Kholongchhu project works on hold due to CBTE discussions with India: PM

During the question hour yesterday, Opposition Leader Dr. Pema Gyamtsho from Chhoekhor Tang Constituency solicited explanations from the Prime Minister on the government’s failure to start a single mega hydropower projects during the party’s tenure.

“The government has informed the parliament earlier that construction of Kholongchhu Hydropower had started. However, it was revealed recently that even the concessional agreement has not been awarded thus far. This means that this government will not be able to start a single mega hydropower project. Can the Prime Minister explain to the House on the failure to do so and what are the future plans on hydro project?” the Opposition Leader asked.

Lyonchhen Dasho Tshering Tobgay clarified that the works for Kholongchhu Hydropower project and Nyera Amari Hydroelectric Project which is expected to greatly benefit the people of eastern dzongkhags have already started.

“On the Kholongchhu project, 34 kilometers of road has been cleared and two bridges are nearing completion from whence we can only start the major construction works for the project. To avoid unforeseen events like the PHPA I & II, conventional research works are underway and 740 drift tunnels has been cleared so far. We have also awarded the contract works to the Bhutan Power Corporation Limited worth Nu 511M and the designs for 200 housing units have been completed and we are ready to award it to the contractors,” said Lyonchhen Tshering Tobgay.

With the preconstruction works for the Kholongchhu Hydropower Project almost reaching completion, so far it cost the government around Nu.1.15 bn. The paperwork for the construction of power house, head race tunnel and dams are all ready since 2016, but Kholongchhu project is a Joint-Venture between the Government of India and the Royal Government of Bhutan, so Druk Green Power Corporation Limited (DGPC) and SGNAVL from the latter’s side are yet to sign a concessional agreement.

“We came close to signing the agreement, but with the introduction of India’s Cross Border Trade in Electricity (CBTE) regulations, we had to halt the works after realizing that it might affect our power exports in the future. Talks are still underway to come to a favorable settlement on both ends,” Lyonchhen said.

The CBTE guidelines of India released in 5th December 2016, though meant to govern electricity trade between India and its neighbors, had several disadvantages for Bhutan on setting of tariff rates beyond the government formula, access to India’s primary power market, type of hydropower investments and also a 51 percent Indian ownership in any power trading company among others.

Lyonchhen also said that although PHPA I & II and Mangdechhu have been initiated by the former government and should have reached completion by now, due to shortfall in carrying out proper research works, it greatly affected the progress of the projects. About 83 percent and 72 percent of works have been completed for the PHPA I & II respectively and 90 percent of works have been completed for Mangdechhu.

“With the aforementioned issues, if we hurry in initiating other hydro projects it might hamper the economy of the country. The stagnant economic growth few years back has been attributed to the unplanned and unbounded hydro projects by the experts,” said the PM.

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