The economic affairs ministry’s initiative to streamline distribution of hardware and construction materials is a welcome move when the cost of construction materials are skyrocketing and quality of goods are compromised to maximise profit.
From next month, wholesalers will distribute three hardware products – electrical wires, cables and pipes, indispensable in the construction sector, in three dzongkhags. Three is a lucky number in the Bhutanese context. How lucky it is for the government, the private sector and consumers, will depend on how successful the initiative becomes.
What is confirmed is that there has to be intervention in the distribution system of goods, even services. With wholesalers distributing hardware and construction materials, the logic is to keep price competitive while improving the quality of materials procured. This decision should iron out a lot of creases in the construction industry. In the private sector, the builder or the jinda will ensure quality. The problem is with government projects tendered out. To cut cost, spurious materials at cheaper rates flood the market and line the walls, floors and ceiling of most constructions.
Sourcing from wholesalers should bring down price and improve quality. At the regular construction expos, before the Covid pandemic disrupted it, we saw quality goods on display. Unfortunately, most items displayed are not available or not worth maximising profit.
The suppliers, or the shrewd Indian businessmen across the Phuentsholing gate knows our weakness. Some say, with pride, that nearly every product in the Bhutanese market is fake. This compromises the quality even before the construction begins. Bhutan’s building rules prescribe quality material for Bhutanese constructions. It is only in the books gathering dust on shelves. A supplier in Siliguri can give us the details of the quality because that’s what the Bhutanese contractors want and what they supply.
If construction materials are sourced from manufacturers in India or abroad, if the quality is ensured and price made reasonable, it will only benefit us. Wholesalers are not licensed as of now. It is an opportunity for the ministry and the government to plug the loopholes.
The initiative should not benefit only the wholesalers. It should trickle down to the end users. The government or the ministry might claim success in the wholesale business of fast moving consumer goods, but it is not what is happening on the ground. Some wholesalers after availing millions of ngultrums in concessionary loans are competing with retailers. This is a good lesson for the ministry to improve distribution or controlling price.
Coming up with an initiative or rule is one thing, implementing it and monitoring it is all together a different story. The decision of the ministry could be felt by a low-income government or private employee. Cost of construction dictates housing rent today. The pandemic has increased the cost of construction. Builders will pass it on to end users. There is not a decent flat available below Nu 10,000 in the capital city.
A contractor put this in the right perspective. A three-bedroom apartment built in 2021, he said, would cost about 20,000, up by 5,000 before the pandemic, because of the cost escalation. The owner would pass it down to earn enough to pay his loan. The end result, without interventions, will be shortage of houses in a market with many empty flats and rising non-performing loan cases.