Crushing stone

Obviously wrong

Earlier this year, in “Mining our business”, I’d explained why it would be unlawful for the government to permit L&T, Gammon and HCC to operate stone quarries for the Punatshangchhu hydropower project.

I don’t know for sure, but it looks like L&T, Gammon and HCC are now not operating the stone quarries. That is very good.

But what I do know for sure is that L&T, Gammon and HCC have each established stone crushing plants. That is bad. And that is illegal.

Stone crushing is a specific business, one that requires a separate industrial license, and one that is not open for foreign direct investment. Added to that, the lucrative business is surely outside the scope of the construction contract packages that L&T, Gammon and HCC have with the Punatsangchhu hydropower project.

So why have they been allowed to establish their own stone crushing plants?

I’ve written to the minister for economic affairs alerting him that the plants in question may be unlawful.

 

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Comments

  1. Dear OL,

    This is good. You must also take up the issue of these projects’ insurance coverage that is being taken outside the country.

  2. I think some time ago there was a Kuensel editorial on how big Indian projects are taking unfair advantage and they ought to conform to the way things are done here as is done in Rome.
    Our authorities in order to please our Indian counterparts don’t seem to realize that they are taking away business opportunities away from our own and making profit margins fatter for the Indian companies. Many, many rules have been flaunted to accomodate them at the espense of losing our national dignity and sentiment of our private sector. One should also weigh the long term impact these will have as short term quick fix methods are being consistently applied.

  3. I don’t see it that way. Whenever a business activity is given to a foreign firm or company, Bhutanese always makes hue and cry on the ground that a business opportunity is given to an outsider and that our own business enterprises are bereft of such opportunities. However, the fact is that government only outsource business opportunities to foreigners when our own business enterprises are unable to undertake the work at hand. In this particular case, until now, we just have one stone crushing Company in the west who is monopolistic the business and we know who that belongs to. And honestly, I don’t think this Company can supply the aggregate required by the likes of Punatshangchu project and even if it can, the cost will be inflated that the project cost will shoot through the ceilings.

    So, yeah..the government is calculative and is doing the right thing, as far as I am concerned.

  4. Dorji Tshering says:

    I the questions raised by Dorji are relevnt. Yes it is true that there is only one major stone crushing unit in the west of Bhutan and they have taken advantage of this till now.

    But I do not agree with him on the reason why this is so and the solution. The reason this company has been a monooly is because the past government inccluding some of the urrent ministers allowed this to happen. The reason was definately not because the Bhutanese people are not capable to do this business. It was infact of the government not issuing lcense that other people were not able to establish such companies.

    Second the solution is not to allow Indian companies to break our rules and laws. As OL has pointed out the FDI does not allow Indian companies to crush stone in Bhutan. I wonder if they even have a license and how was it that they have been allowed 100% ownership of such business?

    It is indeed hgh time that PM, Lyonpo Khandu Wangchuck are made to explain. And to do it specifically explain if they have done it respecting our laws.

    India is helping us but it does not mean that their companies shuld be allowed to flout or laws. Otherwise are we a nation or a state of India?

  5. Food For Thought says:

    I am worried that the foreign companies are putting their foot in our soil but I am also happy that the national monopolist will have to compete which in a way should bring down the prices. We are anyway caught between the devil and the deep sea. One one had we have a national who robes us of our little money with exorbitant prices and but with less benefit to the govt. in terms of taxes, just Nu. 50 a truckload (?). On the otherhand we have now foreign companies taking our resources away. But in the end is there really a difference? Afterall we were anyway being robbed bu our own people as well.

  6. However this is not related to the stone crushing issues by FDIs, my issue is related to the monopoly stone crushing enterprise that all of us are aware. I brought a maruti car from the sister agency based in Phuentsholing, and they sold me the van with only one front mirror. When I reasoned with the Indian Dealer in the shop on the road safety issue of the vehicle, diver, passengers and other road users, he told me that the company management decided to sell vans with one mirror. However, I had to pay the full price of the van with two front mirrors. I had to go to Jaigon to buy the other front mirror, and I had to pay another price for the mirror.
    The reason why Zimdra sold vans with one mirror is because they made a profit by selling vans to Bhutanese at full price while they purchased vans from the manufacturer in India at a reduced price for one mirror.
    It was not possible to buy vans from another dealer in Bhutan since Revenue and Customs and Insurance did not accept the registration if the vehicles were not purchased from Zimdra.
    This story is just to add to the fact of the misery Bhutanese create to another Bhutanese.

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