Study finds corruption as one of the causes for the poor quality of roads
Wrongdoings and corruption in public road construction between 2010 – 2015 had a financial implication of Nu 467.67 million (M).
This is an average loss of Nu 77.95M annually, according to the recent Anti-Corruption Commission report, Towards Enhanced Efficiency, Accountability and Transparency in Public Road Construction.
The report states that the road sector’s average GDP contribution in these six years was Nu 11,325.40M. If there were no wrongdoings, it stated that about Nu 0.69M would have been added to GDP.
Royal Audit Authority’s annual reports were analyzed to calculate the average amount lost per year and to evaluate the financial cost of corruption or wrongdoings.
Excess payment, claim of new rates instead of old, failure of execution of gabion wall, irregularities in execution, overpayment, refund on humanitarian grounds, and unspecified and defective materials were wrongdoings observed in road construction.
The report also showed that in terms of assessment of road condition by dzongkhag, majority of respondents from Thimphu, Chukha, Mongar, Pemagatshel, Lhuentse and Sarpang reported dissatisfaction. Most respondents stated that even if they were provided with roads, it did not serve its purpose.
Lack of accountability, undue influence, poor supervision, monitoring and enforcement, unfair practice, and dishonesty were some of the key causes of corruption in public road construction, according to the report.
For instance, existence of abuse of authority in various stages of road construction was reported most of the time. But its existence was reported all of the time in the opening of bids (81.3%), submission of bids (80.9%), letter of intent to award (80.5%), release of retention money (78.5%) and preparation of bid documents by the bidder (78.3%).
“The ACC received 58 complaints related to such abuse of authority in road construction,” the report stated. “A total of 51.9 percent of respondents said they were aware while 48.1 percent said they were unaware.”
The report found that 1.6 percent agreed on undue influence by the ministers; 0.9 percent by the head of divisions or sections and 0.8 percent by the gewog officials. It also revealed that influence from public officials including elected representatives has resulted in the implementation of road projects that were not planned and shelving those that were planned.
Frequent replacement of site engineers by contractors is a serious issue raised by the procuring agencies where 62.5 percent of the respondents agreed that this is happening.
The study confirmed that majority of respondents agreed that the requirement of technical staff at the contract site were not followed by the contractors despite the contract terms.
The contractors acquiring materials illegally was also an issue for 34.7 percent of respondents. It stated that 18 percent of respondents agreed that projects were contracted without bidding and 16.9 percent said the contract was not awarded even after proper publicity and open competition.
Other practice observed were disclosure of confidential information and contract terms relaxed to favoured contractor. This finding, according to the ACC is further complemented by the complaints about unfair practices.
About 48 percent reported fear of repercussion to report corrupt practices such as substituting with substandard materials, contractors providing false documents in bidding, changes in high value items not properly verified and monitored, public officials borrowing money/vehicles/materials from contractors, and neglect of duties by the site supervisors after taking bribe.
On an average, each contractor made payment once in kind and six times in services. An average amount of payment in cash and in-kind was calculated at Nu 50,000 and Nu 6,500 respectively and Nu 56,818.18 for services provided by the contractors.
Engineers, committee members and AFD personnel agreed to have taken bribes.
The study was done with financial support from Swiss Agency for Development and Cooperation (SDC) and the government. From a sample size of 1,464 respondents, 1,178 were interviewed in May this year.
From a mere share of Nu 62M in the first Plan for the road sector, the government allocated approximately Nu 16B for roads and bridges in the 11th Plan. “However, the huge investments made in the sector do not match the benefits that were expected to accrue,” the report stated.
The construction sector contributed 16.86 percent to GDP in 2017 from 6.5 percent in 2008.
ACC Commissioner Jamtsho said all relevant agencies are expected to follow the commission’s recommendations and that ACC would monitor its implementation.
Road officials said they are still going through the report to act on the recommendations made by ACC.
RECOMMENDATIONS
– Lack of guidelines for contract implementation, supervision and monitoring.
– Review technical score system, develop and enforce quality assurance plan, adopt and implement integrity initiatives, and implement model guideline on management of conflicts of interest in the public sector 2017.
– Effectively implement Gift Rules 2017
– Conduct awareness on Procurement Rules and Regulations, initiate capacity development for engineers and contractors, develop data mining policy at the agency level, and engage community in monitoring and assessment of farm and GC roads as part of social accountability.
– Review and revise national wage rate. The current national minimum wage rate is Nu 125 a day while the minimum market rate is Nu 500 a day. Construction sector has the capacity to absorb and provide employment to more than 10,000 people but there is low demand for jobs due to low wage.
Yangchen C Rinzin