The Public Accounts Committee presents the Performance Audit Report on the Operation of the Sate Mining Corporation Limited (SMCL)
The Chairperson of the Public Account Committee, Eminent Member of the National Council, Hon. Phungtsho Rapten presented the Committee’s Review Report on the Performance Audit on the Operations of the SMCL to the Joint Sitting of Parliament today.
The Performance Audit conducted by the Royal Audit Authority evaluates the operational efficiency and effectiveness of the SMCL, which has played a pivotal role in the mining sector since its inception in 2015.
During the joint sitting, members of parliament engaged in thorough deliberations on each of the points including, the background, observations, performance, and recommendations put forth by the Committee. The report highlighted several key areas for improvement, emphasizing the need for strategic alignment, operational efficiency, and enhanced compliance with health and safety standards.
The Committee's recommendations on the Performance Audit Report on the Operations of SMCL included:
The Government to carry out comprehensive mapping and prospecting of minerals in the country: The Government should expedite nationwide mineral resources mapping, exploration, and geo-scientific studies for all potential minerals in Bhutan. The Department of Geology and Mines (DGM) must be adequately staffed with competent technical human resources to effectively carry out these functions.
The Government to expedite construction of Dewathang - Nganglam Road: The Government should prioritize the construction of the Dewathang - Nganglam road, which would significantly reduce transportation costs and time for gypsum and coal, making domestic cement more competitive.
The Government to consider railway link to Pugli: The Government should consider establishing a railway link to Pugli to reduce transportation costs for dolomite exports, which currently rely heavily on truck and rail transport.
DGM, Ministry of Energy and Natural Resources (MoENR) to limit their scope to overseeing technical feasibility and reserve adequacy in FMFS: The Financial Management and Financial Sustainability (FMFS) sets annual targets for mineral production and sales. Since prospecting and mining are distinct activities, and the Department of Geology and Mines lacks business expertise, it is recommended that the DGM focus on the technical feasibility of mining sites and verifying mineral reserves, rather than assessing economic and business feasibility as outlined in the FMFS guidelines.
MoENR and SMCL to jointly carry out appropriate testing for air, water and dust population and structural and crop damages: The Ministry of Energy and Natural Resources (MoENR) and SMCL should collaborate with local governments to conduct appropriate testing for air, water, and dust pollution, as well as structural and crop damages attributed to mining activities.
The Government and SMCL to develop a long-term mining extension plan with a comprehensive land acquisition and resettlement strategy for affected communities: The Government and SMCL should develop a long-term mining extension plan that includes a comprehensive land acquisition and resettlement strategy for communities affected by mining operations, particularly in areas with projected long-term extraction.
SMCL to explore more markets and diversify its mineral products: SMCL should conduct a comprehensive market study to diversify its mineral products and explore markets beyond its traditional boundaries, investing in marketing strategies and high-value minerals to enhance profitability.
SMCL to develop HRD masterplan: SMCL's mission relies on skilled human capital, but despite workforce growth, there is a lack of expertise in key areas. With only Nu. 1.3 million spent annually on training, SMCL must develop an HRD master plan to bridge the skills gap. DHI should prioritize and invest accordingly.
The government to enhance the efficiency of online regulatory portals such as Bhutan Electronic Customs Management System (BECMS), Bhutan TradeFin Net (BTFN), and Bhutan Integrated Revenue Management System (BIRMS): The movement of goods and services across the border is currently hindered by inefficiencies in online portals, including frequent server downtime and internet issues, causing delays in clearance. It is recommended that the government improve the efficiency of these systems to facilitate seamless cross-border trade.
The Joint Sitting held a lengthy deliberation on the content of the report, and also on the Committee's recommendations. However, the House could deliberate on the first recommendation of the Committee only today. During the discussion on the first recommendation, which is about carrying out comprehensive mapping and prospecting of minerals in the country by the Government, the Minister for MoENR reported that the government had completed 59% of the mapping, and the remaining 41% will be completed by the end of the 13th FYP. The Joint Sitting will continue its deliberations on the Committee's recommendations tomorrow.
