Today, yet another concerned person asked me about the education city. And he too wanted to hear my views on the 1 billion dollar project.
Some of you may have seen my views in Tenzing Lamsang’s story. But, it appears that many others haven’t. So, with the permission of Business Bhutan, I’m reproducing their entire story….
Billion $ education city under scanner
US$ 500m foreign exchange a year and around 30 international universities on 1,000 acres: this is what the prime minister’s pet project, the planned education city, aims.
If MediaGlobal, a United Nations-based news agency, is to be believed, the ground breaking ceremony for the city is just a year away.
“While anchor universities should start operating initially, it is likely to be 10 years for the entire city to be in place gradually,” MediaGlobal quoted Kushal Sengupta of Infinity InfoTech Parks, the agency that is proposing to implement the project at a site yet to be identified.
But critics of the project say the manner in which the country’s biggest foreign investment plan is being pursued is not proper.
Opposition Leader Tshering Tobgay said that he is ‘very concerned’ about the project by its lack of transparency.
“The Royal Education Council had proposed a similar education city idea. So when the government took over REC, if it felt that it was a good idea, the government should have discussed it, invited international companies, evaluated them and then got the best possible deal for the country,” he said.
He gave the example of the IT Park where road shows were held in foreign countries and the government invited open bids.
Tshering Tobgay said the education city is giving an impression that government policy is being formulated around a particular project.
The government had earlier said it would have a detailed framework of private participation in infrastructure (PPI) for establishing such cities and for soliciting interest from firms. But the cabinet decision to award the 1,000 acres land to DHI in February 2010 based on a proposal from Infinity was done before the framework came out.
Sources in the government told Business Bhutan that this had come as a surprise to senior government officials involved in drafting the PPI. The PPI document released on April 2 states that it is effective only from the date of notification which is April 2 with no retroactive clause. The PPI mentions a detailed bidding process with evaluation and approval committees for infrastructure projects.
“I am very surprised and concerned that the cabinet has already approved 1,000 acres of land for a project that nobody knows about, that has not even been developed and no detailed project report has even been carried out,” the opposition leader said.
The cabinet had recently approved the land as equity for DHI in the education city project and directed DHI to negotiate with Infinity and also look for other suitable partners. This is contrary to what the Infinity official had told MediaGlobal. He had indicated the project would start in a year.
Interestingly, 1,000 acres is the exact quantity of land proposed by Infinity for the education city.
A February 17 cabinet website press release says, “The cabinet has approved giving about 1,000 acres of land to DHI to be used as equity grant in the proposal to build a knowledge city in Bhutan by the Indian-based company, Infinity Techno Parks.”
But questions are asked on why the country’s biggest FDI project is being given to a company that does not have experience in building an education city.
“Infinity is just a Nu 10b company and their experience is in information technology with no experience in education city or even colleges. Something I don’t understand in why the government is eager for a Nu 10b company with limited experience to carry out and develop a Nu 47b project?” asked Tshering Tobgay.
Business Bhutan found that, of Infinity’s 12 commercial projects, most comprised of single or double multistorey buildings in different locations mainly in and around Kolkata. One of them is an information technology office called ‘Infinity Think Tank’ in Kolkata that comprises of two towers with 11 and 16 floor each which its website says is a ‘model of environmental and futuristic aesthetics’.
In terms of size compared to the Nu 10b Infinity, the net worth of owners of Indian infrastructure companies is far higher. Jai Prakash is Nu 175.5b, GMR is Nu 279b and Unitech is Nu 522b.
The opposition leader said the government in its eagerness has already forced the project on DHI when in fact DHI should come with such investment proposals after evaluating them.
“The government should exercise extra caution and transparency the moment family members are involved. It is incumbent on the government to insure that there is no conflict of interest and that the government enjoys the confidence of the people at large,” said Tshering Tobgay.
The opposition leader also said he was worried about the sheer size and impact of the project of bringing in 40,000 foreign students when the population of Thimphu itself is around 80,000. He also said that the 100,000 employment that the project is supposed to generate would involve large scale import of foreign workers into Bhutan. “I think this is dangerous and beyond what we can handle as a society.”
Earlier, in an interaction with the media the prime minister had said, “it is something we are trying very hard to make it happen since it is in keeping with our manifesto and policies to make Bhutan an educational hub where we can bring in the very best of world class educational institutes.”
The prime minister said that if all things go well then it would be the first green city in the world and would set standards not only for Bhutan but for the world. He also said that it would improve Bhutan’s image as a destination for education and provide employment to many Bhutanese.
He said that DHI as the investment arm of the government was negotiating with Infinity to get the right terms and conditions. He said that other previously interested agencies like NAASCOM after showing initial interest had backed out. DHI CEO Karma Yonten said, “we have had some preliminary discussions with Infinity and we are trying to get a feel of what they are thinking about or where this is going.” He said that the project would be put before the DHI board which would give further directions on the course to follow.
He said that DHI would also be doing its due diligence like seeing the background of the company and its implementation capacity.
Another DHI official said that currently DHI would have to try and walk a fine balance between negotiating with Infinity and also try to see if others are interested without losing Infinity.