The construction of the Punatsangchhu-I Hydroelectric Project or PHPA-I dam remains delayed, despite earlier plans to resume work by June this year. According to the energy and natural resources minister, construction will only proceed after PHPA-II is fully commissioned and following a final authority-level meeting later this month. This was shared at the parliamentary Joint Sitting today during deliberations on the Public Accounts Committee’s report on the project.
Although construction of the dam was officially announced in August last year, work remains on hold.
The dam construction has been halted since 2019 due to geological issues.
A prolonged debate over whether to build a dam or a barrage then ensued between India and Bhutan.
Ugyen Tshering, MP, Paro, National Council said, “Although the dam construction has been confirmed, it is unclear what the joint technical team has decided. The update from the team is still awaited. So, please update and clarify the status of those discussions.”
He also mentioned about the losses incurred till date through the project.
Gem Tshering, Energy and Natural Resources Minister said, “The final discussions were held in Delhi recently, and we have yet to finalise a few remaining arrangements. The concern about revenue loss is not accurate at this stage. We can only refer to it as a loss once we begin generating revenue from the project. While 60 per cent of the budget is a loan and 40 per cent a grant, paying interest on the loan does not yet count as a loss.”
He added that profit or loss can only be evaluated once the project is complete and officially handed over by India.
Regarding the powerhouse, it is reportedly over 99 per cent complete. However, it has not been handed over to Bhutan yet.
A key concern raised was whether the powerhouse will remain functional and intact by the time dam construction is completed, which may take another four years.
The Public Accounts Committee’s report says that the powerhouse will be kept intact through additional agreements, so that it can be used for future testing and commissioning.
Loday Tsheten, Member, Public Accounts Committee said, “The government should clarify what the supplementary agreement includes. Even with insurance, we know there will be more expenditure on the powerhouse. Will the original 60:40 loan-to-grant ratio still apply?”
Gem Tshering, Energy and Natural Resources Minister said, “Since the powerhouse is nearly complete and dam construction will take about four more years, the concern is valid. But the 60 per cent loan and 40 per cent grant arrangement remains unchanged. Until the handover, it’s their responsibility to maintain the infrastructure.”
The PHPA-I project, which began around 17 years ago, is initially estimated to cost around 35 billion ngultrum. The cost has almost tripled over the years, with the project now expected to cost over 100 billion ngultrum.
Samten Dolkar & Devika Pradhan
Edited by Kipchu
