…reminds government to expedite the completion of hydropower projects

Phub Dem

As the government transitions into a new phase of pandemic management after almost two years, the Opposition Party reminds the government to focus on economic and private sector recovery measures.

The party also asked the government to expedite the completion of the Punatsangchhu-II and Nikachu hydropower projects by mid-2023.

The Opposition Party issued a press release emphasising the disrupted economy due to the pandemic and asked the government for a precise measure to achieve employment and revenue generation yesterday.

It states that the economic growth rate fell by 15.8 percent in 2020, from 5.7 percent in 2019 to negative 10.08 percent in 2020. The per capita income has fallen from USD 3400 to USD 3130, recording the fall below 2017 by USD 202.




In line with the dire economic scenario, the party asked the government to pave ways to rebound and revive the economy in 2023 and beyond. The party advised the government to prioritise agriculture, construction, hydropower, tourism and hospitality, small, medium and cottage industries, manufacturing and mining sectors.

The Party said that the government should focus on efforts to streamline and augment exports, suggesting the government work on concrete fiscal and financial measures, both budgetary and taxation matters, and submit them to the parliament. “It should work closely with the central bank on monetary and credit measures.”

It states that the recovery will take longer if the government does not take appropriate measures. “The opposition party always remains ready to render our full support to the government toward this end.”




According to the press release, the Gross Domestic Product (GDP) has decreased from Nu178 billion (B) in 2019 to Nu 171B in 2020. Moreover, the youth employment rate will increase from around 12 percent in 2019 to 22.6 percent in 2020.

The domestic revenue for 2019-2020 fell short by around Nu 7 billion from the initial projection.

The domestic revenue is projected to fall by Nu 2,938M, from Nu 36,219M in 2019-2020 to Nu 33,281M in 2020-2021 fiscal years. It states that the shortfall could be worse given the experience of the actual outcome of the 2019-2020 fiscal year.

The fiscal deficit for 2021-2022 is projected at a negative 8.59 percent of GDP, which, according to the party, is beyond an acceptable threshold and is worrisome.

Adding to the worst, the total resources, including grants and other financial support, is projected to reduce by Nu 11.3B, from Nu 56.7B in 2021-2022 to Nu 45.5B in 2022-2023.

The party also expressed concerns regarding economic contractions in tourism, mining and quarry, hotel and restaurants, manufacturing and construction. For instance, the revenue from tourism reduced by 90 percent and mining and quarrying reduced by around 82 percent.




Concerns surrounding  hydropower projects

According to a separate press release, the Opposition Party asked the government to expedite the hydropower projects to mitigate fiscal deficits and commit to economic self-reliance in the long run.

Due to the pandemic, the economy is taking its toll on domestic revenue, which is expected to fall further in the next two fiscal years.

With the slump in the economy, the party expressed concern that the government is resorting to more borrowings, especially in non-productive and non-hydro power sectors, and worsening the already bad debt situation.

As a percentage of GDP, the debt has increased in the last three years from 114.2 percent in 2018-2019 to 138.8 percent in 2020-2021.

The party recommends the government provide the necessary human resources required for the projects and strive to commission them by mid-2023. The party said that the deadline is achievable if Punatsangchu-II is supplied with additional 1600 workers and Nikachu with 90.




The press release also clarified that the opposition party had never objected to importing foreign workers during the pandemic but questioned how they were brought as per the safety norms and protocols.

The party suggested the government decide between dam and barrage in Punatsangchu-I project as the independent reports from third parties are ready. Besides, it states that the loss of power generation with the shift from the dam to the barrage system is estimated to be only around 1.5 percent.

“Indo-Bhutan cooperation in the hydropower sector has been exemplary, and we are fully confident of reaching a productive and mutually beneficial decision swiftly.”

The Kholongchu hydropower project could take some time to begin due to pending agreement on various financing and contract matters. The party asked the government to expedite the process and begin the construction works.

Although the government’s tenure is nearing completion, the party calls on the government to honour its pledges of generating an additional 5,200 MW of hydropower through Sunkosh, Kuri-Gongri and other projects as none of the promises has been fulfilled.