The joint sitting of the Parliament yesterday agreed that the government will provide adequate time and resources for preparation of Detailed Project Reports (DPRs) for future hydropower projects to avoid cost escalation and delay in implementation.
The decision was taken as per the recommendation of the Parliament’s Public Accounts Committee (PAC), which comprises members from both Houses.
To achieve the objective, the joint sitting resolved that it was important for project authorities to review the relevance and applicability of Indian standards and guidelines to suit Bhutan’s conditions.
MPs including Trongsa’s National Council member Tharchen said that one of the reasons for project delays was that DPRs were prepared hastily.
“DPRs lacked accuracy as they were prepared in just two to three years,” he said, adding that it took about seven years in other parts of the world.
The issue came up during the deliberation on the PAC’s report on the Royal Audit Authority’s (RAA) performance audit report on Punatshangchhu-I. The performance audit was carried out in 2015.
The performance audit had recommended the government to put in place a clear policy for fund management by the project. The RAA found that the budget for the Punatshangchu-I was unrealistic with an average unspent fund accumulation of Nu 998 million per year from 2007 to 2015.
MP Tharchen said that all managing directors are Indian and asked if there was a possibility of appointing Bhutanese for the post. He also said that it took a long time for projects to implement any corrective measures whenever the projects encounter geological glitches.
“The headquarters of some consultancy companies are based in Delhi. If there is any problem at the project site, the head office in Delhi has to approve,” he said, adding this as a cause of delays.
Lamgong-Wangchangg MP and former Economic Affairs Minister, Khandu Wangchuk, explained that it was convenient for projects to appoint an Indian as managing director.
“The managing director has to deal with Indian authorities for funds and other matters. It’s convenient for hydropower projects to have managing directors from India,” he said.
Labour minister Ngeema Sangay Tshempo said that the government is trying its best to recruit as many Bhutanese as possible in hydropower projects. He said that the labour ministry is in talk with the projects to persuade them to recruit more Bhutanese.
The government has not implemented the RAA’s recommendation to make Detailed Project Reports (DPR) “more realistic” and that decisions for major changes should be based on comprehensive study, analysis and reports and recommendations of experts. The PAC states that this recommendation has not been implemented at all.
According to the PAC, inaccurate DPR coupled with improper decision of both the consultant and the management led to major changes and deviation during the execution of the project thereby resulting in huge cost and time-overrun.
Since an accurate and realistic DPR would mean implementation of project activities with greater degree of certainty with minimum geological surprises and changes in the design during execution, it would be prudent to allocate more time and funds for preparation of DPR.
Another recommendation of the RAA was to strengthen supervision and monitoring initiatives of the projects. This, according to the PAC, has been partially implemented.
According to the PAC, monitoring and supervision to ensure efficient execution of works are being followed in respect of different packages and also contractors have deployed technical personnel as per the need.
Meanwhile, the sitting rejected the PAC’s recommendation to revise the Gewog Development Grant (GDG). This was also the recommendation of the RAA.
The RAA had asked to revise GDG and the existing GDG allocation system. The RAA stated that it was important for the government to revise the GDG guidelines to optimize the use of scarce public resources.