In a move that will be welcomed by industrialists and investors, the government will start allocating plots in all or most of the four new planned Industrial Estates from July 2015 onwards.
The Minister for Economic Affairs Lyonpo Norbu Wangchuk said, “The government will finalize the Economic Development Policy by July 2015 so that after that we can start allocating plots for development to Industries in the Industrial Estates.”
He said that the government then expects the Industries or the businesses to start construction by the end of 2015 so that they can get their units ready by 2017 when the 720 MW Mangdechu project is expected to kick in followed later by the 1,200 MW Punatsangchu 1 project.
Hydro power from these projects would also help power the newly established industries in the Industrial Estates.
The EDP is the umbrella economic policy of the government which was developed by the previous government. The new government is making changes to it to ensure it falls in line with the economic policies and priorities of the new government.
The Minister said the EDP was important as it would establish the thrust areas and priority economic areas that the government wants to focus on or encourage.
He said broadly, the EDP would be in line with the clean, green and sustainable economy that Bhutan wants to promote. He said that highly polluting and toxic industries would not be allowed.
The FDI policy will also be revamped in line with the changes of the EDP according to the minister. The minister said that a lot of hard work would be required in the coming days and all stakeholders would be consulted.
Lyonpo pointed out that his ministry was already in the process of studying and improving these two policies.
In the case of FDI the first target for the ministry would be to formulate the policy in such a way that the so far dismal rate of FDI investment in Bhutan can significantly shoot up. The total FDI in Bhutan since the implementation of the policy since 2010 has been only around Nu 4 bn.
The new FDI would reduce red tape, bring down the minimum required investment levels to more realistic levels, make dividend repartition easier, make it easier for companies to close shop and more.
The MoEA Minister in an earlier interview said the first aim of the government in revamping the EDP would be to bring it in line with its own economic policies that focused on the five jewels of Hydropower, Agriculture, Tourism, Small and medium enterprises and Mining and the nine measures to strengthen the business environment and support the five jewels.
The nine measures focus on policy improvements, removing red tape and facilitating a good business environment, infrastructure expansion in roads, ICT and airports, import substitution and controlling inflation.
“It has been around four years since the policy has been implemented and it is time to see what the bottlenecks are and how EDP is facilitating the aspirations articulated in the policy and also weather these are the right aspirations,” the minister had said.
With Pasakha packed to the brim the new Industrial Estates being planned by the government are the Jigmeling (733 acres) in Sarpang, Dhamdum (349.06 acres) in Samtse, Bondeyma (110.34 acres) in Mongar and the Motanga (145.52 acres) project in Samdrup Jongkhar.
The total cost of developing basic infrastructure in the first three estates is around Nu 1.6 bn of which the government has secured around Nu 800 mn from the Government of India (GoI), to start developing the first three of the four estates. Additional funding will explored from GoI as work progresses. A senior official said, GoI officials had indicated they would give more support if Bhutan could first finish the Nu 800 mn given.
The fourth estate of Motanga will be developed by the government on its own funding.