Construction of the Raidak-Lhamoizingkha National Highway is in full swing. Works began in October last year. About 10 kilometres of the formation cutting is complete and support structures for one of the two bridges are taking shape. But the construction company said work progress might slow down. The reason again, Rupee shortage. The impact was first felt when they ran out of fuel stock for running their machinery. For about two weeks last month, the works were stalled.
“We directly purchase from Damchen on cash basis or pay in advance for the stock. And when they send order to India they either have to pay through Indian currency cash or demand draft. But last time when banks stopped DD transactions the payments could not be made so there was no fuel supply from the suppliers,” said Sangay Dorji, Executive Director of the Construction Company.
As of now, they are managing through direct purchase from the Petroleum distributors in the country. The highway project also includes construction of two major bridges. For that, materials like sand and aggregates are bought from the neighbouring Indian town of Barbesa in West Bengal State. There are also some specialised laboratory testing equipment required for the Project, which are not available in the Bhutanese market. It has to be procured from India. So for all these purchases, Indian rupee is required.
“Last time when there was no supply of cement from Penden Cement, we had no stock maintained so cement had to be bought from India,” said Sangay Dorji.
If the Rupee problem does not improve, the company said their works will be affected. For now only 100 Indian laborers are employed for the formation cutting. But once it is complete there will be 500-600 Indian workers employed for the construction of permanent structures.
“Once those 500-600 workers are here, we will need full cash flow of Indian Currency (IC). Otherwise the labourers go back. We have a contract value of Nu. 425 million. Considering the procurement that we have to do from India, at least 50 percent of the contract value is required in IC. So the monthly breakdown of IC required is Nu. 8.1 million,” explains the Executive Director.
They have notified the Department of Roads about the situation a week ago. The Department said they will take up the matter with the Central Bank. Meanwhile, construction works are being carried out with hopes pinned on the response from the Central Bank. As per the contract, the construction is supposed to be complete by June 2014.
