One of the main agendas of the Foreign Minister, Lyonpo Tandi Dorji during his recent trip to India was to try and find a solution to untangling the 2560 MW Sunkosh project which is currently stuck due differences between the two countries on the implementation modality.
Bhutan wants to implement it on the current shared management model with more improvements and reforms like an empowered executive committee full of technical and relevant experts.
India wants to do it under the Turnkey model where the entire project design and construction would be handed over to an Indian PSU with no Bhutanese involvement.
The negotiation teams of the two countries hit a dead end after several meetings with the last meeting being on October 21-22, 2019. In fact, both sides were unable to make any more progress and as a result the negotiation teams did not schedule any future meeting date.
The Foreign Minister’s visit seems to have been aimed to try and address the issue at the political level.
Lyonpo said, “There is some progress. I think both sides have agreed that we need to move beyond our last discussions. My discussion with them was not on technical details but to impress on each other that we should get this Sunkosh thing moving.”
“I have informed Lyonpo Loknath Sharma and we have asked our technical teams (of the two countries) that they should look at it with an open mind on both sides,” said Lyonpo.
“For us we feel that our model is the best and they think that it is not possible without their PSU model. So we are saying is there a middle path and I think this what both sides are looking at and so let’s try and get something in between and propose.”
Lyonpo said that on both sides there is a sense of urgency to get something done.
“From our side it is at the political level that we should get this done,” added Lyonpo.
The minister said that the Indian side is very willing to do the project and they understand Bhutan’s difficulties.
“We are also saying that we understand where you are coming from with such a big cost, commercial viability, etc. But we are saying that we need to find a solution and come to an agreement,” said Lyonpo.
The minister said that the project funding it is still 70 loan and 30 grant and the 70 loan will be guaranteed by India.
The negotiation team from Bhutan is normally led by the MoEA Secretary and has the Director of the Department Hydropower and Power Systems, DGPC MD and officers from MFA and MoF.
The team from the India side is the Joint Secretary North, Joint Secretary Hydro, Central Electricity Authority and Tehri Hydropower Development Corporation.
With the negotiation team unable to move forward the instruction from the political levels of both countries will give new impetus to try and work something out failing which it may have to be an entirely political decision between the two governments.
The Sunkosh project was originally part of the 10,000 MW by 2020 in 2008 but from 2009 itself there were financing concerns within India.
In 2014 the project was not even on the list of projects to be implemented. The former government pushed for Sunkosh and in 2015 and 2016 it was offered as Joint Venture project.
The former government insisted for it to be an Inter-Governmental model which was agreed to in 2017.
During Prime Minister Narendra Modi’s visit in August 2019 the joint statement of the two countries agreed to finalize the implementation modalities for the Project at the earliest to enable commencement of construction but the differences over the modality persisted.
Sunkosh would be the first reservoir project of Bhutan, and the largest project to date.