Under the Covid-19 circumstances, some are grabbing the opportunity, others are having to dig deep into their pockets
Tshering Dorji has been working in the construction sector since early 2000s. After more than two decades, his experience has come handy.
For more than a year now, Tshering Dorji has been providing construction-related services like carpentry, flooring and plumbing in Thimphu, Paro and Phuentsholing. And he is known for timely delivery of services.
The Druk City Youth Services (DCYS) has employed 28 young people as electrician, plumbers and masons. They are paid a monthly salary ranging from Nu 8,000 to Nu 15,000.
After Covid-19, the number of people availing the services has increased. For example, when everything is pretty much at a standstill, DCYS gets a steady flow of clients asking for their services every day.
Tshering Dorji said that DCYS’ service charges were slightly higher than the Indian labourers because of living standards. “Thimphu is an expensive city,” he said.
For instance, DCYS charges about Nu 400 per square feet of flooring service. The market rate is Nu 360.
Tshering Dorji, however, said that there was miscommunication among service providers and consumers, compromising the quality of the services delivered which affected the image of Bhutanese workers in the sector. “The construction owners don’t trust our services and rather prefer foreign workers.”
In the future, he plans to recruit more skilled Bhutanese to diversify DCYS’ services. The country, he said, faced shortage of masons.
The construction owners, however, complain about hiked service charges by Bhutanese firms.
An owner of a building in Motithang that is just about half complete said that she was concerned about rising rates and sought support from the office of consumer protection and labour ministry.
“Labour ministry should look into such issues because by the end of this month the Covid-19 relief measures will end. There should be a uniform rate,” she said.
She also said that the service providers were untrained which could lead to quality compromise. “I think DCYS need more experience to carry out carpentry and other skilled works. They are also charging four times higher than the market rate.”
… import of luxury motor vehicles suspended
Yangchen C Rinzin
The payment for Company Income Tax (CIT) and Business Income Tax (BIT) for income year 2019 is deferred until December for tourism and related sectors as per the Comprehensive National Response to the Challenge of the Covid-19 Pandemic Phase II.
Other sectors have the option to pay the applicable CIT and BIT in installments by September if a sector cannot pay in one go.
In March the government deferred the filing for CIT and BIT 2019 until June 30.
Of the total 426 registered CIT payers, only 86 had filed tax returns as of March 26 while of the 40,267 registered BIT payers, only 21,342 have filed their tax returns.
As a fiscal measure, the government has also decided to waive the monthly rent and other charges for six additional months (July to December) for tourism-related business entities. This is applicable only to those entities leasing government property, as per the press release from the Prime Minister’s Office.
The deferment of electricity charges for industries will be extended until December and the demand charges will continue to be paid on the actual consumption basis. The demand charges otherwise are based on fixed payment.
Apart from the loan deferment and interest waiver, hotels that are used as quarantine facility will continue to receive electricity and free WiFi until September. There are 52 active quarantine centres with more than 800 people as of yesterday.
Based on the front loading of priority activities for the Financial Year (FY) 2020-2021, the government has decided to enhance capital budget outlay from Nu 27 billion to Nu 36 billion. This is expected to boost economic activity and sustain growth.
A total of Nu 4 billion has been approved over and above the budget for FY 2020-2021 to accelerate projects in the areas of tourism resilience, agriculture and Build Bhutan programme. It will be also used to improve farm roads.
The press release stated that the Procurement Rules and Regulations have been simplified with provisions for direct award of works, goods and services to expedite the implementation of activities of the 12FYP and Economic Contingency Plan.
The government will also issue Guidelines for Domestic Preference for Procurement of Goods 2020 with effective from July 1 to provide 10 percent domestic preference. This will also promote domestic products.
To ensure essential food and non-food items, the government will continue to provide support to Food Corporation of Bhutan to stock items.
The government has also decided to suspend the import of luxury motor vehicles and bikes where the value exceeds USD 40,000 and USD 10,000 or its equivalent.
This is to ensure adequate international reserve is maintained to cover the import of essential items for one year as per the Constitution.
Budget hotels to be affected
Yangchen C Rinzin
The hotel industry that has seen an explosion in recent years and directly dependent on tourism will be in for shake up with the Tourism Council of Bhutan relooking at the tourism policy.
The council, a government agency, has an objective – reacting, rethinking, and recovery post-Covid-19. The recovery post-Covid-19 is to look into tourism policy and make tourism efficient.
One of the many strategies, an important one, is to reinforce Bhutan as a high-end tourist destination and strictly implement the “high value, low volume” policy.
This means hotels, especially budget hotels, might have to rethink about their business modules post-Covid-19 because of the change in policy the government is looking into. Emphasising on Bhutan as a high-end destination would mean providing tourist with star-rated hotels and high-end tourists facilities.
Following the impact on the hotel industry and the loan interest waiver and loan payment coming to an end, hotels might have to look into strategies to survive.
The government is discussing with Royal Monetary Authority should the deferment continue, which is expected to be announced next week.
But Prime Minister Dr Lotay Tshering told Kuensel that it is important for hotels to relook into their business strategies and see if they still want to continue as a hotel or look for alternatives, for instance, converting to apartments.
Lyonchhen said Covid-19 has taught that there is a need for overall assessment of the hotel industry, as it is not sure when and how tourism will pick up. “Government cannot keep supporting them forever to pay the loan,” said Lyonchhen.
Meanwhile, the government will conduct a survey on hotels and loans hotels have availed to help government come up with a business strategy. The survey is expected to suggest why certain hotels are not viable and provide options on what these hotels can do.
Lyonchhen said that it was time Bhutan experience “high value, low volume” in real sense post-Covid-19.
“This means it should not be based on numbers of tourists visiting Bhutan like it is the current practice,” Lyonchhen said. “The current situation has made tourism sector, which includes hotels realise this gap and now Bhutan must raise the bar.”
Members of the Hotel and Restaurant Association of Bhutan (HRAB) agree that there is the need to relook how they define high-end tourists and how the government would reach out to them. Hoteliers expressed that government needs to work on the market to promote high-end tourists if it is serious about achieving this.
Many shared the government must come up with a clear strategy.
“How serious is the government with high value, low volume policy?” one said. “It’s time to make this policy a reality.”
In terms of infrastructure, we have 159 tourists hotels, 129 three star, 14 four star, 16 five star. In addition, we have 156 home stays and 665 budget hotels as per TCB’s record.
What’s left for budget hotels?
It is not only making the country a high-end tourist destination that could hit the budget hotels, but also the decision to levy sustainable development fund (SDF). A SDF of Nu 1,200 for regional tourists would be levied on the tourists visiting any dzongkhags.
Levying of SDF and tourism looking into high-end destination would mean reduction in coming of regional tourists. This would affect budget hotels, as the notion is that budget hotels have mushroomed over the years because of regional tourism. Tourists from India, Maldives, and Bangladesh are considered regional tourists as they were exempted from the SDF.
Increase in high-end tourists would mean increase in the paying capacity, which ultimately means hotels would have to provide the best services with standard facilities. However, the notion is that budget hotels do not have such standard facilities.
Lyonchhen told Kuensel that government must explain to the budget hotels and they must remodel their business. “We don’t have the right to say we don’t want budget hotels because of a new policy,” Lyonchhen said. “However, they must also realise the importance to make their hotels attractive enough to attract high-end tourists.”
HRAB members said that it would not be easy to change budget hotels overnight, but the government should be clear with their strategies instead of doing away with the hotels that are already established.
“If the government decides to do away with budget hotels, they must help us to sustain our business,” a hotel owner said.
Fear loan repayment as interest waiver comes to end
Yeshey Lhadon & Ugyen Penjore
It was the much-awaited day. After over two years of hard work, stress, numerous journeys to the border towns, banks and a few trips abroad, the property, a three-star hotel, was ready.
March 7, according to the astrologer, was a good day for consecration. Invitation cards were distributed, decorations were readied and monks were arranged. One of the Zhung Dratshang Lopons was to preside over the consecration. On the morning of March 6, everything fell apart.
Early morning on March 6, the proprietor, a woman in her late 40s, heard about the first Coronavirus case in Bhutan. She could have gone ahead with the consecration, but cancelled everything as news spread about the contact tracing.
The hotel, on the side of Thimphu-Babesa expressway is not yet operational. Yesterday, the proprietor was cleaning the attic to turn into her residence. If the pandemic had not reached Bhutan, the hotel would have seen large groups of tourists come and go. A car rally group had booked all the 41 rooms for three nights, March 27 to 29. Catering for about 70 heads for the next two days confirmed. In the same month, two marriage parties were scheduled at the hotel.
“Everything is ruined,” said the proprietor who requested not to name her or the property. “We can’t ask for more kidu. It is not fair on His Majesty The King or the government. I am worried,” she said.
To at least generate some money to pay the monthly instalment, the proprietor is planning to open the hotel to walk-in clients, offering a huge discount. “We will open the hotel to small gatherings and let all the rooms including the deluxe and suites at Nu 1,500 a night,” she said. At the end of July, she will have to pay about Nu 800,000 as the equated monthly instalment.
Not far from her hotel, two newly built hotels remain under lock and key. The proprietors couldn’t be contacted. The hotels were completed recently. A proprietor and his wife, who bought the property before the pandemic, Kuensel learnt, are in a retreat.
While the pandemic has hit the hotel industry hard, those who completed their hotels recently are the worst hit. The only guests some proprietors saw, after consecrating their hotel, were those sent for quarantine.
On the bank of the Olarongchu, the proprietor of Ugyen Hotel is lost for words when sharing his experience. “I worked blood, sweat and tears for five years in Australia to construct this hotel,” he said. Ugyen completed his hotel in December 2019. When he was ready to operationalize, the pandemic took away his business. “My hotel was booked for four months with some paying advance,” he said. “I almost collapsed. I spent several sleepless nights. I only worry about repayment.”
Ugyen has to pay Nu1.2 million at the end of three months. In February, he estimated a net profit of Nu 2.5 million by July. “Now I struggle with personal expenses. I celebrated the completion of my hotel too early.”
In the north of the city, Hotel Damisa that became operational in mid-January shares the same story. “Business is zero,” said Narayan Gurung, the General Manager. Damisa had confirmed reservations both from regional and dollar-paying tourists. “We had 70 percent reservations, but it’s all gone. Revenue generation is nil,” said the general manager.
Wang Villa at Changbandu had not opened the hotel gates since March after it was used, for once, as a quarantine facility. “New hotels are crashing,” said the proprietor, Dechen Yangzom. She is mulling converting it to office space and renting it out. “There’s zero earning and I have to keep paying utility bills, some of which are very expensive even with the hotel closed,” she said. She paid Nu 23, 000 as water bill and Nu 6,000 for (how many months). “I feel like I got Coronavirus. This headache is ruining my life.”
Back on the expressway, the owner of Hotel Nana that was completed in March is already planning to sell his property built on 40-decimal land. The 40-room hotel has never received a guest. It remained closed today.
All eyes on the government
With the three- month EMI waiver and loan deferment coming to an end this month, hoteliers are worried what will happen to their properties. All are waiting and praying that the government extends the grace period.
“It would be helpful if the government could defer loan repayment till the hotel business picks up again,” said Hotel Nana’s owner, Krishna Bahadur Kharka who owes a bank Nu90 million.
There is no other alternative to pay, according to Ugyen Hotel’s Ugyen Dorji. “I’m apprehensive of what will happen. The worst is banks seizing our property,” he said. Some are suggesting deferring the repayment without penalties for a few more months even if interest is not waived. “We could make up when business returns,” said one.
Another proprietor is confident that the government will look into something so that the hotel industry does not crash. “Our capable leaders will show us a path. We can only pray the pandemic gets over soon,” she said. “The last interest waiver and deferment was for all the people who borrowed from the banks. The government could consider the worst affected businesses like hotels and the tourism industry.”
Budget hotels benefiting the most
With no alternatives, hoteliers are banking on the 21-day mandatory quarantine rule to keep their businesses afloat.
The government pays Nu 1,000 to Nu 2,500 to hoteliers who offered their property as quarantine centres based on hotel categories. The amount is inclusive of three meals a day and utilities such as Wi-Fi, electricity and water, among others.
There is a rush.
Cabinet secretary, Sangay Duba, who heads the quarantine facility protocol, said that with the increase in requests from hoteliers, the team has started using facilities on a rotational basis specified by the health ministry.
However, during the initial phase, he said that not many came forward except for a few volunteers. “Many didn’t know that Covid-19 would prolong and stay this long. Without any business, they are now coming forward.”
The government has so far spent over Nu 1.32 billion to hoteliers where over 8,500 people were quarantined upon their arrival from overseas or India. Almost 200 hotels across the country have been identified as quarantine centres, majority are in Thimphu and Paro.
Sangay Duba said that with over 800 people still utilising the facilities across 52 centres and more people coming in, the expenditure would increase in the following months.
Are hoteliers making profits?
As the prospect of business picking up remains remote in the light of the current pandemic, the nominal support from the government is what many hoteliers are counting on.
Requesting anonymity, a Thimphu-based hotelier said that the support from the government was enough to pay staff salaries and provide the specified amenities to those in quarantine.
Three days after the inauguration, one hotel owner had to close business due to the Covid-19 pandemic. Instead of closing the newly opened three-star hotel, she decided to provide the facility as a quarantine centre. She was one of the first to do so.
“The hotel was going to be closed so we decided we can let the government use it. This was the least we could do to support the country during the difficult times,” she said. The Nu 1,200 for single occupancy and Nu 2,000 for double, she said, was enough to cover the expenses even after including meat on the menu.
One of the first proprietors to offer his facility as a quarantine centre in Paro, Karma Jigme of Tashi Namgay Resort said the amount provided by the government was just for the food and other utility bills. “I hosted people on two occasions and almost 90 percent of my rooms were occupied. The amount was barely enough to pay for groceries, vegetables, salaries and utility bills.”
Karma Jigme said that even with the electricity and Wi-Fi concessions, there were other expenses when the facility was running. “Even when there are no guests, the hotel needs to be regularly maintained adding to the expenses.”
He said that there was no profit from the money paid by the government. Normally, the hotel operates at 100 percent occupancy during peak tourist season and at about 50 percent occupancy during off seasons.
A regular room charge at his three-star hotel is Nu 5,000 (twin sharing) with two meals per day subjected to 20 percent tax. “So there is no question of making profit at this rate,” he said.
Hoteliers shared that making profit from the government approved rates was possible mainly from the food. Although there is a prescribed menu for quarantine centres, there are hotels that don’t adhere to the recommended menu.
Secretary Sangay Duba said that in some isolated cases there were a few hotels that did not provide the items as per the requirement. He said budget hotels especially those in Phuentsholing benefited from the government support, as many commodities were slightly cheaper there.
Most hotels, especially the budget hotels, did not have full occupancy even when tourism was flourishing. Now with almost 100 percent occupancy in these facilities and some getting more than one group of quarantine people, the revenue generations for these hotels are expected to increase.
Also it was learnt that the regular rate of some of these budget hotels are lower than Nu 1,000 per day.
There are also some hotels beside budget hotels that possibly profit from the quarantine money.
For instance, a three-star hotel with 20 rooms charges around Nu 3,500 for a night. Most of these hotels offer a complimentary breakfast.
With 100 percent occupancy, a week-long stay at the facility would earn the hotelier about Nu 490,000. The same hotel operating as a quarantine centre at Nu 1,200 (minimum) for 21 days still earns more than Nu 500,000. For twin sharing rooms, the hotel would make around Nu 840,000 in 21 days.
While the debate of hotels making profit from the quarantine centres is subjective to operational methods, hoteliers said there is definitely a negative branding once a hotel is identified as a quarantine centre.
One Thimphu-based hotelier said, “The reason I don’t want to give away my identification and hotel’s name is because there is a strong social stigma from local residents.”
He said that people fear walking near the facility once they know it has been or is currently used as a quarantine facility. “Our intention was simple, to help the government in our own small ways but such an impression would have a negative impact on the business in future.”
Another hotelier said that while the government has pumped in a lot of money for quarantine centers, without the goodwill of the hoteliers, the expenses would have doubled by now.
“We offered our furnished facilities to be used as quarantine centres voluntarily. It was noble on the part of the government to provide us with a nominal amount for which we are grateful,” he said. “But if it wasn’t for these hoteliers, there could have been possible community transmission by now since most of the positive cases are from these centres.”
At present, he said that without business, many hoteliers are turning to the government for support. “The government has provided their support, to the best of their ability. It is time the public also provide similar support to the hotel industry.”
What will happen to us? This is the question on the minds of most hoteliers today with the loan interest waiver and loan repayment deferment coming to an end this month.
While the big and the well established can absorb the shock sent by the coronavirus wave, there are hundreds, even thousands, of hotels that are expecting another round of fiscal or monetary policies. Since March, there have been no tourists in the country. Newly completed hotels are waiting for their first guests. The old ones are competing for being a quarantine facility for the Nu 1,000 per day per person payment the government pays. This is how desperate the industry is today.
The Covid-19 pandemic has affected the hotel industry badly. But the writing was on the wall. Long before the coronavirus pandemic, concerns were raised on the explosion of hotels as the herd mentality led to a hotel building frenzy. In Thimphu, it is no exaggeration to say that a new hotel is completed every other month. Some are still building even after knowing the consequences.
Our policies are kind to the industry. Loans are cheaper, there are tax waivers for importing furnishings from as far as China and there are tax holidays. While some bankers are hoteliers, some hotels are built with foreign money.
As of September 2018, there were 105 star-rated hotels registered with the Tourism Council of Bhutan. This increased to 160 as of March. There are actually more budget hotels that are not declared besides the unknown number of private buildings and houses turned into hotels.
Meanwhile, places like Babesa, once paddy fields, are crowded with hotels, some remaining under lock and key since the pandemic hit the country. The promise for children’s park, community halls, solid waste disposal sites and many other amenities that convinced the once farmers of the locality to pool land and turn the village into an extended city are nowhere to be seen. Locals say that for every name of their once paddy fields, there is a hotel.
It is an irony that our policy makers had to be nudged by a pandemic to relook into the policy. It is late, but like we say, better than never. The government stepping in is a welcome and a bold decision.
The hotel and tourism business cannot be separated. If the government and the TCB are going to reinforce Bhutan as a high-end tourist destination and strictly implement the “high value, low volume” policy, the hotel industry will be forced to strategise.
The focus on the one-line policy emanated from the wisdom of The Fourth Druk Gyalpo has gone missing. This is evident from the low impact becoming high impact and mass tourism became the norm as the noble intentions were sabotaged by business and political interest. Mass tourism thrived and it led to the expansion of hotels.
When there are no tourists looking for cheap hotels, standards will have to be improved. The sustainable development fee of Nu 1,200 per person per day makes Bhutan expensive for regional tourists. However, it is not to say tourists from the region are cheap. There are groups, who stay in high-end hotels or come through tour agents. These groups are also among those complaining of Bhutan losing its exclusivity as they see and meet more of their folks at all tourist hotspots.
We need not crack our heads looking for a new policy. The “high value low volume” vision of the 1970s had become more relevant today. The vision was spelled out clearly, as a guide four decades ago, foreseeing the blunders we would make.
It is wiser to look for guidance in the vision and take tough decisions. Some hotels will have to close, some will upgrade and employees will have to find new jobs. The government can help them in the transition. It would be a suicide to repeat the mistakes.
This week, Kuensel news titled “Mines and Mineral Act to decide nationalization of resources” the Prime Minister said that he could nationalize the mines and minerals with “one stroke of a pen but he does not have the weapon to nationalize the resources as it will contradict the existing law. This statement is powerful and brings a fundamental question of the extent of the authority of the Executive. We know that the government issues numerous executive orders, circulars, notifications and has increased with the confirmation of Covid-19 in the country. Some of these orders included restrictions on people’s movement, restriction on the lawful trade and business, right to peaceful assembly or many other fundamental and legal rights.
Article 20 (8) of our Constitution defines the extent of the authority of the Executive where it states the “executive shall not issue an executive order, circular, rule or notification which is inconsistent with or shall have the effect of modifying, varying or superseding any provision of a law made by Parliament or a law in force.” This means every executive order, circular, rule of notification must be in line with the parliamentary act. Thus as a “ fundamental principle of law, and Executive Order may not contradict or supersede a statute or constitutional provision, and may not suspend, modify or revoke any statutory provision” enacted by our Parliament as it may infringe on the legislative authority or violation of the doctrine of separation of power.
Article 1 (13) of our constitution clearly defines the separation of power among the Executive, the Legislature, and the Judiciary. The “separation of powers provision serves the dual function of limiting the exercise of power within each branch yet ensuring the independent exercise of that power.” Only the legislature has the power to enact any legislation unless it conflicts with the constitution.
This concept is well interpreted in a landmark case of Youngstown Sheet & Tube Co. v. Sawyer in the United States. The Federal Supreme Court held that “when the President takes measures incompatible with the expressed or implied will of Congress, his power is at its lowest ebb, for then he can rely only upon his own constitutional powers minus any constitutional powers of Congress over the matter”. The doctrine of the separation of powers is not to “promote efficiency but to preclude the exercise of arbitrary power.” The separation of power is “not to avoid friction, but by means of the inevitable friction incident to the distribution of the governmental powers among three branches of the government to save the people from autocracy.” This is even more true that with the introduction of democracy, too much power to the executive can lead to pleasing the party loyalties and party interests. Such decisions of the executive will gradually become more binding than law and the political figures will become too powerful.
Bhutan as a young democracy has such vulnerability considering our entire Lhengye Zhungtshog constituted from a single political party. Foreseeing such vulnerability, our constitution framers have provided the clear limits of executive authority to protect the true democratic values and ensure checks and balances. The news of the government’s rejection on the nationalization of mines and minerals from the doctrine of separation of power and limits of the Executive Power in the recent news is welcome. Such wise thought of our Lhengye Zhungtshog must continue.
Disclaimer: The views expressed in this article are author’s own.
Rajesh Rai | Phuentsholing
After being severely hit by the Covid-19 pandemic in the peak season (March and April), residential buildings-turned-budget hotels in Phuentsholing have seen a slight surge in business this month.
Sonam Cheki, the owner of Thuenpa Puenzhi Hotel in Lower Market said that she had subleased seven of the hotel’s 12 rooms from May 20.
“This has been the most sensible option,” she said. Tenants are individuals Indians working in Phuentsholing.
Sonam Cheki also said that loan waiver helped her, as her owner waived 50 percent of the rent.
However, with the loan waiver period coming to an end, Sonam Cheki and others like her are worried.
Jigme Dorji of Khamzang Hotel said that loan waiver helped his business. But he is worried about what might the future hold.
“I have four staffs, all from across the border. We survived because of the loan waiver.”
Khamzang Hotel has 25 rooms but only three rooms are occupied on average daily these days.
Jigme Dorji said that he was getting some business only because about 80 percent of hotels in Phuentsholing were being used as quarantine facilities.
“The business has seen slight improvement this month,” he said.
Suman Gurung of Gaki Phunsum Hotel said she got reservation for only about two rooms in a week.
“I have reduced the rooms rates from Nu 1,200 to Nu 500 and from Nu 1,800 to Nu 900,” she said.
Gaki Phunsum has just five rooms.
Compared to the initial days of pandemic, the business was improving, Suman Gurung said. Many hoteliers expect that change of closing time from 7 pm to 9 pm help improve the hotel business.
She could not pay hotel rent for March, April, and May.
As per the trade office in Phuentsholing, there are more than 118 hoteliers in Phuentsholing. About 11 residential buildings were converted into hotels last year.
Gyem Sangay of Dogar Hotel said that although star hotels suffered more, initially, they got business by turning their facilities to quarantine centres but the budget hotels were suffering without clients.
From June 15, business started to improve slightly, he said. The hotel gets at least five registrations in a day.
Manager of a three star Gadhen Hotel, Ugyen Dorji, said that the business afloat only because the hotel was used as a quarantine centre.
“Otherwise, we would have zero earning,” he said.
Ugyen Dorji pays staff salaries from the working capital the banks have allowed.
Forty-one hotels have registered as quarantine facilities in Phuentsholing.
Owners say it would take time to get back to their normal business
Neten Dorji & Kelzang Wangchuk
Resorts and hotels in Trashigang have suspended operations, while budget hotels are running bare-bone operations.
There are more than 30 hotels and restaurants in Trashigang town and their business has plummeted since Covid-19 hit the country.
Lingkhar resort owner Deki Peldon said her staff are engaged in maintenance of the resort. “Now my resort almost became like a haunted place.”
Another hotelier, Kamala Rasaily said her hotel is running half capacity owing to physical distancing requirements.
Hotelier and restaurateur of Trashigang said with the government urging to reduced movements and people staying at home, not many customers are seen, unlike past.
Yangkhil hotel in Trashigang town is seen most of the time empty. “Without events happening around, operating hotel is challenging,” said its owner, who has not been able to pay rent since April.
With fewer customers, hotel menus have also shortened. Fewer items on the menu, hoteliers said, means fewer turnover.
“I am running the business all within my means to survive,” said Dechen Zangmo, hotel owner based in Trahiyangtse town.
“Almost three months, the usual bustling dining room of my hotel has been remaining silent,” she said. “Every time customers walk into the hotel it makes me emotional.”
“The months between February and April is the time we earn the most and do well in Trashiyangtse,” said the owner of Samphel Kuenjung hotel owner, Leki. “Without the movement of people and events, my revenue’s totally gone.”
He has negotiated with the landlord to pay a reduced rent of Nu 24,500 instead of Nu 35,000. “Landlord waived 30 percent of rent for three months which helped me to continue my business.”
Meanwhile, hoteliers in Samdrupjongkhar are worried about loan repayment now that the loan deferment and interest waiver ends this week.
The loan repayment, rental and staff salaries, among others are the common challenges for the hoteliers. Hotels remain open only that there are no customers.
Hoteliers said they have no other alternative income sources.
Maratika hotel’s proprietor, Pema Yangki, said that she was thinking of surrendering the hotel next month.
“I am worried about how I would repay the loan after June. I don’t see any opportunities,” she said.
TD guest house owner, Karma Tenzin, said the hoteliers would face problems in rental payment as most of the hotels in the thromde are on lease.
“It would help us if the concerned authorities or the government could extend the loan deferment.”
He said that the house owners have waived rental for certain percent, but it would be challenging for them to waive the rent because they would also have to pay loans. “The properties would get seized after a few months if we fail to pay the loan.”
Druk Mountain hotel proprietor, Lhuendrup Namgyel, said that staff salary, rent and loan repayment, among others are the common problems the hoteliers in the thromde face today.
“We hardly earn about Nu 1,000 a day today,” Lhuendup Namgyel said. “I have not paid rent for about four months.”
Hoteliers said that they were grateful to His Majesty The King for granting the loan deferment during such difficult times.
Hoteliers said that the only opportunities to revive their business were the opening the entry for the tourist.
“It would have helped us if the government had implemented the opening of the five entry points for the regional tourists right after the endorsement in the Assembly,” Karma Tenzin said.
With the reforms in environment clearance process endorsed on June 25, 17 environment clearance (EC) applications on hold at the National Environment Commission Secretariat (NECS) are expected to be approved at the soonest.
At the 53rd commission meeting, the commission introduced major reforms in the EC to ease the environment assessment process and ensure efficient and timely delivery of public services.
Major reforms are made to section 63 of the water regulation 2014 on groundwater abstraction and environmental standards 2010.
The section 63 states that groundwater abstraction may be considered permissible where there is no other alternative surface water source. However, the NEC officials said that the clause “…no other alternative surface water source” was often interpreted that the groundwater abstraction may be allowed only when there is no other alternative surface water source.
Moreover, in some areas all available surface water was not feasible or viable for purposes such as drinking and, therefore, the need for bore well water. To ensure clear interpretation in implementation of the provision, the clause is amended as: “The abstraction may be allowed where there is no other alternative viable water source”, which means that the water source should be convenient and cost-effective as compared to the alternative water source.
Out of the 17 unapproved ECs, 16 are related to groundwater abstraction.
The emission standard in the environmental standards 2010 was also amended. The emission standard includes standards for ambient air and water quality, point source emissions, work zone standard, and noise level limits.
The secretary of NECS, Sonam P Wangdi, said that with developmental activities on the rise and the changing nature of developmental projects, the current standard required revision. “There are loopholes in the old standards.”
The revised environmental standard 2020 has retained the existing parameters and incorporated missing parameters and new standards based on international best practices and limits.
New standards such as aluminium smelting unit, waste incineration, vehicle noise level limit and waste incinerator ash disposal or utilisation standards were proposed.
Emission standards are legal requirements governing pollutants released into the environment. It sets quantitative limit on the permissible amount of specific pollutants that may be released from specific sources over specific timeframes.
Other reforms include repealing clause 12 and 13 of Regulation for Environmental Clearance of Projects 2016, which requires the applicant to produce clearances from dzongkhag and thromde administrations and other relevant agencies.
The projects are classified into colour-coded lists—green, blue, and red—depending on their environmental impact and the need for EC. Majority of the applications received by the NECS within the red category are industrial projects.
To streamline the environmental assessment (EA) process and minimise the bureaucratic burden, the secretariat has formulated EA form for red category industrial projects.
Asked if the reforms would help solve the Shingkhar-Gorgan highway conundrum, Sonam P Wangdi said that it was not that NECS did not grant the EC as generally accused but the secretariat did not receive concrete zonation map of the Phrumsengla National Park from the forest department.
Denying the delayed Jigmeling Industrial Park caused due to delay in the issuance of environment clearances, Sonam P Wangdi said that between April last year and this month, NECS received 26 EC applicants from the industrial park out of which 15 was issued the EC. Seven did not register with the commission, and one project file was closed.
The remaining applications were under review, he said.
From 2017 till date, a total of 432 applications for EC were received—393 were issued and 36 applications are pending.
The timeframe for assessment and issuance of decision on EC is 180 average working days for applications under Environment Impact Assessment level and 45 average working days for applications under Initial Environment Examination level and applications for renewal.
Pork import ban remains due to swine flu concerns in India
The Ministry of Agriculture and Forests (MoAF) has lifted the ban on import of processed and packaged meat, fish and dry fish except pork with effect from June 22.
The decision comes at a time when Bhutanese farmers are unable to meet the meat demand. Meat shops opened a few days ago after a month-long Saga Dawa but most of them were empty as of yesterday.
However, import of raw meat will not be allowed. “Now we can import meat but they should be processed and packaged, not in the raw form,” Agriculture Minister Yeshey Penjor said.
“In the light of border management to prevent Covid-19, import of raw meat as before is not allowed.”
The buying and selling of local meat, however, is being allowed with proper adoption of preventive measures against Covid-19.
The importers should be registered with the Bhutan Agriculture and Food Regulatory Authority (BAFRA). The ministry has notified that wholesale importers would distribute to retail shopkeepers.
“In the interest of keeping everyone in business, we have asked wholesale importers not to sell directly in the local market. We have also asked retailers not to hike the price,” the minister said.
The government had imposed meat and fish import restrictions in the wake of Covid-19 since March 23.
Meat shops owners say they are waiting for imported meat to meet their customer demand.
Local suppliers and farm entrepreneurs are struggling to meet the demand. But the shortage would have been more severe if hotels were open.
Meat vendors in Thimphu are yet to receive supplies of imported meat.
“It’s very difficult to get supplies from farmers. They have hiked the prices of meat which has forced us to increase prices,” a meat vendor in Thimphu said.
Some customers shared their concerns about the price and quality of meat. A customer said she bought a layer chicken worth Nu 650 but later found out it was partly rotten.
Another customer said that the BAFRA should step up monitoring of the price and meat quality.
A 28-year-old restaurant operator in Changzamtog said that she was unable to offer meat items on the menu. “The meat vendor had some meat in his shop, but he said that it was reserved by some people,” she said.
The agriculture ministry wants to take the Covid-19 pandemic as a blessing in disguise. But one of the reasons for the inability to achieve self-sufficiency in meat is said to be the religious belief.
Last year, the country imported more than 12,102 metric tonnes of meat, worth Nu 1.134 billion, according to a recently released Renewable Natural Resources (RNR) annual statistics.
Businesses and individuals affected by the Covid-19 pandemic are anxious about what will happen after the loan deferment and interest waivers expire on June 30.
In view of the concern, the government is expected to announce programmes in continuation of the relief fiscal and monetary measures with changes. The government is expected to announce the details of the programmes in the coming week.
Dr Lotay Tshering at the meet the press yesterday said that the government and stakeholders were working on the way forward on the issue. “To be precise, work on fiscal measures is almost done and we will announce towards the end of the coming week,” he said.
The monetary and fiscal measures announced earlier in April were aimed at providing short-term relief to sectors facing financial distress in addition to assisting businesses.
President of Financial Institutions (FI) Association of Bhutan (FIAB), Karma, who coordinated the recommendations on part of FIs, was not available for comment. But chief executive officer of a bank said that details had been worked out and submitted to relevant authorities and the final decision was awaited.
It was learnt that banks have recommended for stopping the interest waivers. But financial institutions are said to be in favour of extending deferment of equated monthly instalment (EMI) by another three months.
Non-Performing Loans (NPL) is expected to worsen of extension of EMI deferment is not extended further.
FIs say that the interest waiver is not sustainable and that the government should resort to other measures. Banks are concerned about the implication of interest waivers on the economy.
In April, financial institutions and other financial service providers waived a total interest of Nu 1,251.93 million (M), which is borne on a 50/50 basis between the government and the lenders, according to the Royal Monetary Authority (RMA). The central bank is yet to announce the amount of waivers for May and June.
The biggest beneficiary was the housing sector that received about 25 percent (Nu 314.9M) of the total waiver. The interest waivers were provided on the command of His Majesty The King for three months.
Financial institutions made available short-term working capital loans to industries to import raw materials at the rate of 7.02 percent. The gestation period is until June 30.
The hotels and tour companies were also given access to loans at 5 percent as working capital.
The Supreme Court dismissed the appeal to transfer the Wamrong battery case to Thimphu dzongkhag court.
The order from the Supreme Court (SC) on June 25 stated that the hearing of the case would take place at Wamrong court by the Nganglam Drangpon.
On June 2, relatives of the alleged victim of Wamrong battery case had petitioned to the SC to transfer the case to Thimphu dzongkhag court.
The alleged victim had come to Thimphu for treatment and is living with her relatives.
Her CT scan, conducted at Mongar Regional Referral Hospital, revealed an impression of “break in the outer cortex of left lamina of C2 vertebra fracture and straightened cervical curvature, possibly due to muscle spasm.”
The alleged victim’s representative, Sonam Choden, submitted to the court that the alleged victim was bed ridden most of the time and had to continue her treatment. “If the case is heard at the Wamrong court, the victim will have to keep on travelling between Thimphu and Wamrong, which could cause her inconveniences besides financial burden,” the petition to the SC stated.
The order from the SC stated that according to Section 189 of the Civil and Criminal Procedure Code of Bhutan (CCPC) 2001, jurisdiction of a court to conduct trial in a criminal matter shall be where the crime occurred.
The letter of appeal from the victim also stated that there would be conflict of interest if the case was proceeded in Wamrong and she might not be able to get justice. The other reason was the lack of lawyer if the case is heard in Wamrong, the letter stated.
Section 32.1 A of CCPC 2001 states that during the miscellaneous hearing, the court shall make an initial determination whether sufficient legal cause exist to admit the case for proceedings according to the law.
The order from SC stated that since there is conflict of interest, and according to section 73 of CCPC 2001, “A case shall not be assigned to Drangpon who may have or be reasonably constructed of interests in the matter at hand.”
The order also stated that the trial proceeding and hearing should be conducted expeditiously as possible in accordance with procedure code to render just and fair justice.
The Wamrong battery case between the cleaner’s wife and drangpon’s wife happened in the evening of April 26.
The cleaner reported the case to police on April 27. The case was registered and forwarded to the drungkhag court on May 21.
Kelzang Wangchuk | Samdrupjongkhar
The government of Bhutan has no reason to stop the irrigation water for the farmers of Assam in India at this time.
The allegation against Bhutan from the Indian media is distressing and baseless, according to the foreign ministry’s press release.
“It is also a deliberate attempt by vested interests to spread misinformation and cause misunderstanding between the friendly people of Bhutan and Assam,” the press release stated.
As per the press release, the people of Baksa and Udalguri districts in Assam have been benefitting from the water sources in Bhutan for many decades and they continue to do so even during such difficult times when the people are faced with the Covid-19 pandemic.
It says understanding the difficulty the farmers in Assam are facing, the dzongkhag administration of Samdrupjongkhar had taken the initiative to maintain the irrigation channels to ensure the smooth flow of water to Assam.
“The heavy monsoon rains and sudden rise in the water levels are posing severe challenges, but the concerned authorities with heavy machinery are on standby to clear any blockage and channel the water whenever there is a problem,” the press release stated.
The press release also states that Bhutan and the dzongkhag authorities will make every effort to ensure the disruptions caused by the monsoon rains to the irrigation channels are addressed without delay and that there is water available for the farmers in Assam.
“We would also like to request for the understanding of the farmers in Assam as sometimes there could be few delays in the flow of water due to disruptions caused by the heavy monsoon rains and the operational difficulties arising from the restrictions put in place by both the countries because of the Covid-19,” the press release stated.
The dzongkhag administration had also written a clarification to the Baksa district commissioner on June 25.
Dzongdag Tharchin Lhendup said the people of Assam come to Samdrupjongkhar and carried out irrigation channel maintenance works before, but could not come this time after closing the border gates due to the Covid-19.
He said the heavy monsoon rains often washed the water channel away, but the dzongkhag, thromde, regional offices, business community, private sectors, forest department, Indo-Bhutan Friendship Association, and police, among others, cleared and carried out maintenance works to make sure the smooth flow of water to Assam recently.
Dzongdag said that the Bhutanese carried out maintenance works as and when the people of Assam informed the administration, adding that the dzongkhag told the outpost duties to report the matter. “It is crucial to construct a permanent water channel as the existing channel is not stable and located along the river bed.”
Thromde’s executive secretary, Tougay Choedup, said the thromde administration awarded the works to construct the permanent water channel recently but the works would begin after the monsoon, as it would be challenging.
He said that the Bhutanese side did not understand which side of the water channel the Assamese were talking about. “We always assure the continuous and smooth flow of water to Assam by carrying out maintenance and clearing works daily even during such difficult situations.”
The e-Library portal was formally handed over by the Center for Development of Advanced Computing (C-DAC) to the education ministry yesterday.
Ministry’s officiating secretary Karma Tshering said that the e-Library project marks a milestone in the Bhutan-India friendship.
The success of the portal was because of the tremendous effort of the C-DAC team and education ministry, he said.
The e-Library provides educational content in forms of e-books, audio, videos and images. The portal is established in 49 schools and 12 colleges across the country.
Karma Tshering said that the ministry would hereafter focus on content development. He said that apart from technicians managing the website, there should also be people managing the curriculum aspect of the portal.
“We have a great opportunity to use teachers to develop content aligning with the curriculum that we are delivering now in schools.”
To develop the portal’s human resource capacity additional staff would be recruited and trained. “The benefits from the portal may not come immediately, but it is certain there would be benefits in the long run.”
The project was supposed to be handed over last December.
Officials from the ministry said that the project’s handing-taking was delayed since the education ministry was not confident to take it over.
Royal Civil Service Commission (RCSC) issued notification this Tuesday that remote or work from home for civil servants is discontinued with immediate effect.
A private employee said that this means he would get faster service from government and other agencies.
“When government officials were working from home, a task which could be completed in a day would take a week,” he said.
The decision was made in line with the government’s recent directive to lift restrictions.
Bhutan Taxi Association’s chairperson Rinzin Wangchuk said that they were facing difficulties while availing e-services for renewal of licenses.
“It is easier when we visit the offices manually,” he said.
A civil servant said that public service delivery is hampered while officials were working from home. Colleagues who work in offices often felt pressured with numerous tasks to attend to.
The notification states that agencies may allow exceptions for mothers with children below the age of one year to work from home.
As a working mother of two primary students, Pema said that she will drop her children at her sister’s place when she goes to work.
Tshokey Dema, a mother of 8-year-old said that she was concerned that her daughter would be left unsupervised as she returns to work.
RCSC stated that with proper working modalities in place, agencies could allow flexi-work timings for parents with children in primary schools.
Nima | Gelephu
Once the 11 hotel constructions are completed, Gelephu thromde would have 48 hotel service providers, mostly driven by government conferences held in winter.
There are 37 hotels including a three-star hotel in Gelephu today.
Hotel owners said the business is dependent on conferences, local visitors, and few guests from the nearby Indian state of Assam.
The new hoteliers coming into the business is also focused on domestic customers. There are no new major economic or institutional establishments and tourist attractions that would support high-end hotel services.
Dorji from Gelephu said he planned to construct a hotel as the government was planning to open tourism in the southern belt. “However, there are no proper tourism spots that would attract high-end tourists,” he said.
He said that the conditions are not favourable for the hoteliers to focus on building star hotels. “We hardly see any tourist here. Unlike other parts of the country there are no sacred sites to attract visitors,” said Dorji.
There is a need for the government to focus on developing tourist sites and harmonise certain policies that are adversely affecting the growth of the hospitality sector.
With the limited number of tourists visiting the dzongkhag, the lone three-star hotel, Kuku Grand is hosting conferences, local customers visitors, and regional tourists.
Its owner Sonam Kuku said government building apartments and conference halls are affecting the business. “Now most conferences are done in government offices,” she said.
The hoteliers said that it would take at least five years for the business to improve.
“It’d be difficult for star hotels to sustain without major decisions or plans to support ongoing hotel construction and change in policies,” Sonam Kuku said.
The hotel received tourists from some tourism activities like bird watching and river rafting in Zhemgang and neighbouring dzongkhags.
Sarpang received the least number of tourists along with Pemagatshel, Tsirang, and Dagana last year.
The existing number of hotels in Gelephu could hardly cater to 200 guests from within the country, especially when bigger conferences happen.
An official from Yuljung Guesthouse said the increase in the number of hotels would improve services because of increased competition.
“Space is better here and the weather in winter favourable,” he said.
The officials from thromde said the construction growth is taking place at an unexpected rate. “However, it’s worrying to learn about no plans and projects coming up to support the current development. Most constructions would complete within two years,” said the official.
The existing economic and institutional establishments are small and most of them were related to service industries.
“Industrial service centre is related to day-to-day services. Industrial Estate has its own space for development. These limited establishments around the vicinity would make the least impact for the thromde,” he said.
Gelephu Thrompon Tikaram Kafley said, “The thromde is also a gateway to India. We have industrial service centre and Jigmeling industrial estate, Gyalsung project, and Maokhola bridge coming up. These are factors leading to development.”
Most plot owners of the thromde are civil servants nearing retirement and ex-armed personnel. Gelephu later would be not only an economic hub but also an educated hub, the thrompon said.
He said once Jigmeling industrial estate starts to develop people working there would prefer to stay in Gelephu because of better services, safety, and facilities.
“Things should be dynamic now. Opportunities for engagement should be more. We need to prepare for the future,” the thrompon said.
Bhutan Football Federation (BFF) looks at starting the Bhutan Premier League (BPL) from August.
Prime Minister Dr Lotay Tshering said that tournaments were allowed but must be conducted without spectators. “Organisers need to be smart. As long as there is no crowding, they can play.”
BPL was supposed to begin after the Bhutan Super League season that completed on March 21.
BFF’s media and marketing officer, Phuntsho Wangdi, said that the tournament would be held closed-door with mandatory precautionary measures for the players and officials in the pitch.
As per the guidelines of the FIFA, players are prohibited from doing the handshake in the ground, spitting, and meeting other team members before the match.
Phuntsho Wangdi said that BFF would inform the clubs’ officials regarding the training schedule for the players before tournament. “Foreign players will not participate in the competition considering the impact of the pandemic.”
He said that the fixture would be drawn soon after discussion with the members of participating clubs.
For the BPL, FIFA and Asian Football Confederation provide the financial support that would address the financial incursion on the football clubs by the Covid-19. Moreover, local sponsors from the tournament help the club owners to support their players.
The champions of the BPL get a chance to take part in the AFC qualifiers match. BBF also selects the potential national players from this tournament.
Consisting of 10 professional teams, BPL is the top domestic football league in the country competing for more than five months every season.
Teams selected for the BPL from the 2020 Bhutan Super League were defending champions High Quality United FC, Paro United FC, Tensung FC, Druk Stars FC and BFF Academy Under-17.
Other top five teams who booked the spot for the tournament based on the performances of 2019 BPL season includes reigning champions Paro FC, Transport United FC, Thimphu City FC, Ugyen Academy FC, and BFF Academy Under-19.
For this season, the venues will be in Changlimithang, Woochu Sports Arena in Paro, and Ugyen Academy ground in Punakha.
However, if Tensung FC chooses to play the match at Wangduephodrang army ground, BFF would consider it, according to Phuntsho Wangdi.
Phub Dem | Haa and Paro
Ugyen’s homestay, the 200-year-old primaeval house, has been a magnet for dollar-paying tourists for the past several years. It’s a giant Bhutanese heritage house with a scenic view of Meri Puensum in Haa.
Ugyen and his wife Dolay renovated the house to start a farmhouse, the oldest homestay, in 2012.
The dzongkhag has only four three-star hotels.
Visitors prefer to experience local culture and cuisine, Ugyen said. “They prefer to stay at homestays because it allows for more informal interactions.”
With only around three months of the agricultural season and no alternate source of income, Ugyen ventured into the tourism sector to earn a modest income for his family.
Last year, Ugyen’s homestay hosted tourists all year except for a week or two in winter. “My homestay was packed all the time. Sometimes I had to send my guests to other homestays.”
Then the novel coronavirus struck. Countries began shutting down borders and the last of the tourists hurriedly packed their bags and left.
Within a few days, several bookings that had been made by both international and regional tourists were cancelled.
With the travel restriction on tourists, the travel circuit came to a staggering halt.
Normally, Haa receives more tourists during the Haa summer festival.
Ugyen said this year the peak season passed without any visitors.
When business was good, Ugyen’s family had leased their fields and had reduced yaks and livestock farming. The family earn well from the homestay.
Kinley Wangchuk, a cab driver who runs a homestay has been exploring alternatives to keep the family going. “I’m planning to start poultry farming. We have to survive somehow,” he says.
Kinley Wangchuk anticipated a profitable year due to major social events scheduled in Haa this year. “I had to cancel all the bookings.”
Such anecdotes of financial commotion are unprecedented in the travel and tourism sector.
Paro Penlop Dawa Penjor Heritage Farmhouse in Gaptey which is usually filled with the visitor is vacant today.
After seeing a huge potential in the tourism sector, the whole family engaged in the sector as tourist guides, drivers, and in taking care of the homestay.
The owner, Gado Tshering said: “Forget about international visitors, even locals do not visit. Before Covid-19, many locals came for hot stone baths.”
Homestay owners like Ugyen and Gado Tshering, not just earn for themselves but engage local mask dancers and dancers from drayangs and the village to entertain guests.
The homestays usually earn around Nu 700,000 at the most in a year.
Most homestay owners took loans to renovate their homes and to procure materials to refurbish the place as per the homestay guideline.
Ugyen said that he had to pay a monthly instalment of Nu 29,000. He is worried about the loan repayment as the deferment and instalment waiver end this week.
“I am processing another loan to buy some jersey cows and run a dairy farm to repay the homestay loan.”
Unlike other sectors, the homestays, he said was not receiving any relief fund. “A team came to monitor the situation but nothing has happened so far.”
Meanwhile, homestays in Haa are hopeful to see some local visitors during the Royal Flower Exhibition scheduled in August.
Of 149 homestays in the country, 20 are in Haa and 39 in Paro.
According to Tourism Monitor Report 2019, Paro received 60,706 visitors, the highest from among the dzongkhags and Haa received 5,751 visitors.
Nim Dorji | Trongsa
Priority safety over income, homestays in Bumthang have remained closed even to locals since the government issued restrictions on tourists in the wake of Covid-19 case.
Sherub Dema Farmhouse in Chhoekhor gewog stopped taking in local guests.
“If we allow the local guests, we have to report to the gewog.”
Villagers suspect the guests seeking accommodation are those who completed quarantine.
The farmhouse owner Karma Dolkar said with no tourist, the family is into vegetable farming. Around 900-1,000 tourists stay at her guest house and also a few locals every year.
Tshering Phuntsho runs Miserthang Farmhouse in Tang said, “We have stopped opening for locals with the fear of Covid-19 and started farming.”
The proprietor of Ura Bangba farmhouse, one of the oldest in the community, Tashi Wangmo said that being a single parent and to raise five children has become difficult after the business closed.
“We depend on the income we make from the farmhouse, now with no tourist, a single penny is generated,” she said. Every year her family earns around Nu 300,000.
There are six farmhouses in Ura and each of them has similar stories.
Others are doing community contract work.
“The little potato cultivated was dug out by the wild boars,” a farmhouse owner said.
Bumthang dzongkhag has 20 farmhouses.
Three houses in Korphu chiwog, Trongsa were identified as guesthouses last year but they are yet to receive any guest.