The government will start work on the 145 acres Motanga Special Economic Zone in Samdrup Jongkhar by mid 2013.
Unlike Jigmeling the government will own and operate the SEZ as DHI Infra will pump in Nu 100 mn of the equity while the government will put in another Nu 100 million.
Since the project will require a minimum of Nu 380 million for developing the infrastructure the remaining Nu 180 mn may be taken as loans.
“The Nu 380 million will be the bare minimum ancillary and other works which will be done by the government after which land will be leased to interested industries,” said Karma Gayley, general manager of DHI Infra.
He said that Motanga will be used to mainly encourage domestic industries and also FDI investments on a case by case basis.
Motanga is expected to support some four to five heavy industries and other smaller and medium industries.
Most of the land there belonged to the government. There were only two private landowners who owned seven acres. One of them has accepted cash compensation while the other will be getting substitute land. The industrial estate is located next to a river.
Karma said that Motanga would also look at what type of industries could be developed looking at resources available in the Eastern Region
Bhutan’s second biggest industrial SEZ the 500 acres Dham Dhum according to many experts is full of potential. However, it is currently wading through some land acquisition and urban town planning encroachment issues.
Karma said that Dham Dhum had been delayed as the original site that had been identified by a World Bank report had been encroached on through town planning.
Another potential issue is that the Industrial estate required land from around 40 private landholders.
He acknowledged that Amochu was ‘way behind’ the other two industrial estates of Jigmeling and Motanga.
He also said that there was no financial commitment yet. There is also the issue of the relocation of a local prison and a local jersey breeding farm.
In order to address the issue of urban planning encroachment DHI Infra will be talking with the Ministry of Works and Human Settlement. Karma said that once this was addressed land acquisition should not be a big problem as people could either take part in land pooling or resettle.
Initially the World Bank consultancy report had said Dham Dhum had the advantage of being in a mineral rich area. The original report said that heavy mineral based industries should be the mainstay of the estate.
However, unlike the other SEZ areas Dham Dhum is only 2 to 3 km from the Samtse town.
The government came out with a much more detailed strategic assessment report on the estate which was presented to the cabinet. The report prepared by the NEC, GNHC and the Land Commission has planned wider geographic area over the next 20 years.
Local stakeholders were given several development and planning options of which they chose to make Dham Dhum an area to accommodate clean and light industries like Green Technology and Bio-Technology Industries. They also opted to make Dham Dhum a dry port to serve as the distribution hub servicing south-western, western and central Bhutan.
A challenge for the SEZ is the need of massive river protection works of two to three kilometers. At the time, it was estimated by the World Bank that Nu 3.1bn would be required for river protection works.
The development of estate itself was estimated at Nu 1.5 bn which would have gone up by now.
The World Bank report also calls for the development of an airport on a flat land east of Sipsu town. The plan is also to link Sipsu to the future railway link heading toward Rungpo in Sikkim, India. Along with a dry port, a railway terminal is also recommended at the Dham Dhum estate.