Rajesh Rai and Younten Tshedup
Truck owners in Phuentsholing who are defaulting loan repayment is increasing daily.
More than 100 dumper trucks have defaulted loan repayment with various financial institutions, sources have confirmed.
Banks, however, did not share specific figures with Kuensel.
Defaulters are mostly involved in boulder export works from Toorsa.
With the mushrooming of boulder business in the bordering town since last year, the market saw a huge upsurge in import of dumper trucks.
Dredging and export business also started from Gelephu and Samtse. In 2018, more than 1,000 dumper trucks had hit the roads. Sources say there are about 2,000 dumper trucks in the market today.
A setback in the business
With the load restriction imposed by the Anti Corruption Commission (ACC) in May this year, boulder business has not been the same, many exporters say.
Although the initial trend of carrying loads beyond limits resumed after a brief hiatus, the export business saw a downfall since September this year.
Export from Fulbari, an Indian town that borders with Bangladesh from where boulders enter into Bangladesh was at halt for almost a month.
By then, the truckers had started to default.
In Gelephu issues with locals in Meghalaya along the Indian highway became a major challenge for exporters and transporters.
Reasons such as the Bhutanese trucks damaging the roads along Tura-Dalu stretch in Meghalaya with extra loads and non-compliance with local authority has put the once thriving business to a compete halt today.
The cost from the setback
Price of a dumper truck ranges from Nu 2.7 million (M) to Nu 3.8M depending on the capacity and options.
According to sources, one bank lent Nu 1.24 billion (B) in transport loan for heavy vehicles in 2018 alone. Heavy vehicles include dumper trucks and excavation machineries. However, this figure dropped to Nu 427M this year until now.
As per the Royal Monetary Authority’s (RMA) recent report on ‘credit exposure in financial sector’ until June this year, the transport sector comprises of five percent of the overall loan composition, which is Nu 6.74B.
Out of this, a total of Nu 1.35B falls as transport Non Performing Loan (NPL) outstanding, which is six percent of the total NPL composition. The report further reveals that transport loan and NPL has both increased over the years. Between 2015 and 2018, transport sector loan grew by 28 percent. Subsequently, NPL also increased by 46 percent.
Bank officials say defaulters are increasing. However, they have not openly shared information about dumper trucks involved in boulder export.
A bank official in Phuentsholing said their office had seized a few heavy machineries after owners defaulted.
“People involved in the trade are saying business is down at the moment,” the official said. “Contractors are also defaulting on their overdraft facility.”
The official added that some of the defaulters are untraceable.
A bank manager said their bank has not lent much on the transport vehicles in Phuentsholing. He said they were cautious ever since transport loan experienced defaulters in the past.
“If the number of vehicles increase in the market suddently, we knew there would definitely be some problems,” the manager said.
The business today is down by more than 50 percent. With majority of the profit going for the transporters, there is hue and cry in Phuentsholing these days. Truck owners are assuring their financial borrowers with undertakings.
What is the government doing?
Prime Minister Dr Lotay Tshering during a meet the press session on November 29 said that the government has not taken any new stand on the issue except for the dredging works in Toorsa.
“Because of the requirement of CDCL and for the Phuentsholing town expansion project, we had made some changes, otherwise we do not have any different stand on boulder export.”
Export and surface collection works from the Toorsa river basin were closed on October 25.
The decision was taken after the government reviewed the Phuentsholing Township Development Project (PTDP) as Construction Development Corporation Limited had raised concerns that the river materials would be required for the PTDP.
An exporter involved in dredging said many invested in dumper trucks considering the business viability.
“Government abruptly stopping boulder export is causing people to default,” he said. “The government should have considered the eventual consequences and advised financial institutions about their intent.”
Those in the dredging business also said that the load limit capacity is not the problem that caused truck owners to default their loan repayments. As long as the exports remain constant and regular, such minor incidences could be solved amicably.
The main reason behind, he explained was because of the high demand of Bhutanese boulders compared to that of boulders from India.
“The Indian truckers are stopping our trucks out of frustration,” he said, adding that the disturbance along the route is the main reason for truckers to default.
Economic affairs minister, Loknath Sharma, said that the works at the Toorsa basin was stopped since the materials would be needed for the PTDP.
Lyonpo said that the main problem in boulder business is local issues among the truckers and exporters in the bordering areas. “These people should come to a consensus to resolve the problem.”
In Assam, he said that there is not much the government could help since the issues are at the grassroots among the exporters and locals. “I leave for Kolkata in December and I would be taking this up with relevant agencies to discuss possible solutions. Hopefully, we can resolve the problem in Fulbari.”
The inland waterways, which began a few months ago to resolve the transportation issues has not proven effective so far.
Lyonpo said that the ministry is working to restart the riverine network from Dubri in Assam, India.
“The best solution is to start the riverine route and we have reached an advance level,” he said, adding that works to establish the required customs facilities in Chillmari, Bangladesh is almost complete. “We are also requesting a few more ports in between Chillmari and Narayanganj.”
Without a custom’s office at Chillmari, many waterways consignment have been stranded for days at the border in the past.
The minister added that all issues would be resolved and the riverine route would be ready for operation by the end of the year.