Economic roadmap task force recommends reforms
Yangchen C Rinzin
The current procurement and contract system is a hindrance in the development of the construction sector, according to the draft report the 21st economic roadmap task force submitted to the government recently.
The taskforce suggested reviewing the current procurement and contract system. “The government must explore alternative procurement modes that could foster builders’ engagement in the project beyond the construction phase,” the task force proposed.
If enhanced and given importance, the fledgeling construction sector could become one of the drivers of economic activity and a significant contributor to revenue generation, employment creation, and capital formation.
The draft 21st Century Economic Roadmap estimates the sector to contribute Nu 77,872 million to the Gross Domestic Product, and create more than 30,000 additional jobs by 2030.
Despite the Covid-19 pandemic’s impact on the economy, the task force suggests Bhutan consider it as an opportune moment to attract and maintain a dignified domestic workforce. “The government should ensure locally available raw materials in the construction sector,” the draft suggested. It proposes the government to relook into the current procurement system like a shift from a transitional “bid, build and handover” coupled with the evaluation process of identifying the “lowest evaluated bidder.”
The task force also suggested the government to look into the construction raw materials issue. “With the availability of local raw materials such as timber, cement, sand and boulders, Bhutan must prioritise and work towards using these resources either in “raw or value-added form,” it stated.
It also suggested professionalising the construction sector while also recommending to streamline the Foreign Workers Policy. “This would ensure an appropriate and pragmatic balance between foreign and local workforce.”
Another suggestion is on encouraging Foreign Direct Investment in the construction sector with clear conditions such as national workforce requirements. The construction sector in Bhutan employs around 50,000 individuals, of which, 85 percent of the workers are expatriates, from the neighboring Indian states in Assam and West Bengal.
As of 2020, more than 8,000 Bhutanese were employed in the sector.
Foreign labour accounts for 90 percent of the workforce in the sector costing about Nu 7 billion (B) and around Nu 5.76B for the import of construction materials.
The task force has said that the disproportionate composition is attributed to low wages, poor working conditions, lack of job security, and social stigma as perceived by domestic workers.
The restriction of foreign workers and the import of construction materials due to the border closure in March 2020 has affected almost all construction activities.
This includes 797 major construction projects of the 12th Five Year Plan (FYP) worth over Nu 42B. As of June 2020, the total demand for foreign workers was estimated at 35,567 with 18,838 skilled and 16,729 unskilled workers.
As of 2020, 2,528 registered construction firms have provided almost 50,000 employment opportunities or 19 percent of the workforce.
Having completed the development of roadmap, the draft has been submitted to the Gross National Happiness Commission Secretariat for onward submission to the government.