The multi-billion Punatsangchu I and II projects are now officially delayed from six months to two years due to the impact of COVID-19 due to the shortage of labour and the inability of experts to come to Bhutan.
The promising 1,020 MW Punatsangchu II project was supposed to be completed by June 2022 but the Minister of Economic Affairs said that it can now be confirmed that there will at least be a minimum delay of another six months which will push the project to December 2022 with the first unit commissioning by then and the other units following through in 2023.
However, even this is an optimistic and tight timeline and the minister said the delay may go up to an entire year into 2023.
Lyonpo Loknath said that the notional revenue generation at peak output for P II is Nu 49 mn per day. In other words, this is a notional loss of Nu 17 bn for every year of delay or Nu 8.5 bn notional loss for every six months of delay.
The latest project cost is Nu 89 bn with Nu 71 bn already being released with 90 percent of the works being completed.
P-II has been particularly hit by the shortage of workers given its active construction stage. Lyonpo said that the project needs 2,500 plus workers on the ground but right now they have only 1,000 workers of which around 400 plus are Bhutanese.
The minister said that when COVID-19 struck Bhutan a lot of workers had gone for festivals and they could not come back and then many of them still here opted to go back.
Lyonpo said another factor is also the issue of movement of goods and materials sometimes as cement industries were affected by the lockdown and a lot of materials from India was delayed due to COVID-19 restrictions and lockdowns.
He said with the shortage of workers certain works had to be suspended in certain parts.
Lyonpo said he has asked the project to plan and prepare to bring in the workers as the 1,000 bedded quarantine centers in the south near completion.
Lyonpo said the aim is to have all 2,500 required workers in the country by December 2021 brought in batches.
He said that there has already been a lot of delay since March 2020 and so the aim will be to get it done by December 2022 with only a six-month delay and if not then by 2023 with one year’s delay.
On Punatsangchu I the earlier schedule was to complete it by 2024 but Lyonpo said the target now is to finish it by 2025 or 2026 which a delay of one to two years.
He said the positive is that there are positive indications from the Government of India on Bhutan’s proposal to build a barrage instead of a dam at the site. He said the GoI is in fact in favour of this and their consultants will work on improving the barrage DPR being done by a private firm.
The minister said the barrage designs were supposed to be complete by June 2021 but due to the pandemic some rock experts from a sole firm of its kind in India were not able to come. He said what is also a factor is that with the monsoon the river is at a high level and so even if they come the river level has to subside.
There has to be an arrangement made to bring in these five to six experts and they can only be here by September. Lyonpo said if all goes to plan then they can give out the tender for the barrage by the end of this year which means that construction may take until 2025 to 2026.
He said the project is still a 1,200 MW project and will generate the same amount of power.
Lyonpo said the the only change is that P I cannot produce peaking power which is more power at certain points of the day by storing water behind it. However, this does not make any difference for Bhutan as Bhutan does not get any additional rates for peaking power.
The P I project has a cost of Nu 93.75 bn of which Nu 80.19 bn has been spent.