Chencho, 58, recollects the arduous journey from Paro to Phuentsholing down the narrow meandering roads on a rickety Tata bus. It took at least seven hours, if the weather is clear and road is free of blockade. It was in the early 1990s.
Chencho said he heads to Jaigaon soon after reaching Phuentsholing. After a couple of days of shopping, sacks full of vegetables, groceries, toys, clothes, candies, would be ready to stock his small shop in Paro Tshongdue.
“We had tough time negotiating with the conductor and often land up quarreling on the hood of bus,” he said. “There were not many vehicles and we had to rely on buses.”
This was Chencho’s monthly routine. “Goods imported from Jaigaon sold like hot cakes. Bollywood postcards were the most popular,” he recalled. “But today people don’t even bother to look at goods from Jaigaon because they are easily accessible.”
Today, he said goods as far as far as the United States are coming into the country. Road, and air transport and telecommunication, he said improved people’s lives drastically.
Roads, according to the World Bank are the arteries through which the economy pulses. By linking producers to markets, workers to jobs, students to school, and the sick to hospitals, roads are vital to any development agenda.
Bhutan began its development journey with primary focus and investment on road. In the third plan, public works, primarily roads, continued to take a significant share (18 percent) of the Nu 475.2M development budget. This is a decrease from its 58.7 percent share in the first plan and its 34.9 percent share in the second plan.
As of June 2016, Bhutan has developed a road network of 11,177km. National Highways comprised of around 2,560 kms, dzongkhag roads of 1,504km and farm roads including power tiller tracks of 5,351km. Access roads and urban roads network comprised of 1,359km and 403km respectively.
By December 2017, Bhutan has built over 12,200km of motorable roads, more than double the 5,362 kilometres in 2008. Figures from the information communication ministry show that passenger transport is dominated by inter-dzongkhag bus and taxi services, comprising more than 50 percent of all trips on an average. The remaining consists of share of private vehicles and hitch-hiking.
It is also found that there is higher network for bus services with over 75 percent of the bus services originating from five locations – Thimphu, Phuentsholing, Gelephu, Samtse, and Tsirang.
Transport and economy
Trade accounts for more than 80 percent of Bhutan’s GDP. Almost all trade passes through the land borders with India.
Trading economics, a portal of economic indicators across the globe, estimates the contribution of transport sector to the GDP at Nu 6.5B in 2017.
However, the sector indirectly contributes to all other sectors including hydropower, tourism and industries. Thus investment in transport infrastructure has wider impact on the economy.
As the Bhutanese economy diversifies, there is demand for improved connectivity between villages, dzongkhags and towns. This includes air and rail connectivity, a road network for all purposes, postal and delivery systems.
While much progress has been made, transport issues are proving hurdle to efficient business. The absence of a well–managed and well-functioning transport and logistics industry in Bhutan adds to negative impact caused by the rugged topography and the difficulty of access due to the land locked nature of the country, and further increases transport costs and time.
The country’s trade suffers from the typical problems like excessive delays through ports, inefficiencies at land border crossings, limitations on routes for transit cargo and on the use of their own transport companies. The competitiveness of local products on foreign markets is further reduced by the high cost of transport within Bhutan. There is sole reliance on Kolkata Port and the Phuentsholing transit corridor for international trade.
For instance, a ADB study on connectivity pointed out that it takes about two to three months for a vehicle to be delivered to Bhutan from the date of placing an import order to South Korea. An importers pays about USD 1,289, excluding the taxes to complete the procedures and transportation.
Even transpiration cost within the country is comparatively higher. For instance, the Koufuko international, a DHI company is struggling to come out of the red with high transportation cost from Trashigang to Thimphu.
While Public transportation is also an issue in rural areas, private vehicles have grown at a rapid pace, from nearly 12,000 in 1990 to over 100,000 by 2019, clearly demonstrating the rising motorisation trend in Bhutan.
However, 88 percent of these vehicles are registered in Thimphu and Phuentsholing region. The national transport strategy stated that Thimphu alone will account for over 30 percent of the urban population base. To accommodate this population, it will trigger development need of additional 50-60 km of road network above the current network of 250 km.
The growing number of vehicle is also a concern, not only from the traffic and infrastructure need but also on the trade balance. About 20 new vehicles on an average are imported into the country everyday since 2015.
The import of vehicle has led to the foreign currency outflow of at least Nu 6B every year since 2015, after the ban on import were lifted. Consequently, the import of fuel is offsetting the hydropower earning. Transport loan has also nearly quadrupled from Nu 2.3B in 2014 to almost Nu 7B in March this year.
Cost to maintain the road also accounts for 10 to 20 percent of the public expenditures for the government.
A study pointed out that the average cost of routine maintenance per kilometre in Bhutan is higher than in other comparable mountainous countries. Because of the relatively low quality of construction, the average service life of pavements is short despite low traffic volumes.