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The irregularity of the hydropower sector

The findings of the Public Accounts Committee on unresolved irregularities are disturbing. There are still Nu 4.3 billion (B) worth of pending audit issues to be resolved.

What is even more disturbing is that a bulk of it is with the hydropower projects- the mega projects being built for the last several years. As of today, Nu 3.95B of the total pertains to the hydropower projects. The Royal Audit Authority and Comptroller and auditor general of India pointed out the irregularities. There are no higher authorities than RAA, at least in the country.

Audit observations are taken seriously, in many organisations. That includes minor observation worth a few thousands ngultrums. In most cases, people are made accountable and taken to task when audit issues are not resolved. Audits are followed by compliance auditing and people panic when the RAA come after them.

These make many wonder why billions of ngultrums in the hydropower sector are not accounted for. The hydropower sector is already under pressure. Given the repeated delays in constructing them and the escalating cost associated with the delays, sceptics are already questioning the mega investments in the sector.

The sector is also blamed for the ballooning external debt. Hydropower loans account for 94 percent of rupee debt and almost 70percent of the total outstanding external debt of Nu 172B as of March 2018.

Today, despite the expectation of Mangdechhu’s commissioning, the hydropower sector is making headlines for all the wrong reasons. It is not contributing to real growth despite bloating the GDP growth rate. The question on many minds is where are the jobs in the hydropower sector, what benefits are trickling down to the communities who lost land property and living with dust at the project sites.

Bhutanese are known for patience. Perhaps, the promise that returns from hydropower would take time and that the loans are self-liquidating have consoled them thus far. From the experience of building the Punatsangchhu projects, some are now getting impatient.

There is a call for diversifying the economy. It is getting louder and they have reasons to look beyond hydropower.

Building projects in fragile Bhutan is challenging. Therefore, people are convinced when setback from nature-like sliding slopes or unstable hills delay work.  They also understand the complexities of building mega projects. However, when the irregularities are related to excess payment, recruiting more than what is needed or unrealistic payment amounting to billions, people become suspicious.

All eyes are on the ongoing hydropower projects because there are expectations. Governments are counting on them for the Five-Year Plans. In fact, the wealth that Bhutan would make from the sale of hydropower is already counted even as we prepare to graduate from a least developed country status.

Our hydropower projects should not be looked to as a lucrative business to benefit a few people or contractors. We will keep building hydropower projects. It is clean energy. Building it should be as clean.

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