A scan for business opportunities in the east unveils economic potential despite hurdles

A high level scanning was carried out by the Druk Holdings and Investment (DHI) to identify business and economic opportunities in eastern Bhutan.

The business opportunities identified are cement bonded particle board, Silicon Carbide, fruit processing,  gypsum-based value-added product, industrial township development and maintenance, maize processing (Industrial Starch), dolomite refractory bricks, autoclaved aerated concrete blocks, eco-tourism, and wood-based composite board (medium density board).

Among them, two of the ventures will be shortlisted for pre-feasibility and the concepts will be shared with the Bhutan Chamber of Commerce and Industry (BCCI) to filter down to the private sector.

“The aim of the project will be to generate employment opportunities in the eastern region and contribute to its socio-economic development, thereby also promoting equitable and balanced development in the country,” said the Senior Analyst of DHI, Jigme T Tshering.

The CEO of the DHI, Karma Yonten, said that DHI had pursued this scanning with an aim to get the private sector to collaborate with DHI under DHI-Private Sector Partnership (DPP) framework (which was launched in 2010) and if found feasible, it would be pursued by DHI alone or in partnership with the private sector under the DPP Framework.

“We need to be proactive and if these two projects take off, other opportunities will be looked into,” said Karma Yonten.

A few proposals have been received from the private sector till date.

The key reason for identifying the east as a possible economic center  is that it is close to the export markets, namely places like Samdrup Jongkhar and Pemagatshel  are close to India mainly towards the north-eastern region with access to markets like Assam and other north eastern states of India.

The other prospect seen was the availability of adequate power in the near future in the region from the hydropower projects like the Kholongchu at Trashiyangtse and Kuri-Gongri at Mongar (these two hydropower projects are under the 10,000 MW plan of the  government with Kholongchu Hydro Electric Project expected to be commissioned around 2016).

Other contributing reasons were the availability of adequate raw materials. According to the Department of Geology and Mines, dzongkhags in the east have significant mineral reserves.

Besides all this,  is the objective of enhancing road connectivity in the region and the improvement in infrastructure which include construction of the 64.3-km road connecting Nganglam with Gyelposhing that will enhance connectivity between Pemagatshel and Mongar and the double-laning of the 180-km highway linking Samdrup Jongkhar to Trashigang among others.

However, speaking on the constraints, the DHI team found that the level of industrial activity in the eastern region was relatively low and accounted for only 16% share of the total number of industrial units operating in Bhutan during 2009.

Jigme T Tshering pointed out undulated topography or hilly areas, which offered a limited availability of contiguous flat land for establishing an industrial cluster wherein a major industrial facility along with ancillary and other downstream units can be set up was a major constraint.

Other issues were inadequate infrastructure in terms of road connectivity, lack of enough power and poor access to large regional markets. With the exception of Samdrup Jongkhar and Pemagatshel dzongkhags sharing the boundary with the north eastern region of India, most of the other dzongkhags in the eastern region are far off from the markets. This is further exacerbated by the hilly terrain of the region resulting in high transportation costs, adversely impacting the advantage of the region for export of surplus products.

 

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