Bhutan looks beyond India for hydropower business

The new service centre, BHSL once operational will cater to all hydropower projects in the country and beyond

Bhutan will gradually open-up partnership and investment doors to other international companies.

Earlier this month, Alstom and Druk Green Power Corporation (DGPC) announced that they will establish a state-of-the-art hydropower service centre, Bhutan Hydropower Services Limited (BHSL) in Jigmeling, Gelephu to provide repair services for hydro runners    and other underwater parts of hydropower plants.

Alstom, a global leader in power generation, power transmission and rail infrastructure is a French multinational company.

The agreement signed between Alstom and DGPC states: the partnership will be implemented as a joint venture with DGPC (51%) and Alstom (49%). The project cost is estimated to the tune of Nu 1094mn over a period of 27 months.

With 10 projects selected by Government of India (GoI) and the government of Bhutan for the development of 10,000 MW by 2020, BHSL is expected to strengthen the commitment and at the same time support the national drive for investment and employment.

BHSL will be the first of its kind in Bhutan which will cater to hydropower plants not only in Bhutan but also to the north-eastern regions of India.

Experts said the Bhutanese hydropower market currently fails to cater to the unemployment constraints in the country although it has been a main source of government revenue.

DGPC is a Nu 65bn company with 1,685 employees as of October, last year. Currently, Bhutan’s total installed hydropower generating capacity is 1,488 MW from four major hydropower plants and 23 minor plants, all maintained under DGPC.

DGPC’s director for projects Dorji P. Phuntshok said since the project (BHSL) is a new undertaking for DGPC and Bhutan, some skilled workers will be required to operate heavy and sophisticated machinery. Once operational  it will employ some 160 workers of which about eight foreign expatriates  will work for two years till the skills are transferred to local employees. “During the construction phase, 34 workers are expected to be employed of which four will be expatriates from Alstom,” said the director.

He said BHSL’s gross revenue is expected to increase from Nu 118mn in the first year of operation to more than Nu 500mn a year. However, expected proceeds from services that could be rendered to India’s north-eastern hydropower plants have been excluded in the projected revenue.

Currently, the underwater parts and machineries of Bhutan’s power plants are repaired at service centers in India and Nepal. The director cited time constraints and financial issues while sending the spare parts for repair. “Its not only expensive but time consuming as well and now there are some procedural difficulties also”, he said.

He cited a recent incident when two hydro runners sent for repair had been stuck for about two months in Jaigon, India due to  certain rules and regulations .

While BHSL provides employment opportunities, it will also be much cheaper, efficient and have a better quality control for servicing hydropower plants.

Bhutan is already involved in hydropower constructions with Canadian companies. SNC- Lavalin Inc (SNC), a Canadian company which is one of the leading engineering and construction groups in the world who has been associated DGPC with human resources and also in building the Dagachu project has formed a base in Bhutan since its first visit in 2010.

Bhutan’s partnerships and joint ventures with both Alstom and SNC are routed through their corporate offices in India.