The government would lose a revenue amount of Nu 16 B on account of rescheduling of Punatshangchhu I hydropower project’s completion date from November 2016 to 2017, according to a Royal audit authority report.
However, with the recent completion date fixed at 2019, the revenue loss to the government is expected to be even higher.
The audit report on the project stated that for every extension of the completion date, proportionate revenue to the government was lost. The notional revenue loss was however calculated on the previous cost estimate of Nu 82.6 B.
Since the total cost has now increased to Nu 94 B, the revenue loss to the government would be much higher, the audit report confirmed.
The relocation of dam has also cost the project an additional Nu 4.5 B and not Nu 1.3 B as previously envisaged by the project authority.
With the dam height at the new location, remaining more or less the same, at around 70 meters below riverbed, the estimated cost saving of Nu 500 M due to reduction in the height of dam was also not achieved.
The audit report stated that the project’s cost has escalated due to improper decision in the relocation of dam and geological surprises. This cost escalation, according to the report would also lead to increase in the tariff rates.
The report mentions further delay in commissioning of the project would have a direct impact on the capital cost of the project and hence push tariff rates.
According to some study, electricity from Punatshangchhu I hydropower project could cost as much as Nu 4 a unit if the project is completed in 2017.
Today, Bhutan sells power to India at an average Rs 2 a unit.
