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Headrace tunnel of MHPA (file photo)
Headrace tunnel of MHPA (file photo)

Delays mire the power sector

The dog year pulled the curtain on Bhutan’s expectations from the hydropower sector.

While Mangdechhu was for the pig year to relish, that the two Punatshangchhu projects were not likely to be completed in the 12th Plan was made clear.

The delay in commissioning of the hydropower projects disrupted the GDP growth of the country and revenue projections. Had thing gone well, 85 percent of the country’s total expenditure would have been from domestic revenue. The realisation was just 62 percent, down from 65 percent in 2013.

Officials in the ministry of economic affairs even pleaded that it was unfair to judge their performance based on the performance of the hydropower projects, which was beyond their control but affected their annual performance targets.

Kholongchhu was put on halt and so was the entire JV projects, the agreements of which was already signed. This was because of the new guidelines the Indian government issued on cross border trade of electricity (CBTE) at the end of 2016.

The Druk Green Power stated that it had become extremely challenging to plan the investment and the way forward due to pronounced uncertainties after the issuance of CBTE guidelines. The CBTE restricted Bhutan’s or any other neighboring country’s access into regional energy market.

 

The CBTE guideline that India issued on December 5 destabilised the fate of country’s energy market. On Bhutan’s request, the government of India accepted to relook into some provisions of the guideline.

The good news came only after the new government took office with India relaxing some of the provisions to accommodate concerns raised by the Bhutanese authority.

But the dog year saw geological surprises at the Punatshangchhu continue. The target to commission the two projects at Punatshangchhu shifted to the end of 2022 and beginning of 2023.

However, Mangdechhu, despite missing four deadlines, was able to prepare for full operation by the beginning of the pig year.

The new government finalised the export tariff at Nu 4.12 a unit after negotiating with the government of India. The dog year concluded with the plugging of the diversion tunnel at the dam of Mangdechhu.

The highlight of the year, in the power sector, was the revision of Chukha power tariff by 30 Cheltrum a unit, resulting in an increase of Nu 482.1M in revenue. This flowed after the meeting between former prime minister and Indian Prime Minister Narendra Modi on the sidelines of the Advantage Assam Investors Summit in Guwahati on February 3.

For the local industries, the hydropower sector also saw a breakthrough moment when the CDCL began tunneling works and DGPC started developing software for the powerhouse in collaboration with foreign partners.

The Chhumey mini hydel was re-commissioned coinciding with the formal golden jubilee celebration of formal diplomatic relation between India and Bhutan. Similarly, a mini hydel was re-commissioned in the capital.

Tshering Dorji

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