Status of Punatsangchu I, II and Kholongchu Hydro power project

It has been thirteen years since the start of the Punatsangchu power project I, with an estimated initial estimated cost to be around Nu. 35.14 billion, and as of now expenditure has been around Nu.93.75 billion which is a total increase of Nu.58.6 from the estimated cost. Similarly, two years later, Punatsangchu II has been inaugurated with the expectations of the project to be Nu.67.77 billion but now it incurred Nu.72.9 billion.

The MP Passang Dorji of Bartsham-Shongphu Constituency raised a query to the Economic Minister about the status of Punatsangchu I and II and Kholongchu Hydro power project.

The Punatsangchu 1, project is at a standstill because, according to Lyonpo Loknath Sharma, there has been many inconveniences like floods, landslides etc. which incurred additional costs while building the dam. Around Nu 23 bn had been spent on building the dam alone. The dam building has been halted and a third party review has been conducted by consulting Australia and Germany using the Government fund upon which conclusion has been reached that there is no point in building dam as it will incur additional costs and only option is to build a barrage now.  As of now, nothing is certain and there are ongoing talks about the barrage as well as assessment of the project and what issues the project is likely to encounter. Lyonpo is hopeful the project will be completed in 2025.

Regarding Punatsangchu II, the project is 90 percent complete and the only issue encountered is lack of foreign labor workers due to COVID 19 situation. The project thought of hiring Bhutanese as workers, but due to huge number of people required (around 2000) and lack of experience and skilling and the astronomical time and expenses required to skill/train a Bhutanese in the field, the idea was eventually debunked and more efforts were put in to set up quarantine centers for the foreign workers.

As for Kholongchu , the project started since 2006 but no progress has been made whatsoever according to Lyonpo. The Concession Agreement of Kholongchu Hydroelectric Project was signed between the Ministry of Economic Affairs, Royal Government of Bhutan (RGoB), and the Kholongchu Hydro Energy Limited (KHEL) on 29th June 2020. The Agreement was signed through a Video Conference in the presence of (Dr.) S. Jaishankar, Minister of External Affairs, Government of India, and Lyonpo (Dr.) Tandi Dorji, Minister for Foreign Affairs, RGoB.

As of now, the Government plans to recommence the Kholongchu hydro project despite some setbacks. The project has three packages, namely HRT, Powerhouse and Dam. 20 percent of HRT contract has been signed by CDCL and remaining 80 percent by joint venture of Rigsar and an Indian contractor. As for powerhouse and dam, the Government is planning to get the contract signed and negotiate the terms with the Indian Contractor.

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