Over a case in the construction of the Dalbari-Dagapela secondary national highway
Lawyers from the works and human settlement ministry rebutted to a compensation claim of Nu 360 million (M) by Gaseb Construction Company yesterday at the Supreme Court after the ministry terminated the contract work awarded to the company in March 2015.
Following a walk-in complaint, the Anti-Corruption Commission investigated the award of the three contract packages for Dalbari-Dagapela secondary national highway, Dagana in September 2014.
While the commission did not find any corruption involved, it recommended that the ministry should either re-evaluate the bids or revoke the contracts and retender them.
The ministry following an order from the Cabinet terminated the works after four months. The Cabinet had consulted the Office of the Attorney General on the recommendations of the ACC.
The construction company sued the ministry for compensation. It claimed Nu 360M for some portion of the work done and the lost opportunity, among others..
Thimphu dzongkhag court asked the issue to be resolved by an arbitration tribunal of the Construction Development Board (CDB) as per the Alternative Dispute Resolution Act (ADRA) 2013. Meanwhile, the court asked the ministry to pay Nu 150M to the contractor as an interim measure.
The arbitration tribunal, including representatives from both parties, came out with a little more than Nu 40.823M compensation that the ministry has to pay the contractor.
At the hearing yesterday, the ministry argued that the defendant should accept the decision of the tribunal. Appealing to the Supreme Court was against the ADRA 2013, its defense lawyer said.
He said the termination of the works were as per the provisions in the contract with adequate notice time.
However, Gaseb Construction Company’s representative said that works were brought to halt abruptly.
Gaseb Construction Company and an Indian company, SPML, formed a joint venture to execute the work through an international bidding process. Of the 31.58km long package worth more than Nu 358M, the company had completed a 9km rough widening of the existing 21.22km feeder road from Dagapela to Geserling gewog. This excludes 5.5km of formation cutting beyond the end of the feeder road.
He said that 16 excavators have remained idle and that he had to pay monthly installments to service loans he availed to buy the machinery.
The ministry’s lawyer said that the ministry couldn’t pay for the machines he bought as the contractor was supposed to have a minimum number of machines to qualify for tendering of the works. “The ministry didn’t ask to buy and deploy additional machinery,” the lawyer submitted.
The ministry has asked the court to uphold the arbitral award and dismiss the appeal.
The ministry had paid the contractor Nu 33.3M as mobilisation fund after awarding the contract, and another Nu 150M as per the Thimphu dzongkhag court’s order.
The lawyer said that deducting the arbitral award of Nu 40.823M, the contractor has to refund Nu 136M to the ministry.
The court asked the contractor to submit details of his compensation claims. The two parties are also asked to be prepared to explain on any of the content whenever summoned.
The Dagapela-Dalbari secondary national Highway passes through five gewogs of Tshendagang, Goshi, Dorona, Gesarling and Deorali.