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dam-l South Asian Power Politics and Bhutan (fwd)
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From cwaterp@del3.vsnl.net.in Tue Feb 29 07:41:57 2000
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Date: Tue, 29 Feb 2000 18:07:01 +0530
From: Himanshu Thakkar <cwaterp@del3.vsnl.net.in>
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Subject: South Asian Power Politics and Bhutan
SOURCE: KATHMANDU POST, FEBRUARY 29, 2000
Bhutan’s mega power politics
By Rakesh Chhetri
The water resources, as the biggest source of the renewable energy,
have often been a source of
serious political disputes, tensions, conflicts, mutual mistrust and
suspicions among the neighbouring
nations. It has been often used as a political tool to derive political
concessions. Nature has endowed
abundant water resources to the Himalayan region. However, the sharing
of water resources has not
always been a smooth affair and an example of ‘best cooperation’
between the countries of the region,
be it in the case of India and Nepal or Bangladesh and India. Whereas
in case of Bhutan, the lack of
vision on the part of political leadership has delayed progress in the
development of water resources. If
politics is kept away, the Himalayan water resources will be a boon to
all countries of the region,
namely, Bangladesh, Bhutan, India and Nepal.
Bhutan’s safe and exploitable water resources potential are estimated
at 6000 MW out of a theoretical
potential of about 20,000 MW. Until 1996, except for the 336 MW Chuka
hydroelectricity project, there
were no meaningful cooperation between India and Bhutan in the
development of water resources. On
the other hand, there had been occasional irritants like ‘pricing
policy’ between the two countries on the
export of Bhutanese electricity to India. However, during last three
years, Bhutan-India cooperation on
development of water resources has taken a new turn.
Tala hydro: In the early eighties, the two new potential
hydroelectricity projects -- 1020 MW Tala
Hydroelectricity Project (THPC) and 500 MW Chuka II -- were identified
as two downstream
hydroelectricity projects of Chuka. The 1020 MW THPC was taken up for
implantation in 1996. It is
located in Tala, in the southern Bhutan, 60 km up from Phuntsholing,
the gateway to Bhutan. The THPC
has an installed capacity of 1,020 MW. It will feature a 91-meters dam,
a 22.25 kilometre long head
race tunnel and an underground power house complex at Tala village to
house 6 units of 170 MW
generators. The original cost for the THPC was estimated at Bhutanese
(Ngultrum) Nu 14.80 billion.
Ngultrum is at par with Indian rupees. The THPC is the biggest
Indo-Bhutan joint project. The project
cost is expected to increase at the time of its commissioning.
This project is entirely funded by the Government of India (GOI) by way
of grants and loan. India will
provide a 60 percent grant and 40 percent loan at 9 percent interest.
It will produce 3,962 million units
(MUs) of power in a "90 percent dependable year". The construction of
initial work on the dam, power
tunnel, power house complex and transmission system was started in
1998. It is targeted for
commissioning in the year 2004-2005. Bharat Heavy Electrical Limited of
India is the supplier of the
complete generating plant at a cost of Nu. 4,210 million.
Kurichu hydro: The second hydroelectricity project was planned and
implemented in quick
succession. The Kurichu hydro-power project is having an installed
capacity of 60 MW. However, the
project will first install 45 MW with three 15 MW generators and later
install the fourth generator. The
project is located in Gyepshing, Mongar in eastern Bhutan. The project
will generate 322 MUs in a "90
percent dependable year".
The cost of Kurichu project in the initial agreement was estimated at
Nu. 2,560 million and was revised
in 1994 to Nu. 2,860 million. The cost is further expected to rise by
the time it is completed in 2001. The
project is also being fully funded by the GOI. The GOI will provide 60
percent as a grant the and 40
percent as a loan at 10.75 percent interest. The pay-back period will
be mutually agreed upon. It is
expected to be commissioned by September, 2001. Exporting power from
this project is expensive due
to the high investment on distribution network. The National
Hydro-power Corporation of India is the
turn-key contractor of the project.
The Bhutanese Minister is the Chairman of the Board of Directors of all
hydroelectricity projects with
Indian contributions and comprise Indian and Bhutanese officials as
members. Due to lack of Bhutanese
technical personnel, practically all technical staff, including
Managing Directors and General Managers
of these projects are on deputation from the GOI.
Sunkosh: The Sunkosh Multipurpose Project (SMP) in southern Bhutan is
the biggest identified
hydroelectricity project of Bhutan. The Central Water Commission of
India (CWC) was retained as the
contractor to prepare a Detailed Project Report (DPR) on the project.
Accordingly, after three years’
study, the CWC submitted a 37 volume DPR on the SMP, to the Royal
Government of Bhutan (RGOB)
on December 30, 1997.
The SMP could be Bhutan’s largest hydroelectricity project. According
to the DPR, it would have an
installed capacity of 4,060 MW of power. The cost is estimated at a
mind boggling Nu 77.93 billion. The
cost could double in ten years. The SMP will be located at Karbari
village in Sarbhang district in
Southern Bhutan. The project would comprise two dams, the main one for
power generation and the
second to feed a 141 kilometres irrigation canal. Out of proposed 141
kilometres canal, only 13
kilometres of canal will be inside Bhutan while the rest will be in
India. However, Bangladesh also needs
to be involved in the canal project, as the Sunkosh flows down through
it. It would supply power to the
entire North-east and reach as far as Merrut in Uttar Pradesh state of
India. It would irrigate and supply
drinking water to the Indian states of West Bengal and Bihar. The
project is expected to take about 10
years to complete.
Mangdue Chu: Bhutan and Norway have signed agreement for cooperation on
Mangdue Chu
hydroelectric project. In August, 1997, Norway committed Nu. 95.5
million for the technical,
environmental, and economic feasibility study of the 265 MW Mangdue Chu
hydroelectric project in the
central region. The report will be ready soon.
Revenue: Hydroelectricity export has become the single most important
source of revenue for Bhutan.
It has even made Bhutan’s trade with India surplus by Nu 448.7 million
for the first time in 1996. The
export of Chuka electricity changed the trade balance scenario in
favour of Bhutan. As a consequence,
its overall balance of payment with India was surplus by Nu 79.59m
according to the Royal Monetary
Authority of Bhutan. It generated 1,972.18 million units (MUs) of
electricity in 1995-6. Its export to India
was to the tune of 1,564.04 MUs at a value of Nu 747.56 million. Since
India financed the entire cost of
Chuka hydel of about Nu three billion, it paid only 0.50 per unit until
1997. In 1998 the rate of power was
revised to Nu 1.00 per unit. Bhutan exports more than 80 percent of its
total generation of power to
India.
India’s need: India’s cooperation in developing Bhutan’s hydro-power
seems to be well beyond the
development cooperation. "It is time for Bhutan and India to look at
cooperation in hydro-power
development not merely as an exercise in bilateral goodwill but as a
commercial partnership," said
Indian Power Minister Kumarmangalam during his visit to Bhutan on
October 26-29, 1998. "India’s
pressing need for power, the affordability and reliability of
hydro-power over thermal power and Bhutan’s
potential to produce hydro-power were some of the reasons for
developing a commercial angle to the
bilateral hydro-power cooperation" he had said. Further, he had also
pointed out that "India is estimated
to be short of 30,000 MW of power... it is a ready consumer just across
the border by the time, the
1,020 MW Tala project is commissioned". The Joint Secretary (North) of
the Indian External Ministry,
Mrs Meera Shankar, on a visit to Thimphu, last week said that "outside
the Plan, power projects are
given high priority by the Indian government".
Bhutan-India relations as far as development of water resources is
concerned, is sailing smooth. As no
two sovereign nations could have a perfect tension-free relationship,
there are irritants in Bhutan-India
relations too. Despite India’s magnanimous and liberal economic
assistance to Bhutan, it is irony that
Bhutan is harbouring India’s outlawed separatist militants much to
India’s consternation -- even at the
cost of its own sovereignty. Whatever may be the political relations
between the two governments, the
Indian assistance in the monumental mega-projects like hydroelectricity
projects, road construction,
scholarship to the students as they directly benefit people) will make
every Bhutanese to look at India
with gratitude. India has been the major development partner and source
of economic aid to Bhutan,
long before it opened its doors to the outside world.