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… it has spent Nu 4.5 billion to date

Tshering Palden  

The first joint venture hydropower company, Kholongchhu Hydro Energy Limited (KHEL) in Trashyangtse is closing its operations from today.

The Kholongchhu management yesterday issued an office order asking all department heads to close offices including the two liaison offices in Thimphu and Samdrupjongkhar today. The offices have been preparing for closure for a long time.

“All contracts/awards, MoUs, and such other activities (obligatory or otherwise) shall be terminated. All assets and liabilities shall be updated and brought out properly,” states the order from KHEL Joint Managing Director.

Work at the site had also stopped for some time now.

Construction at the project site has stopped




KHEL Managing Director SK Garg wrote to the JMD, and directors of technical and finance departments on August 13 stating that the decision is “as per the decision of the two governments” regarding the closure of the joint venture company.

The managing director cited a severe financial crisis in KHEL. “We’re left with no other option but to repatriate/retrench the employees who are not gainfully employed in KHEL and take some other actions to mitigate the establishment expenditure,” the MD stated.

He said owners of the 18 units that the company has leased be informed immediately that the lease will end on August 31.

“Retrenchment of employees recruited by KHEL on contract shall also be processed immediately. Temporary employees, if any shall stand relieved on Aug 31,” the MD’s letter stated.

A company official said that the priority was to close the company ‘smoothly’. However, some employees said that they are not sure what would be their fate.

“We’ve no information.”

A source said, “Whatever the fund position of the company may be, benefits should be paid by the company, even if they are liabilities. Likewise, payments to contractors will also have to be sorted out.”



The Nu 54.82 billion project, excluding the costs for transmission systems, was scheduled to complete in 2025.

Construction of the 600MW project was planned to be financed through a debt-equity ratio of 70:30 with 50-50 equity holdings between the Druk Green Power Corporation and the Satluj Jal Vidyut Nigam Limited (SJVNL).

The initial proposal was that 20 percent of the capital works at the dam and powerhouse would be executed by Construction Development Corporation Limited and 80 percent would be awarded to Jaiprakash Associates Limited.

Both contractors, CDCL and Jaiprakash, agreed to do the work as proposed in the agreement. However, it was learned that SJVNL was opposed to the agreement.

SJVNL did not want to give the 20 percent work directly to CDCL and wanted to give it fully to an Indian contractor who would award it as a sub-contract to CDCL. The  DGPC objected to this since being a sub-contractor would impact Bhutan’s capacity development.

Observers say that the closure of the project does not appear overwhelming seen against the overall ambition to develop 10,000MW by 2020. However, with Bhutan already facing energy deficits in winter, it is going to impact the country’s energy security.



The full closure of the company is expected to occur soon, a source said.

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