Bhutan and the Maldives have signed an Air Services Agreement

Bhutan and the Maldives have signed an Air Services Agreement, paving the way for the two high-end tourist destinations to be connected by direct flights or flights transiting through other countries in the region.

The flight details and routes will be worked out between the airlines of the two countries, one a tourist hot spot on the roof of the world and the other an ultimate destination for those interested in sunbathing and deep sea diving.

The Maldives Minister for Transport and Communication, Mohamed Adil Saleem, and the Secretary for Information and Communications in Bhutan, Dasho Kinley Dorji, signed the agreement on May 8, 2011. They emphasised the fact that air connectivity was vital for tourism and broader economic development. High-end tourists could find the connection a very attractive possibility with the tourism industry viewing both countries as niche markets.

Bhutan, which saw about 40,000 tourists last year, is currently building three new domestic airports. The Maldives, which is constructing its third international airport, has achieved an escalation of tourist numbers to about 800,000 tourists a year and is still expanding.

With Bhutan holding the chairmanship of SAARC, the agreement is also a step forward in one of SAARC’s goals, to connect all the capitals of the region.

Source: Kuenselonling

Divestment of the government’s holdings in Bank of Bhutan

The divestment of the government’s holdings in Bank of Bhutan, or increasing the bank’s share capital through a primary float, must take place by June 1, failing which a severe penalty will be imposed, the central bank announced yesterday.

“The timing is not negotiable,” the central bank’s deputy governor, Eden Dema, said.

The bank was levied a penalty of Nu 5,000 a day from November 8 last year to 8 April 2011, for failing to comply with the central bank’s deadline to issue the prospectus for divestment. “The penalty was imposed almost three and a half years, since the directive to divest was given,” Eden Dema said. The penalty accrued is Nu 750,000 which the bank wants waived, but the central bank has denied.

The central bank directed BoB to go public, based on the regulations for the establishment of commercial banks in March 2007.

But officials of Druk Holdings and Investments (DHI), which holds 80 percent of the bank, said it might not be possible to revalue the bank’s assets to determine its share price before June 1.

Although RMA also provided options on how to determine share prices, based on the banks audited account of December 2010, DHI’s executive director, Damber Singh Kharka, said the recent balance sheet of the bank does not reflect the current value of its assets like land and its investments on shares.

“Valuation of a company assets, which has been in the market for 43 years, may require a great deal of time,” he said. “The bank doesn’t have the capacity to come out with a proper valuation within June 1.” DHI had also considered requesting international consultants to assist with determining the share prices.

On the criticism it received on preempting the parliament with regards to divestment, Eden Dema said, if RMA had to wait for the Financial Services Bill to be passed in the parliament, it would also have to stop the operation of new banks, because it comes under the purview of the FSA.

On April 11 last year, the bank decided to go public on its own accord and offload 33 percent of its holdings and had sought RMA’s approval. However, the next month, DHI sent a letter to the central bank to reconsider the public float.

RMA has suggested that the bank could either make an offer for subscription or an offer for sale.

Offer for subscription would mean enlarging the share capital. The bank’s paid up capital could increase to Nu 533M, if Nu 133M worth of shares was floated to the public.

The offer for sale would require the shareholders DHI and State Bank of India to offload 25 percent of the holdings.

Eden Dema said the offer for subscription is better, since it benefits the company in the long run.

The central bank arrived at a share price of Nu 577 a share, according to figures available with RMA. The banks paid up capital at Nu 400M, its reserves at Nu 1.9B, retained earnings at Nu 883 and the total number of shares at 4M.

According to the procedures and timeframe for the divestment set by RMA, it will require the bank to prepare its prospectus by May 6, submit it before May 20 and publish the abridged prospectus by May 27.

Source: Kuenselonline

Dot Com beat BTCL in BCCB Twenty20 Championship

In a totally one-sided game, team Dot Com beat BTCL comfortably by six wickets, to emerge winners of the Twenty20 championship, the final of which was played yesterday in Thimphu.

Opting to bat first after winning the toss, BTCL were bundled out for 60 runs. BTCL had no answers for Dot Com’s opening fast bowler Lobzang Younten, as he went on to take three wickets, giving away just 11 runs.

On the other side, off spinner Susil Sharma picked up three wickets, giving away only three runs. Captain Jigme Singye and Nima picked up two wickets each.

BTCL’s opening batsman Tandin Wangchuk was the only batsman from the team to reach double figures (17 runs).

Dot Com took 14 overs to reach their target for the loss of four wickets. Subash remained not out at 21, while Dechen scored 10 runs. Phuntsho Wangdi was the pick of the bowlers with two wickets.

“We’re looking to make a tour to Kolkata and get our boys some tournament practice,” DK Chhetri, Dot Com enterprise and club owner, said after the emphatic win.

“We promised to support two students for further in-country studies in the next academic year and, at the same time, we’re looking to form a permanent club website and continue to support students financially for their academics as much as possible,” team manager and player, Ashish Chhetri, said.

Dot Com took home the winning amount of Nu 30,000; while runners-up BTCL won Nu 20,000.

Dot Com captain Jigme Singye won the man of the match award and a cash prize of Nu 3,000; while teammate Susil Sharma bagged the best batsman of the tournament award. Rigsum’s Sampath was awarded the best bowler of the tournament.

The tournament was organised by the Bhutan cricket board.

Source: Kuenselonline

Bhutan GNH: Part IV - Corporate responsibility and the potential for oil and mineral exploration in Bhutan

Between the 1970s and 1990s, the Geological Survey of India (GSI) did the mineral exploration in Bhutan and covered 33 percent of the country. The GSI found potential for oil in Bhangtar, in Phuentshothang gewog of Samdrupjongkhar, traces of gold, silver and copper in the Black Mountains and tungsten in Sarpang dzongkhag with an estimated value of Nu 50 – 60 billion.

Now there is an American mining company willing to follow up on these finds and to explore the rest of the country with a few strings attached. In 2009, Kuensel reported that US-based Cline mining corporation is trying to gain mineral exploration rights for the entire country. J Matthew Fifield, managing director of the Cline Group, proposed he would get a group of American investors to invest in Bhutan’s mining sector “in a big way.” The Department of Geology and Mines (DGM), and Druk Holding and Investments (DHI) — through which Fifield communicated with the government — expressed interest in the proposal and were studying it, said the newspaper report. If an agreement were reached, the mining company would get exploration rights, and the government would get mining shares and royalties.

According to DGM, nothing has yet been done to implement the 2009 Cline mining corporation proposal, which is still in the conceptual stage. The department reportedly would not consider or act upon any proposal until the draft mineral development policy is finalised.

Druk Holding and Investments, however, is currently encouraging interest in potential mineral exploration and extraction by “seeking partners to invest” in mineral-based industries, among other areas. According to DHI, “With the development of the mineral development policy, there will be opportunities for investments in extraction of minerals and mineral-based businesses.”

Both these statements, and that of DHI in particular, indicate the potential for the proposed policy to open the floodgates to mineral exploration and extraction throughout Bhutan. Certainly DHI is explicit in referencing the new policy as providing “opportunities” for mining activities. While the Cline mining corporation proposal has been stalled since August 2009, approval of the draft mineral development policy may well provide the means through which the Cline “conceptual” proposal becomes reality.

Before dealing with Cline mining corporation or similar mining corporations, the government needs to assess these inevitable aforementioned long term costs that have been associated with mining operations worldwide, and to determine whether such activity is in keeping with GNH values, principles, and practices. Needless to say, in negotiating with any foreign company, RGoB will also certainly want to ensure that the company is indeed responsible, without any past negative social, economic, and environmental record, and therefore likely to operate according to GNH principles and practices in a country with the avowed philosophy and policy of adhering to those values and practices. However, recent news reports out of the U.S. raise a red flag regarding the Cline Group’s past environmental record in its home country. For example, concerns are currently being expressed at public meetings by residents and environmental groups over a highly contentious proposal by the company for an open-pit iron mine, slated to destroy an ancient mountain range in Ashland counties, Wisconsin. Investigation of such past and present activities is clearly essential to establish a clear profile of any foreign company invited to participate in this country’s unique development strategy that can be a model for the world.

A caveat
Impact of the best of intentions, policies and strategies will be less in the existing environment. Unless the prevailing environment of weak enforcement, poor monitoring, poor accountability, lack of professional capability in particular in assessing the total costs of exploitation of natural resources, which, I believe, must be computed to rationally fix rents, fees, royalties and evaluate bid offers and compensation for communities change, creation of new bodies or policies will not bear much value. Public interest that the paper is expected to protect, during implementation will give way to private interest, which generally is the case now. Institutions will be abused to legitimise wrong decisions and to peddle private interests. Community elites and local officials will be mobilised by the influential proponents for their gains.

Choosing a development path for the future
More disturbingly, such immediate concerns about whom we might be inviting in to exploit our land should provide a deeper invitation to the government and the people to assess the real purpose and potential impacts of the proposed mineral development policy. Certainly DHI, at least, appears to see the new policy as opening the door to what could be a sharp increase in mining activity nationwide, and is already “seeking partners to invest” in this activity, among other areas. But who are these potential partners? And would such a move exchange an apparent short-term economic gain for a potentially devastating long-term loss that could carry huge and irreparable costs to our nation’s precious earth and ecology? And does our future lie more with the massive, profit-hungry multi-national corporations that are inevitably associated with large mining operations or with smaller, more self-reliant Bhutanese endeavours with a real commitment to the land and its people (hopefully)?

The National Environment Commission’s answer to those questions is crystal clear, and points to a clear choice between two different visions of our country’s future that deserves to be invoked at this crucial point in history. As stated in Bhutan’s NEC 2008 report:

“The concept of large-scale industrial development is in direct conflict with the country’s policy of environmentally sustainable development especially when bearing in mind the country’s fragile mountain ecosystem and limited usable land…. The potential for future industrial development in the country lies in the development of a network of small-scale and cottage industries based on sustainable management of cultural and natural endowments, especially focusing on niche products such as hand-woven textiles using natural dye and organically produced food and medicinal products.”

The goals and values of GNH are clearly aligned with the above statement of the NEC. But, how effective is NEC with its strong team of well educated and well exposed professionals? We have managed thus far to act as superbly responsible stewards of a land rich in biodiversity and aesthetic beauty—guardians of some of the world’s most precious natural heritage. That remarkable legacy of stewardship was formally acknowledged in 2005, when the United Nations recognised Bhutan as “Champion of the Earth” for placing the environment at the very centre of all its development policies, and thereby setting a vital example to a world with a sad history of destroying its natural assets at incalculable cost to human society and other species.

Only if our deeply-felt ecological “conscience” and commitment to GNH - the extraordinary legacy of its wise and benevolent monarchy, the Fourth Druk Gyalpo, and its profound ancient wisdom tradition - continue to be put into practice in policies today will we continue to protect our own precious heritage. And only then can Bhutan act, in the words of world-renowned ecologist Dr. Vandana Shiva, in a recent visit to Samdrupjongkhar, as “a lighthouse for the way the world should be if the world has to have a future.”

I strongly feel that this is the context within which the proposed draft mineral development policy must be assessed, and within which the deeper question must be asked whether a pro-active mining policy, with all its known ecological and health impacts, is compatible with the country’s deepest held values and principles. The decisions made today will have far reaching implications for us, for its unsurpassed natural assets, and indeed for the world.

By the way, what does NEC have to say on the policy?

As I sat solemnly in the kuenrey of Tashichhodzong on March 18, praying for Japan and our Japanese friends, I hoped for a different world order that is determined by the intrinsic values of interdependence, impermanence and wisdom. Only tough choices and tough decisions will testify our conviction and sincerity in GNH. Was I idealising? Maybe?

Source: Kuenselonline

Ministry of health of Bhutan to recover Nu 70-80 million worth of partial

The ministry of health is exploring means to recover Nu 70-80 million worth of partial, defective and non-supplied medical equipment from its two suppliers based in India.

A committee of six officials was formed after the Anti Corruption Commission (ACC) recommended the ministry to study the government of India-funded supply of medical equipment.

The committee members visited three referral hospitals, 21 district hospitals and 18 grade-I basic health units from January to March, to review the equipment, and made a presentation to the ministry on April 5.

A member of the committee said the health ministry received about Nu 300M in 2007 to buy medical equipment for the referral hospitals in Thimphu and Mongar; and ACC, after reviewing the procurement of medical equipment, recommended the ministry to study the procurement procedure, and put in place an internal control mechanism to make it transparent and accountable. “Of the Nu 300M, Nu 200M was for JDWNRH and Nu 100M was for Mongar regional hospital,” he said.

The official also said that the ministry is exploring means to make the two suppliers supply all the equipment.

Citing an example, officials said the Thimphu national referral hospital and Mongar regional referral hospital received only six operation theatre lights of the 12 ordered. The official said that the health ministry had to recover the other six OT lights. “There are defective and partial equipment supply in physiotherapy and pediatrics department also,” he said. “We have to recover that too.”

But, with the two suppliers refusing to respond to calls and messages, the ministry is planning to send a team to talk and solve the problem.

“The two suppliers were frightened after ACC arrested and detained them,” an official said, adding, “We should have first recovered the supplies and then taken appropriate action.”

The committee also pointed out that there were inefficiencies in drugs procurement and supply division. “We streamlined the whole process to make it transparent,” an official said.

BHUs and district hospitals would now maintain an equipment inventory register, a log book to record how many times a particular equipment had been used and the problems it gives.

Unlike in the past, where the ministry decided and procured medical equipment for all hospitals, the district hospitals would identify, specify and quantify the health equipment needed in the particular district hospital and BHUs. “This is a major change in the procurement system that would save a lot of government budget,” an official said.

A committee member said the finding indicated that there is inefficiency at various levels in health system, but corruption is not institutionalised. “Those who have accused the ministry of institutionalised corruption, should be able to prove it,” the committee’s chairman, Dr Ugyen Dophu, said.

He said a few individuals are corrupted and they have been charged by ACC. “A few might be caught again, but that doesn’t necessarily mean everyone in the ministry is corrupted.”

Source: Kuenselonling