Back in 2008, when 10,000 MW by 2020 was announced it was seen as a huge economic step, that once completed, would make Bhutan self sufficient for all times to come.
Even today, there can be no doubt that the strongest sector for earning huge government revenues is hydropower, and there is no other sector of the economy coming even close to it.
However, there is an increasing realization that constructing hydropower projects in Bhutan is not as simple as it sounds anymore. There is also greater awareness on the various impacts of the projects.
The discussion and debate in the Parliament, among political parties, media and ordinary citizens on various facets of hydropower, looking at both the good and bad sides, is a welcome development.
There is increasing concern on the huge debts being accumulated by the projects, cost escalation and its cumulative impact on Bhutan. The impact of hydropower construction on flaring the rupee and credit crisis is well known.
Changes in the grant and loan portions in projects in favor of loans has also caused concern.
There are also questions on whether Bhutan is setting itself up for a ‘resource curse’ in focusing more on the projects and less on developing its people and other sectors. The limited employment potential of such projects doesn’t help.
The government has also not gone into what will happen to Bhutan’s loan commitments if one of its mega projects fail or is destroyed by a natural disaster.
The latest concern now coming out is if the Indian power market is really ‘unlimited’ as data shows that India has the potential to become power surplus on its own.
The government of the day must factor all of these concerns and more before taking bigger steps and also come up with remedial measures and policies.
It’s easy to get a loan unless you need it
Norman Ralph Augustine