The former Minister for Economic Affairs and the current Education Minister Lyonpo Norbu Wangchuk during the monthly meet the press session said that Bhutan’s hydro projects will not be affected by a power surplus and falling tariff rates in India.
India’s main electricity regulator the Central Electricity Authority (CEA) had announced recently that India would have an 8.8 percent power surplus in the 2017-18 fiscal year.
Lyonpo said that while the CEA has announced the surplus it based on the supply and demand of power distribution companies. He said that India has projected for its economy to grow by 8 percent for several years and so if that is the ambition then there would be demand from grass roots manufacturers.
He said that the main reason for not worrying was that Bhutan’s projects are covered under a bilateral agreement between Bhutan and India whereby all surplus power would be bought from Bhutan.
Lyonpo also pointed out that tariff with India is worked out on a cost plus basis along with an assured return of 15.5 percent.
The minister said that Bhutan was therefore not worried about the power market and tariff rates.
In terms of focusing beyond hydropower and the need to diversify the economy the minister said that revenue from the hydro projects had been invested in other four jewels like agriculture, tourism, mining and cottage and small industries.
He said there has been tremendous development in agriculture. “When we came in local vegetables were available for only three months a year but now they are available nine months of the year and there have been other various developments in areas like farm mechanization and many others,” said the minister.
He said tourism is booming and there has been growth over the years not only in tourists but also hotels, guides and etc.
Lyonpo pointed out that the number of small and cottage industries licenses had doubled due to the various efforts of the government.
The minister said that the effort with hydropower was also to use it to create an eco system around it for our own manufacturing industries and the developments of various hydro related capacities like the runner repairs, training institute and the 40 year experience gained in the field.