall form part of bidding documents,” the policy states. “The government shall provide incentives to construction and consulting firms who invest in human resource development and completion of work before time.”
To enhance construction productivity, the policy states that the procuring agencies shall restrict the changes in designs during the implementation stage because there are instances where designs are changed during the actual construction after some senior government officers visit the construction sites.
According to the policy, the contribution from construction sector to the Gross Domestic Product (GDP) was 16.28 percent, about Nu 24,204 million in 2016.
The total capital expenditure outlay for the government for the Financial Year 2017-2018 was Nu 29.346 billion and the construction sector had a huge share of 63 percent, which is about Nu 18.462 billion.
As of May 8 this year, CDB had registered 4,023 contractors, of which, 219 are large, 398 are medium and 3,386 are small contractors.
The Anti-Corruption Commission has registered more than 500 complaints in the construction sector between 2006 and 2016.
Yangchen C Rinzin