From facilitator to competitor

Private sector decries government’s encroachment on its turf 

BCCI: The government should only take up business activities where the private sector does not have capacity and intent; for that too, the official role should be to simply lead the way.

This was the message Bhutan Chamber of Commerce and Industry’s (BCCI) president Ugen Tsechup Dorji conveyed to the government at the annual general meeting held yesterday.

The government, he said, has much to do at the policy level and to harmonise existing laws, which, in today’s situation, are mostly conflicting with one another.

The Construction Development Corporation Limited (CDCL), the president said, was established with the objective of hiring out construction machineries, which the private sector couldn’t, and undertake those construction activities where the private sector did not have the capacity.

“But today CDCL is providing direct competition to the private sector, taking up even small activities like road maintenance,” he said.

Another government entity that competes with the private wood based industries is the Natural Resources Development Corporation Limited (NRDCL).


After several appeals made by the industries to not revise the electricity tariff, Lyonpo Norbu Wangchuk, during the AGM, said it would be illegal to heed the industries’ lobby.

The third cycle of revision takes effect from July 1 this year.

Industrialists, on several occasions, justified that implementation of revised tariff would add salt to the already affected high voltage industries.

Lyonpo Norbu Wangchuk said the government was “handicapped”, since it was the electricity Act that mandates Bhutan Electricity Authority to fix and approve the revision every three years with a progressive annual revision.

Tariff revision is again regulated by the tariff determination rules and regulations.

While, the minister said that the Electricity Act 2001 was likely to be amended in the coming session of Parliament, the tariff determination rules and regulation would also be reviewed.

While NRDCL’s mandate is to ensure optimal utilisation and management of natural resources on a sustainable basis and make such resources available, accessible and affordable to people, the president said it was now venturing into value addition, in which the private sector had achieved considerable feats.

Similarly, members of the private sector are also concerned about the State Mining corporation (SMC) competing with private miners.

However, the economic affairs minister, Norbu Wangchuk, who was also the chief guest during the AGM, reassured that good and responsible private miners would be given their place.  But rat hole miners, he reminded, would have to bow out of their business.

Lyonpo said, even after three decades since the country commenced development of hydropower projects, Bhutanese still don’t have the capacity to prepare a detailed project report (DPR) on its own, let alone examining the DPRs prepared by external consultants.

As for Punatshangchu I, II and Mangdechu, Lyonpo acknowledged that not much could be done to involve private sector, since the contract agreements were already signed. “In the hydro projects hereafter, the government will try to ensure that Bhutanese cement and steel are procured, Bhutanese trucks are hired and Bhutanese are employed,” he said.

Members from the chamber also highlighted the taxation issue.  The president said that, when taxes in the country are rising ever since it was introduced, it only made sense if every business and income of the people escalated simultaneously, but not at a time when businesses are not doing well on the back of economic slowdown. “Regardless of the economic conditions, taxes in Bhutan never came down, it only kept increasing.”

Members also said that if the government is serious about the five jewels of the economy – hydropower, tourism, agriculture, mining and small and medium industries, it should provide incentives such as speedy clearance and access to finance in these sectors.

 

By Tshering Dorji

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