ABI and BCCI seek government’s intervention to salvage industries

ABI and BCCI seek government’s intervention to salvage industriesThe Association of Bhutanese Industries (ABI) and the Bhutan Chamber of Commerce and Industry (BCCI) are looking for an intervention from the government to prevent industries from crashing headlong into a recession.

The two institutions have submitted a letter to the government asking for some policy intervention. While several measures have been proposed, one that both the institutions emphasised was to remove the raise in electricity tariff that is scheduled July, this year.

A combination of several factors, both local and international, has been severely impacting the industries.

Association of Bhutanese Industries’ President, Sonam Tobgay said demand for industrial products has significantly dropped within the economy and in the global market.

He said as a result of a slowdown in the construction sector, demand for steel, Ferro alloy, cement, nails, stone aggregate, among others has also consequently dropped.

Ferro Silicon Industries recently suffered a huge setback when the Indian market was flooded with cheap Chinese steel products crowding out the Bhutanese products.

The Secretary General of the Chamber of Commerce and Industries, Phub Tshering said the industries in Bhutan are facing three issues. “One is the revision in electricity tariff, and the other is the unavailability of certain raw materials like coal and slump in global market”

He said, the BCCI has asked the government to look into the matter and remove the revision that is scheduled July this year. He said the electricity tariff were revised, Bhutan’s industries would lose the competitive edge. “Of course the government took our request into consideration but again, the electricity act must be followed and the Bhutan electricity authority is an independent body”

Should the current trend continue and the electricity tariff is revised, industries are likely to suffer huge losses, he said, and it will have wide ranging implications across the economy.

“All the industries are either financed by a bank or a consortium of banks, if the industries go in the red, it will affect their repayment, and the banks will be affected, if the banks are affected, it will have implications across the economy,” said Phub Tshering.

The government should either look at amending the electricity act and the current electricity-pricing model or remove the revision in July, the secretary general said.

 

 

 

 

 

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