In the last few months, Jinda (a Bhutanese colloquial way of referring to a contractor) Dorji has sold his JCB earth mover, two trucks, and a single-cabin pick up truck. He finds the once lucrative assets to be a burden. The decision was desperate. He didn’t want to default on his loans.
Apart from the odd jobs, the Thimphu-based contractor did not participate in a tender or call for work in two years. This was not because he was not ready, but because there were no jobs. Like hundreds or thousands of contractors registered with the Construction Association of Bhutan, Dorji is losing hope and resorting to trimming down on their assets to avoid losses or bankruptcy.
There are no jobs, says contractors who expected a massive change in the economy. They followed the elections, the promises and also knew that it was time for the economy to rebound after the Covid-19 pandemic that disrupted the economy. Many are wondering what is happening, or not happening.
Like a member of the opposition party pointed out recently in the Parliament, many are wondering when the “budget” the government promised to secure the next day after the election would flow. Some say the so-called petty contractors are dead because of lack of petty jobs for them to survive on.
The private sector known as the engine of growth is waiting. They are impatient and frustrated. The recent discussion on overhauling the procurement rules and regulations provides a hope, but it is not enough, they say. They are asking the government and authorities to relook into the procurement system, to understand the ground reality. By ground reality, they mean the links, network, and the faces involved in those awarding and getting jobs.
There are major projects in the country requiring huge budgets. Many in the private sector are convinced that there is a serious problem in the procurement systems. Some are even questioning the birth of a few new business entities that got jobs worth millions without having to follow the standard procurement process. Transparency, they say, is often obscured by dropping names and the importance of the projects.
The Construction Association of Bhutan is worried that many contractors are on the brink of financial collapse, with some receiving loan deferments until June next year while others struggle with non-performing loans. We cannot keep all contractors happy or afloat, but letting them compete by, for instance, not awarding jobs directly or bypassing formal procurement process would open up opportunities and competition.
With the economy yet to rebound, even with the stimulus plan fund, the concern is that the private sector is failing, and becoming more dependent on the government. Even as the economic stimulus fund is being rolled out, there are questions on its conditions, including if some activities are really meant to stimulate the economy or are mere handouts.
A slogging private sector will have repercussions. As businesses fold, there will be joblessness and frustrations. This will add burden to the government. The private sector, from contractors to traders to suppliers, is convinced that there are jobs enough to keep them going but they suspect direct award and over-stepping of procurement processes is making the situation worse.
While the easy way is to rule these as mere baseless complaints, it is worth listening to them, and more importantly, taking them on board for decision making, and see if we are failing in our policies to deny them the fuel for economic growth.
