Outgoing Ambassador of India to Bhutan, Ruchira Kamboj, talks to Kuensel reporter Dechen Dolkar on issues pertaining to hydropower projects, fuel prices and railway network. Excerpts.
Ambassador Ruchira Kamboj was appointed as the Ambassador of India to Bhutan in February, 2019.
She is transferred to New York as Permanent Representative of India to UN and is leaving Bhutan today.
The Government of India is yet to decide on the Kholongchhu Hydropower Project, and the PHPA I barrage issues. Kindly share an update as to what is happening with these issues. When is the GoI likely to come up with a decision?
Bhutan – India Hydropower Cooperation is five decades strong and has been carefully nurtured by the leadership of our two countries for the benefit of our people. Together, we have succeeded in commissioning a generation potential in Bhutan of 2,136MW, which has provided clean energy to India on the one hand, and revenue to the Royal Government, on the other. In 2020, we were pleased that the hydropower revenue of Bhutan increased by 31 percent with the commissioning of the Mangdechhu Project, providing much needed economic space to the Royal Government to combat the Covid- 19 pandemic. Our hydro track record is win-win, and both Bhutan and India have worked together to resolve issues to keep the projects on track.
The PHPA-I Project is facing a geological issue, which merits a detailed technical examination to ensure a safe, reliable and robust way forward for the Project. We have received the barrage proposal from the Royal Government, and it is being examined by Hydro experts in India. Very soon, we shall be holding further discussions with the Royal Government of Bhutan on a technically sound way forward.
Similarly, on the Kholongchhu Project, we have noted the concerns of the Bhutanese shareholder. The 600MW Project is a first of its kind in Trashiyangtse, and holds great potential in boosting economic activity in Eastern Bhutan. In addition, the Government of India (GoI) had agreed to the Royal Government’s request to offload 20 percent of major works to Bhutanese contractors. It was encouraging to note that one of the Bhutanese contractors, Rigsar Limited, was awarded a major contract in a Joint Venture with an Indian company. With an expected annual revenue of more than Nu 10B, we are of the view that it would be a lost opportunity if the project doesn’t take off. We are looking forward to the visit of Lyonpo Loknath Sharma to India in July 2022, to hold detailed discussions on the future of the Project.
The PHPA-II project is on track and is expected to commission its first unit in 2023. The project was scheduled for completion by June 2022, owing however to the Royal Government’s procedures and policies restricting the import of labour and material due to the Covid-19 pandemic, the project completion has been delayed. I am confident that with the easing of border restrictions, the Project will be completed within the revised timeline.
Fuel prices have been increasing rapidly in the past few weeks. Recently, India also imposed an export tax on fuel. Would that affect Bhutan? Will there be any concessions available to Bhutan?
As you are aware, recent developments in the international market have caused a steep hike in fuel prices in India, as well as in many other countries across the world. The ongoing Ukraine-Russia crisis, sanctions that have been imposed on some oil-exporting nations, and prolonged disruptions in global supply chains have had an impact on the global price of fuel. Given our close relations with Bhutan, the concerned authorities in the GoI are working towards addressing the concerns of Bhutan.
The situation that Kholongchhu has been caught in has raised numerous questions including those on the power trading tariff. Hydropower is bought for Nu 4 and the companies sell it in India at Nu 8. Is there any room for an increase in the tariff?
The tariff agreements for all hydropower projects in Bhutan are mutually decided by both countries after detailed technical examination and in a spirit of friendship and cooperation. These are long-term Power Purchase Agreements, which provide assured returns on an incremental trajectory, saving Bhutanese entities from market fluctuations. For Projects such as Chukha, the tariff is revised bilaterally every four years, and has been increased beyond technical calculations on Bhutan’s request, based on the goodwill and friendship that exists between our two countries.
In the power exchange in India, sometimes the tariff goes as low as 60 paise per unit. Our long-term power purchase agreements save Bhutan from these fluctuations and uncertainties.
May we point out that your specific assumption regarding the price difference in purchase and sale of electricity is misplaced and incorrect. The price offered to the consumer is a mix of energy sources such as Hydro, Thermal, Nuclear, Wind, all of which are differently priced in the energy market and the final price to the consumer does not reflect an outright increase in the selling price of Hydropower procured from Bhutan. For projects such as Chukha, the GoI has even gone ahead and provided subsidy to increase the tariff to a price higher than the one offered by Power Discoms based on market conditions.
In all our past projects, India has offered reasonable tariffs which have made the Hydro debt of Bhutan self-paying, thereby insulating the sector from market uncertainties. Going forward, in the competitive power market of the 21st century, both countries should ensure that project costs and delays are kept to a minimum, to maintain the viability of future projects.
Kindly share how much is the concession price of fertilizer that India would be sending to Bhutan? Have the
details of how it would be sent to Bhutan been worked out?
At the Royal Government’s request, the Indian side has agreed to supply nano nitrogen fertilizer to Bhutan at a concessional price lower than the standard rate, as a special gesture to Bhutan taking into consideration our close and friendly relations. We have conveyed the requisite details of the Indian supplier, viz. Indian Farmers Fertilizers Cooperative Limited (IFFCO), to the Bhutanese side for effecting the supply at the earliest.
India and Bhutan signed an MoU in 2005 to connect Bhutan with Indian railway networks. Recently, Indian media reported that a survey has begun on a link between Kokrajar in Assam and Gelephu. Could you kindly share some details?
This is a project of high-priority considering the salience of connectivity to the people of both countries. The matter is under consideration by nodal authorities on the Indian side.