Factory owners in Phuentshogling’s Damdara industrial area are calling for a deadline extension to relocate their factories to Dhamdum Industrial Park in Samtse. The Phuentshogling Thromde has set a relocation deadline for mid-next year. Worried about the time frame, business owners are planning to appeal to the prime minister. They are also asking for a freeze on the land lease rate, which was revised recently.
Nearly 30 manufacturing plants have been operating on government-leased land since 1983 in the area. They say relocating within the given time frame could severely impact their recovery from the pandemic.
While they remain committed to a smooth transition, factory owners say, most of them are still in the recovery phase, working towards full stabilisation after the pandemic. They added that the relocation order has come at a time when loan deferments are ending and the Goods and Services Tax is about to be introduced.
“Firstly, it can affect our livelihoods. Secondly, there are more than 500 employees working in these factories, and they will be affected. Thirdly, every one of us has availed loans and run the plants with huge liabilities. So, the risk here is we may fail in this rushed decision and action,” said Phuntsho Wangdi, a factory owner.
“I think currently the primary challenges are to re-establish the factories in the new location and to secure the finances to make that happen. A secondary challenge for now would be getting the human resources to re-establish them,” said Singye Dorji, the president of the Association of Bhutanese Industries.
Factory owners say dismantling and transporting massive machinery would be really challenging. The process, they say, requires expert handling, significant manpower, and comes at a high cost, which they would struggle to bear in the current economic situation.
Moreover, they claim, although they were initially informed by the thromde administration that no changes in the land lease rate would be made until the relocation, they are now told to pay the increased rate.
Factory owners met with Association of Bhutanese Industries officials yesterday to discuss the matter.
Singye Dorji said, “We are requesting that the recently increased lease rent not be imposed until the relocation issue is resolved. Secondly, we are seeking either an extension of five years or ten years to allow us to relocate. If an extension is not possible, we will be requesting compensation for the loss of assets and for the full cost of relocation, including demolition, transportation, and reconstruction at a new site.”
The thromde administration’s final notification issued last month stated that all industries should vacate by June next year without further consideration. The first notice was made in 2023.
Damdara will be developed into a recreational and residential area under the Phuentsholing Township Development Project.
Kinley Dem & Kinley Bidha
Edited by Kipchu
