NRDCL claims the present modality has challenges and negative impacts

Timber: The recent NRDCL circular which brought 50 sawmill owners to Thimphu to meet with the Prime Minister, was a process to change the policy on current timber marketing and distribution, according to the corporation’s CEO Karma Dukpa.

This, he said, was done under the directives and guidance of the Druk Holdings and Investment (DHI) and the company initiated a process of changing the policy on current timber marketing and distribution since 2014.

He said that the first high-level meeting was held on October 23 last year between the DHI and agriculture ministry.  “On December 22 this year, officials from DHI and the ministry met again and NRDCL submitted the new modality for final approval and to start implementation from January 1 next year.”

Karma Dukpa said NRDCL had to intervene, as the present timber distribution and pricing policy has challenges and adverse impacts.

He said the present system gives a monopoly to the sawmill owners, as the policy of routing timber only through saw millers has created a monopoly, affecting the consumers.

He also said that while NRDCL sells logs to saw millers at the Natural Resources Pricing Committee approved rates, saw millers are alleged of selling sawn timber at much higher rates than the approved NRPC rates. “There were allegations that saw millers take advantage of the weak enforcement system and engage in malpractices through misuse of subsidised rural timber and the black market.”

Karma Dukpa said that there is lack of operational flexibility as the existing policy is stringent, depriving individual customers of direct allotment of timber by NRDCL. “This has, in fact, resulted in huge stock of unsold timber and revenue loss for the company since 2013.”

He also said in the present system, there is lot of timber wastage because of outdated technology the sawmill owners use. “Many of the private saw millers use obsolete machineries and do not invest in updating technology, which results in high timber wastage.”

He said that timber recovery rate ranges between 55 to 69 percent but the wastes generated are substantial whereas newer technology can provide as much as 80 percent recovery.

Refuting the charges of replicating the works of wood-based industries, Karma Dukpa said that as part of the DHI directives on product diversification and value addition initiatives, NRDCL ventured into the introduction of glulam technology to meet special sized and length timber for the Royal Academy Project at Pangbisa in Paro.

“NRDCL is venturing into wood joinery units at Ramtokto and Lingmithang for making value addition and meeting the demand of customers for ready to use wood construction components like floor boards, wall panels, window and door frames mainly by using the residual and hardwood timber,” he said.

Because of the resource loss, the forest department issued guidelines in January 2015 for sawing and selling of old and unsold timber through retail outlets. “NRDCL uses the wood mizer saw mill to salvage unsold timber including sawing of timber for the glulam plant, supply of sawn timber from retail outlets and initiate value addition activities,” Karma Dukpa said. “We will come up with retail outlets in all dzongkhags, irrespective of commercial viability in a phased manner and make timber available at all times for buyers by having a regular supply of sawn timber at regulated NRPC rates.”

The CEO said NRDCL’s move is expected to stabilise the timber prices and eliminate the prevailing malpractices in timber business in the country through a conducive regulatory environment and policy guidelines on timber distribution and marketing.

“The revised modality is geared towards fulfilling the objectives of preventing corruption, inefficiencies and undue profiteering in the collection, delivery and sale of natural resources and other products,” Karma Dukpa said. “The revised modality will fulfil the social mandate through the Royal Command in making the natural resources accessible and affordable to all Bhutanese.”

Although NRDCL has asked sawmill owners to register with them, it was learnt that none of the sawmill owners have registered as of today. “We might have to plan the way forward,” the CEO said.

Agriculture minister Yeshey Dorji, however, said that the agriculture ministry sent the circular of NRDCL becoming the sole agency for timber disposal and distribution so that NRDCL could work out with the relevant stakeholders.

“The sawmill owners have come to see me and I made it clear that the circular was not for direct implementation but for discussion so that timber could be made accessible, affordable and available,” Lyonpo Yeshey Dorji said.

Tashi Dema