A bridge between industries and the government

When the power tariff was revised and increased in October 2013, industrialists claimed that it hit them most.

Bhutan Electricity Authority (BEA) approved increase of energy charge to Nu 1.98 per kWh from the then existing Nu 1.79kWh for medium voltage (MV). Demand charge increased to Nu 155 kW per month from earlier Nu 115kW/month for MV users.

In case of the high voltage (HV) users, energy charge increased to Nu 1.67 per kWh in 2013-2014-tariff cycle from Nu 1.54 per kWh. Demand charge increased to Nu 130 per kW per month from Nu 105 per kW per month.

The revision increased electricity bill by millions to the industries.

Industrialists appealed to the government that the only advantage Bhutanese industries had over industries in neighboring countries was the lower tariff but with electricity bills increasing, industrialists said they were on the verge of closing the industries if the cycle continued.

The industrialists met and asked the Association of Bhutanese Industries (ABI) to raise their concern to the government.

ABI then had dialogues with the agencies such as the BEA, Bhutan Power Corporation and the economic affairs ministry and followed it up several times, leading to a change in the tariff in December 2016.

When the tariff increased, high voltage (HV) industries were hit the most. However, starting January 2017, a new tariff schedule was implemented. The HV energy charge of Nu 1.96 per KWH was then reduced to Nu 1.59 until 2019.

An official with Saint Gobain Ceramic Materials Bhutan Private Limited in Pasakha industrial estate, Dipankar Chakraborty, said the ABI has done a good job in reducing the electricity tariff.

“Power tariff was increasing continuously when the market was not stable,” he said, adding that industries were running at loss. “Helping us with tariff is one of the greatest successes of ABI.”

ABI, conceived 10 years ago when few prominent industrialists came together to start an association to address issues related to the industries, was formed in 2008.

It was registered as a Mutual benefit Organisation (MBO) under the Civil Society Organisation Act of Bhutan, 2007.

The association, according to the office bearers, have submitted many industrial related issues to the government and solved more than 70 percent of them.

Chief executive officer of Pelden Enterprise Limited, Pema Tenzin, who is also an executive member of the association, said ABI gathered views from different industries on power tariff and presented factual inputs to the government. “ABI is a strong bridge between the industry owners and the government.”

He said the association has resolved industrial issues with the government since its inception. “ABI really benefitted the industries.”

Pema Tenzin explained that many industries have come up today, creating different challenges and ABI has assisted in all possible means.

Dipankar Chakraborty also said that ABI has worked with the government to open a basic health unit (BHU) in Pasakha. The construction works for the BHU is expected to start by this year.

“This BHU will help both public and industries here,” he said. “People will not have to travel all the way to Phuentsholing.”

Industrialists also claim that ABI has been consistent in taking grievances to the government to solve issues in whatever capacity it could.

ABI is also in the process of linking cargo train facility from Hasimara, India.

Although in its early stage, if the project comes through, transportation costs will decrease and safety of outgoing products will be enhanced. As of now, trucks ferry the finished products to all destinations across India.

Considering its vision to represent manufacturing industries in all forums, within and outside the country, to foster growth of industries in the country, ABI has also participated in various consultative meetings and forums, trade fairs, both within and outside the country. It also participated in the formulation of Economic Development Policy, 2010, Foreign Direct Investment Policy, 2010, and Mineral Development Policy.

ABI has also participated in the first Bhutan-India regional friendship trade fair  in Gelephu in January 2010 and 10th SAARC trade fair in Kathmandu, Nepal in December 2010.

Meanwhile, with Goods and Services (GST) Tax in India to be commenced next month, ABI is currently studying how it would impact industries. ABI had also hired a consultant firm.

ABI general secretary Jochu Thinley said the association is currently researching GST’s impact analysis.

“We will find out GST’s impact on our industries and the Bhutanese economy,” he said.

ABI program officer, Pema Yangchen, said the association has also coordinated trainings in disaster management in 2016 and security coordination in 2015.

“Various multi-sectorial meetings are also conducted whenever required,” she said.

Pasakha industrial estate is the largest estate in the country with 22 ABI member industries. The remaining 30 are distributed across Samtse, Samdrupjongkhar, and Thimphu.

As industrial parks development is ongoing in Samtse, Gelephu, and Mongar, ABI is expecting more members.

Currently, there are 51 registered members with ABI, of which 20 are large-scale industries and 16 medium scale industries. The remaining 15 are small industries.

The ABI has been following up on the Bhalujhora bridge that connects Pasakha industrial estate.

Pema Yangchen said that the bridge is ABI’s major concern today. “A stakeholders’ meeting was also conducted recently,” she said.

Industrial trucks ply through the Bhalujhora river, as the bridge is not feasible for heavy trucks. The route is not accessible in rainy season.

In 2016, vehicle movements from both the sides were immobilised for several days causing loss to the industries.

Construction of a new bridge was also initiated in 2015. But the contractor was terminated due to delay in work.

ABI pursued this matter with relevant agencies like the Department of Roads (DoR) and Phuentsholing thromde.

Although the bridge will not be constructed this summer, the DoR agreed to help like deploying excavators to dredge river whenever industrial trucks were unable to cross the river.

ABI general secretary, Jochu Thinley, said the association’s major challenge is its memberships.

“ABI’s sustainability depends on voluntary contribution from the industries,” he said. “We do not have support from the government or any other agencies.”

Vision:

“Facilitate growth of industries in the country”

Mission:

1. Promote industries that are sustainable and are in line with the government policies and objectives.

2. Represent manufacturing industries in all forums both within and outside the country to foster growth of industries in the country.

3. Promote high standards of services, product quality, and professionalism in the industries.

Objectives:

While the overriding objective of the Association would be to develop manufacturing industries in the country, the other primary objectives of the Association are to:

1. Act as a platform to discuss with the government and related agencies and resolve issues and problems constraining the growth of industries in the country

2. Review relevant Acts, Rules, Regulations, Procedures, incentives of Bhutan and other countries and make appropriate recommendations to the government that would facilitate in the growth of industries in the country

3. Study industrial policies of other countries through participation in forums – domestic, regional and international and derive ideas and methods that would contribute towards growth and development of industries

4. Make appropriate recommendations and suggestions to the government on policies, procedures, regulatory and other pertinent matters in all the related areas intended to create an enabling environment for growth and development of industries;

5. Liaise with government, public and private agencies, Associations, Federations, Confederations, and other legal entities located within and outside the country in areas that are of interest to the Association

6. Support industries in the affairs of their businesses through promotion of good governance, labour rules and regulations, fair and transparent procedures;

7. Support government in preserving environment through promotion of environmental friendly production systems and techniques;

8. Promote, protect and safeguard the interest of manufacturing industries in Bhutan from undue external and internal influences.

Rajesh Rai | Phuentsholing

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