Corruption explodes in Bhutan

Photo: The Bhutanese
Photo: The Bhutanese

Barely weeks after the Transparency International published its annual report stating Bhutan is least corrupted in South Asia, a major corruption scandal has shaken Bhutan badly. The case was silently ignored by the government despite media reports.

The case is not barely corruption scandal rather an exposure of the continued power struggle between the political leadership and the bureaucracy. It is an open secret that Bhutanese bureaucracy had silently dislikened the introduction of democratic reforms. It was this bureaucracy that exaggeratedly publicised that Bhutan monarch introduced democratic reforms despite denial by the people.

The previous Thinley-government maintained better relations with the bureaucracy – in exchange for the bureaucracy’s last minute ditch to influence public to vote for PDT in 2008. The better relations continued with sharing commission on major economic project, which started to spill our as the DPT government falls apart.

The latest scandal is the peak of bureaucracy’s continued silent trade with DPT’s commission business. As the bureaucracy, as alleged, tries to undermine the authority of the elected PDP government, Tobgay-government shocks Bhutan with the BANG.

Punatshanchu-II in June 2012 gave BHEL Nu 9.50b worth of electromechanical works while Mangdechu in January 2013 gave a total order worth around Nu 6.94b to BHEL. This would mean that if an overall ‘fee’ of 1.5% is levied then the total payment to be made to BVT by BHEL would be around Nu 240m for for these two projects. However, after much bargaining, the deal between BHEL and BVT was set at 1.35% for Mangdechu project, instead of 1.5%.

The Indian magazine ENERTIA had alleged that secretary of the Ministry of Sonam Tshering has hand hand in the commission process. This is substantiated by the turn of the event – the initiation to seeks Indian government’s support against allegation was taken by Tshering at the CoS meeting. Tshering presented to the CoS meeting on October 2, 2014 the copies of two articles in ENERTIA published in its August 2014 issue. It appears the source of all these corruption exposure is former Bhutan Electricity Authority CEO, K. B. Wakhley.

Despite the suggestion of the OAG that issue has to be thoroughly discussed by the cabinet before seeking Indian support, the CoS never felt the need to consult the government. Party, this process was fuelled by the enmity between Wakhley and Tshering. Certainly, Tshering tested his authority to take action against Wakhley and AG Iyer, the editor of ENERTIA, through his own channel.

The life of Wakhley is in threat. OAG has advised the CoS to file case against him under National Security Act, which would send him to prisons on charges of treason.

But Tshering stood against the AOG advises and pushed on to write to the government of India on pretext that ENERTIA’s attempts are damaging to the Indo-Bhutan relations.

On December 2, 2014, Foreign Secretary Yeshey Dorji sent a strongly worded letter to the Indian Ambassador exhorting the GoI to act on the issue. A minister was aware of this drama only on 9 December, possibly through officials in the Indian embassy since the CoS had until then hid the issue from the minister and had no intention to inform the cabinet.

The letter says, “..the Ministry of Foreign Affairs would like to convey the Royal Government’s shock and deep concern over the political inferences made in the articles that have serious implications on Bhutan’s domestic politics as well as its relations with the Government and People of India.” It add, “The allegations made against former leaders of our two countries and a senior official of the RGoB are unsubstantiated and derogatory in nature.”

Tshering’s defence against the former politicians clearly indicates existing bond between DPT leadership and the bureaucracy.

In a presentation during the Hydro Vision conclave, ENERTIA editor A G Iyer claimed BVT is owned by former prime minister Jigmi Thinley. He further claimed former minister Khandu Wangchuk and Thinely are pro-China and had threatened BHEL to use China card to get commission.

His statement give little indication of the RAW tactics used in demoralising people and the agency’s angst against Thinley meeting Chinese leader.

Whatever may be the political mission and personal vendetta, this exposure has demonstrated the possibility of high value corruption scheme in Bhutan’s hydropower projects. If Nu 240 million is shipped off from two project, it would be less to imagine that more than Nu 1 billion has ended into accounts of few leaders in Bhutan. This is extremely big amount considering Bhutan’s economic size and population.

Should TI population and economic size of a country to conclude the corruption index of a country?

BHEL projects in Bhutan
1. 60MW Kurichu
2. 336MW Chukha
3. 1020MW Tala
4. 1200MW Punatshangchu I
5. 1020MW Punatshangchu II
6. 720MW Mangdechu

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