…drayang owners say compensation is inadequate

Yangyel Lhaden

Finance Minister Namgay Tshering said that the government will pay a one-time compensation to drayang owners, with compensations ranging from Nu 1.5 million (M) to Nu 1M, following the Prime Minister’s executive order to cease the operation of drayangs on January 7.

According to the order, the Ministries of Finance, Labour, and Economic Affairs were directed to collaborate and render necessary support to drayang operators and workers as they explore new avenues.

The ministries issued a notification on compensation and support measures upon the cessation of the operation of drayangs yesterday.

Drayang owners who have retained their business up to the date of issuance of the executive order will be given compensation of Nu 1.5M, and Nu 1M will be compensated to those who surrendered their rented space in 2020.

The notification stated that the principal amount of the bridging loan availed from the National Cottage and Small Industry Development Bank Limited ( NCSIDBL) by drayang owners would be recovered from the source and the balance shall be paid to drayang owners. 

The bridging loan was provided to drayang owners by the government as support during the pandemic.

The interest accrued on the bridging loan will be waived, and on behalf of drayangs, the government will pay the interest subsidy, the notification stated.

An official with the Ministry of Finance said that the compensation amount was based on ground study and assessment done by NCSIDBL on the amount of loan drayang owners have availed.

Chief Executive Officer Kinzang of NCSIDBL said that the office submitted rental loans for drayang owners from April 2020 to December 2021, and there were other loans drayang owners availed such as loans for utilities. “The maximum rental loan availed by a drayang owner from the bank is Nu 1.35M.”

However, drayang owners are unhappy with the compensation amount.

President of the Druk Drayang Association, Kelzang Phuntsho, said that the monetary support from the government did not qualify as compensation since it was only based on rental loans they had availed from NCSIDBL.

“The government has not compensated us on the losses due to closure of business for more than two years, cancellation of licenses, and shame we faced from ceasing drayang operations,” he said.

Chencho Dorji, owner of Dorji Drayang in Thimphu, said that he bought the drayang back in 2010 for Nu 500,000 and spent an additional Nu 1M to refurbish the space. “I have a Nu 1.1M rental loan from NSCIDBL. I will get only Nu 400,000.”

He said that loans drayang owners availed to pay rent were futile and the government could have closed drayangs earlier. “The compensation amount would have made sense then. Many drayang owners have spent more than Nu 3.5M to establish drayangs.”

Karma Dorji, owner of Thankyou Club drayang in Samdrupjongkhar said that he bought a bar license for more than Nu 300,000 and changed the ownership. “Now the government wants us to switch our business and avail bar licenses from the Ministry of Economic Affairs.”

The notification states the Ministry of Economic Affairs will allot a dedicated bar license against the name of the drayang if they are interested, as they surrender their license, and the ministry would also facilitate other forms of entertainment businesses, or even other trades and businesses.

Karma Dorji said that most drayangs will want to switch their business to a bar, karaoke, or a club but the notification was unclear. “We have been running at a loss since the pandemic and we need a loan to start new businesses, but other than the issuance of a license there is no guarantee of a loan, as it has been directed to National Credit Guarantee Scheme (NCGS).”

One of the drayang owners said that it is not clear whether they would be given priority when availing loans from NCGS.

According to the notification, if those in drayang business want to explore alternative business ideas, the option of collateral-free loans through NCGS will be offered.

An official with NCGS said that the bank’s loan was aimed for economic revival during the pandemic, and as drayang owners were economically affected they were eligible, but drayang owners would have to undergo the same screening procedure to meet the criteria to avail the loan.

He said that loans were provided in three sectors; Agriculture and livestock, production and manufacture, and services. “So far we have not provided loans for entertainment businesses such as karaoke or bars, and a separate order was needed to support individuals in these businesses with our loan scheme.”

However, if drayang owners have any ideas, the bank is willing to facilitate and further improve their ideas, he added.

The Ministry of Labour and Human Resources has yet to announce various employment and skilling opportunities for drayang employees.

The notification states the MoLHR will induct drayang employees in various skilling and upskilling programmes based on the preference of the individuals.

The MoLHR is going to issue a separate announcement.