NRDCL says the new system protects consumers and addresses price escalation
About 100 truckers who transport sand have appealed to the government against the introduction of a new system, which requires the transaction of sand to be routed through the Natural Resources Development Corporation Limited (NRDCL).
This means that construction owners should place requirement of sand with the NRDCL and not transporters. The buyer deposits the cost of transportation to the NRDCL, which then pays the transporter on behalf of the construction owner.
The rule, which applies to the supply of sand from Wangdue, came into effect on January 1.
An appeal letter signed by 101 truckers appeals the Prime Minister to reinstate the old system, which allowed construction owners to directly buy sand from transporters without the involvement of NRDCL. Truckers said the NRDCL deducts one percent of the transportation cost as service charge.
When the NRDCL was planning to introduce the system, agriculture secretary Rinzin Dorji on December 21 last year had written to the Druk Holding and Investments (DHI) Chairman to maintain the old system until a consensus among stakeholders was reached.
In another letter to the DHI chairman, the secretary had also stated that the aspects of pricing and monitoring should be jointly discussed and finalised between the department of forest and park service (DoFPS) and NRDCL.
“In view of the above and in line with the instructions received from the Hon’ble Prime Minister, the ministry would like to request DHI for a joint review of the modality to facilitate a consensual agreement among all parties concerned,” the secretary stated.
However, CEO of NRDCL, Sonam Wangchuk, said the company and the government are now on the same page after a miscommunication between the two was cleared. “The government initially thought we were going to put a cap on the number of trucks,” he said.
He said that the new system would protect consumers and address price escalation. “Previously, truck owners were working like the owners of sand, which is a national resource,” he said.
Agriculture minister Yeshey Dorji said the government did not want to put a cap on the number of transporters. “After NRDCL said that they would not limit the number of trucks, the government agreed with the new system,” he said.
Before the introduction of the system, he said that transporters were hiking the price and that the new system would help regulate the price.
While truck owners claimed that they are now allowed to carry only two loads of sand a week, lyonpo Yeshey Dorji said they could carry as many trucks as allowed by NRDCL.
The NRDCL on December 16 last year issued a notification in the media informing the people about that the implementation of the sand transportation system.
“Our job as a marketing agency of the government is to protect consumers and we consulted all stakeholders before implementing the rule,” CEO Sonam Wangchuk said adding that the company will limit the misuse of sand while meeting the requirement in the market. “This initiative will also contain black market.”
A truck owner requesting anonymity said, “It has really affected our livelihood and we requested the NRDCL to keep the old rule during a meeting.”
Kuensel met about 10 truck owners yesterday who said they would be unable to pay their loan instalments if the new system is not withdrawn.
The cost of transportation of sand from Wangdue to Simtokha, Thimphu has been reduced to Nu 6,772 per truck from Nu 7,059, which is a reduction of Nu 287. The rate increases after every 3km radius along with one percent deduction of administrative charges applicable only to construction owners who do not own trucks.
Assuming that a truck carries only two loads of sand a week, it would earn about Nu 54,000 in a month.
However, the truck owners said that the reduced income is just enough to repay the loan, pay the driver’s salary and meet expenses for maintenance. A truck driver’s salary ranges between Nu 12,000 to 15,000 a month and about Nu 20,000 should be paid as vehicle loan.
“There are many other costs involved in operating a truck. There will be hardly any left for the truck owner,” said another trucker owner.
The NRDCL CEO said transportation prices had to be reduced with the reduction in the fuel price. “We got instruction to reduce the transportation cost and it is reasonable,” he said.
The truckers also said that the need to route the transaction through the NRDCL was a hassle.
According to NRDCL, about 60-65 percent of sand supply to 11 central and western dzongkhags is met from Wangdue.
“Even though the cost of sand at source is regulated by Natural Resource Pricing Committee, sand cost to end consumers is escalated by some transporters despite several measures taken by NRDCL to prevent such price hike,” the NRDCL’s notification stated.