The dam site of the Punatsangchu II project

Coronavirus impacts all ongoing hydro projects

Two of the biggest economic projects under construction in Bhutan are the 1200 MW Punatsangchu I project at Nu 93.75 bn and the 1020 MW Punatsangchu II project at Nu 72.90 bn and both of them are impacted by both the outbreak of COVID-19 in Bhutan from 6th March and also the ongoing lockdown in India. Final discussions on the 600 MW Kholongchu project is also impacted.

Punatsangchu II

The P II MD Amresh Kumar said the restrictions due to the COVID-19 virus has impacted both manpower and supplies for his project which in turn has impacted work at the project site.

He said that a lot of the workers had gone home to celebrate Holi (9th March, 2020) but before they could come back, the first COVID-19 case was detected in Bhutan and with restrictions on cross-border movement they could not come back.

He said, “Right now we have around 2,700 people working at the site where as normally we have around 3,700 to 4,100 people working there. The immediate requirement is of 250 to 300 more people.”

He said that apart from manpower, the supply chain was also disrupted in terms of supplies coming to the project.

The MD said that a project requires a lot of components and even if one or two are missing then it can impact the entire work.

Giving examples, he said some equipment which had to come from Germany has not come in as well as some electro-mechanical equipment from BHEL, India in Bhopal is pending.

He said the supply chain has been impacted due to the lockdown in India as everything has been shut down there. The MD said that the hope is that since some restrictions were eased on industries from 20th April in India some goods can come in.

When asked if this delay would impact the completion date the MD said that their plan is to cover up for this delay during the normal times. He said that as of now the aim is to still deliver the first unit by July 2022.

The MD said that overall around 87 percent of the work was completed.

Punatsangchu I

In the case of the P I project the impact is not just on the work, but also on the decision making process since some major decisions on the laying of the dam on the right bank side and stabilization measures are pending.

The P I project MD NC Bansal said that there has been an impact. He said that though a lot of equipment are at the site there are certain items like electrodes, welding gear and others which are required and this list has been given to the government.

He also said that the P I site has around 1,000 workers working at the site and they are doing work on the dam and dam foundation currently.

The continuing delay in the P I project is due to the the weakness of the right bank with slides in July 2013, August 2016 and January 2019 which has continuously pushed up the cost and the completion date with the latest completion date being by 2025.

The big question for the P I project to move forward was on whether the remaining 15 to 20 meters depth to reach the rock foundation needs to be excavated for the dam location on right bank side or other measures need to be taken. Once this is decided, the final decision on strengthening the right bank itself can also be taken.

The overall consultant WAPCOS and the lead consultant for civil works CWC had recommended not excavating this 15 to 20 meter depth and instead driving concrete piles or pillars into the ground on which the right bank section of the dam can stand.

The Bhutanese side was not very convinced with this idea for the long term in the Technical Coordination Committee meeting (with members of both countries) and called for a review.

The National Hydro Power Corporation (NHPC) was called upon to do a third party review of the WAPCOS and CWC proposal. The NHPC in its preliminary study felt that driving piles under the right bank dam location will not be effective.

It, however, needed to do a more detailed study and get back with its findings and recommendations for an alternative to the TCC.

However, the lockdown in India starting from 25th March 2020 has impacted this as the NHPC consultants and staff do not come under essential staff or services in India and are hence unable to work.

The project officials from Bhutan have also not been able to officially communicate with their Indian counterparts.

The hope was that once the lockdown ended on 14th April things would progress for P I but this was again not possible as it was extended by two weeks to 3rd May.


The 600 MW Kholongchu Joint-Venture discussions have also been impacted as the project discussions were reaching a final stage before the project could start construction.

The hold up with the project was initially on market access for 30 percent of its power to be sold in the commercial market. India’s CBTE guidelines initially held this up but this was resolved last year.

The remaining issue was on the 70 percent of the power.

Initially, the Bhutanese side was insisting that it wants to bid out the remaining 70 percent of the power, but with this not making headway and the Indian market  not looking too good, the Bhutanese side, instead of adopting India’s CERC guidelines (which would push down tariff), want the next best thing which is to for for the current Inter-Governmental model like Mangdechu where both sides negotiate the tariff when the project is about to be completed.

The Bhutanese side had submitted its formulations and it was indicated to the JV partner SJVNL that this is a away out and so based on that there was hope that something would come out.

SJVNL and DGPC were told to agree and then come with a joint proposal to the board. SJVNL it has been found is also positive and wants to make returns but any proposal has to go to the two governments for a final decision.

The lockdown in India has impacted discussions on this final stage, which once resolved would mean that major works could start on this project.

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