ABSD gets 3-month extension

With no extra cost to the government

McKinsey Consultant 17 May, 2011 – McKinsey’s consultancy project of 23 months to see Bhutan through its accelerated socio-economic development is extended by three more months.

It will end in August.

The project, which took off in July 2009 was supposed to end by May this year.

Performance facilitation unit officials said the government approved the extension, after they realised some of the initiatives taken up under the project would take longer. The extension was not part of the contract when it was first signed.

The additional three months, however, does not mean extra cost to the government on the agreed consultancy fee of USD 9.1M or about Nu 432M.

“The extension was need-based and has no additional cost implication to the government,” the unit’s overall coordinator Tandin Wangchuk said.

In the next three months, McKinsey will be involved in implementing activities with the tourism, ICT, vocational education and tertiary education sectors.

“It’s to make sure that certain important things are completed before they leave, and to accommodate a smooth transition,” officials said.

McKinsey and Co were hired to bring in best practices from around the world, and form strategies for Bhutan to achieve its 10th plan targets sooner, and also provide on-ground support in translating ideas into action.

That McKinsey would be involved in the implementation of their recommendations was what set it apart from other consultants the government hired before.

“Which is why the extension,” unit officials said.

The unit head Thinley Namgay explained that, by implementation, it meant McKinsey would be involved in piloting some of their recommendations.

“Most sectors have carried forward the activities and McKinsey is now with those sectors, which are slightly complicated,” Thinley Namgay said.

Unlike in the beginning, today the number of McKinsey officials has dropped from five to three on the ground working with the Bhutanese.

An example they cited of the consultant’s involvement in the implementation was of the recently launched health help centre.

“They were actively involved until the health help centre was operational and now taken over by health,” officials said. “It’s not appropriate and realistic to expect them to implement their recommendations, because human resource and finance will still be with the government. It’s done jointly.”

Another reason that pushed the contract term further by three months was because the diagnostic phase for some sectors took longer than the three-month time the phase was allotted.

Diagnostic phase included analysing and understanding the real situation of the sector or industry, after which a blueprint of recommendations for specific sectors are made.

“Diagnostic phase took slightly longer than anticipated, so implementation was delayed,” Thinley Namgay said. “Some initiatives required bringing in more manpower, while tendering and procurement added to the delay.”

Although the contract ends in August, the whole accelerated development program, officials said, would continue until the end of the plan in 2013.

In keeping with the 10th plan targets, a total of 71 initiatives were taken across 10 sectors to improve public service delivery, generate 75,000 jobs and increase Bhutan’s gross domestic product.

“Today, three (four percent) of the 71 initiatives are overdue,” officials said. “Of the remaining 68 initiatives, five are complete, most of which required changes in policy, while the rest are on track.”

While no sector has completed all activities, a few completed ones are in the tourism sector and the construction sector, such as collaboration with engineering companies, and awarding construction and maintenance contract together.

The accelerated development initiative for the social sector includes providing critical public services, such as healthcare, school education, tertiary education, vocational training and government to citizen (G2C) services, cheaper, faster and at higher quality.

For the economic sector, like construction, tourism, culture industry, ICT and agriculture, the project will target to generate most of the 75,000 jobs.

By Sonam Pelden



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