Lhakpa Quendren
Phuentsholing—The Phuentsholing Township Development Project’s (PTDP) Zone A is likely to miss its completion deadline of December 2025 if the Amochhu temporary shelter remains within the project area.
The temporary shelter, built in 2020 for families affected by Covid-19, occupies 11 percent of the project area, covering 17 acres within the central business district of the 160-acre project area. This could leave 13 percent, or Nu 227 million, of the Asian Development Bank (ADB) loan un-utilised.
The project’s first civil works package, including river training and embankment, concluded in November 2022. The second phase, involving urban infrastructure, is 45 percent complete.
Nepal-based company Kalika and Rigsar Construction Private Ltd. are carrying out the construction worth Nu 1.74 billion. Over 300 workers are involved in the project.
The project is currently running three to four percent behind schedule but the project management is optimistic about completing it by May 2025, with 10 months still remaining.
The project director of Construction Development Corporation Limited (CDCL), Kamal Dhakal, said that all works, including the subcomponents of the project, must be completed before the closure of the ADB loan.
The upcoming contract for greenery and landscaping is expected to be awarded by late 2024.
The project also engaged consultants to assist Druk Holding and Investments (DHI) and CDCL with township management and investment promotion, while other consultancy firms will help promote the project to attract investors.
The PTDP has utilised 65 percent of its USD 93 million budget. ADB funded USD 81.5 million (88 percent), including USD 34.26 million in grants and USD 47.24 million in loans. DHI invested the remaining USD 11.5 million (12 percent) as equity.
The initial phase, managed by AFCONS Infrastructure Limited, India, saw costs rise to Nu 3.518 billion, an 18 percent increase due to pandemic-induced inflation. The project, which began in 2018, was completed in 2022 after the deadline was extended from May 2021.
While the completion of river training and embankment works have significantly reduced flood risks in Amochhu, challenges remain with 13 outfall drains prone to blockages during monsoon season. Investments in machinery and other resources are required to clear the blockage.
Officials said that government intervention is needed to stabilise the hillside and protect downstream developments. This issue has the potential to impact investment in the PTDP.
The CDCL project manager, Lhendup Dorji, explained that six drains are of particular concern to the Phuentsholing-Chamkuna Road Project, Amochhu LAP (100 acres), and the township due to their potential for flooding and the threats they pose to lives and livelihoods.
In June 2023, about Nu 3.5 million was spent on clearing debris from six drains within the project area after flooding affected housing areas near these drains. “Without immediate multi-sectoral long-term intervention to stabilise the hill, these recurring issues are poised to persist every monsoon, leading to huge risk to properties and considerable recurring expenses over time,” he added.
Under the current ‘business-as-usual’ scenario, Phuentsholing’s growth would take decades to create space demand. A ‘business-induced’ approach with policy changes and strong government support is needed to accelerate this and make the PTDP a thriving town.
Future development of the area and the source of funding remain uncertain for now. The planned township includes 240 acres in Zone B, 650 acres in Zone C, and Zone D, the smallest area. The mountain area will also be part of the project, designated as an ecological tourism hotspot.
DHI is leading the township development project to ease space demand and support economic growth, while CDCL is managing the development, which focuses on flood protection and sustainable infrastructure.