Budget: The Punatsangchhu Hydropower Project Authority I is running out of budget.
With the dwindling budget in its coffer, the project has taken stringent measures and is concentrating only on the critical areas to continue with project. The project has also deferred payment to government companies like the Bhutan Power Corporation and the Bharat Heavy Electricals Ltd. in India.
“We defer their payments because those are not critical,” the managing director, RN Khazanchi said. “That’s how we have staggered and survived.”
The project is however, hoping that the government of India would sanction the revised costs estimates for the project within the next month.
In March 2014, the project submitted a cost to completion of Nu 94B at the December 2013 price level for sanction by the government of India. Pending details and scrutiny, the Indian government gave last year an interim budget of Nu 17.65B.
“We’re waiting for the government of India to sanction the revised cost estimates,” the managing director said.
The project has received Nu 52.8B from the Indian government so far, but has exhausted it already.
Further delay in sanctioning the budget could put the project in more difficulties while it is feared that the completion will be further delayed with the change in method of building the dam.
The 1200MW project’s initial cost of Nu 35.14B in 2006 was revised to Nu 90B, excluding the Nu 3.5B as additional cost for the remedial measures taken to address the landslide on the right bank of Punatsangchhu last year.
The cost of the project’s completion could go further up considering the eight percent average inflation in 2014.
The project’s 60 percent of the total cost is grant from India, while 40 is loan. It is also the first trans-boundary clean development mechanism project.
The project, including its consultants and contractors, as of last month has 5,394 employees of which 1,481 are Bhutanese.
By Tshering Palden