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Bhutan’s Sun Kosh Hydro-Power Project: Mega Project With Mega Problems – Analysis

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By Dr. S. Chandrasekharan

There is no doubt that Bhutan is keen to implement the 2560 MW Sun Kosh Mega Project as it will be immensely beneficial to Bhutan’s economy.  I had already referred to this project in paper no. 6489 dated 8th September 2019 and the problems involved in the construction of a big storage dam and consequential problems relating to environment, finance et.

During Prime Minister Modi’s visit to Bhutan, the joint statement in September 2019 specifically mentioned- “Given the huge benefits that would accrue in both countries from the project, they agreed to finalise the implementation modalities for the project earliest to enable the commencement of the construction.”

With this joint statement, it was expected that both countries would now have solved their mutual differences and make a start for the implementation.  Unfortunately, this has not happened.  To me it appears that a mega project of this magnitude with a huge storage reservoir having an impact on the environment too, Bhutan is rightly insisting on being involved in the construction of the dam. It also wants to  have a say on all aspects in the implementation of the project whereas the Government of India’s thinking is to have a turn key project, given to a separate entity  like the Hysro Power Corporation of India and then handed over finally to Bhutan. 

Bhutan has many reasons to object to the modality of the project as a “turn key one”.

First, is that Bhutan and its experts on Hydro power technology will not be involved in the construction of the project at any stage thus depriving the Bhutanese technical personnel  get experience in the construction of such a major mega project.

Second, their experience in the past has been that no joint project with India has ever been constructed on time or without the cost overrun.  This affects finally the pricing factor of the power sold to India.  They also have in mind the cost over-run and the inordinate delay in the construction of the Punatsangchuu 1 which by all accounts will not be ready for the next few years.  Even Punatsangcchu 2 is also being delayed.

Third, no one seems to be accountable for the inordinate delay and faulty decisions.  In Punatsangchhu the failure to study the geological structure near the dam before the construction when the GSI Investigator specifically opined that further investigations were necessary has had a staggering loss of money and delay.    

For greater supervision and accountability Bhutan has suggested the formation of an “executive Committee” drawn from both sides and be made accountable on every aspect of the construction of the current project.

Bhutan had also formed a High-level Committee to review the Hydro projects and come up with suggestions for more efficient implementation.  One of the suggestions was to separate the consultants between project investigation and actual project implementation.

It is only because of past experience that last September, Bhutan has entered into a “Performance Agreement” for the first time for Punatsangchhu  1 and 2 with the Project Management with the objective that Project Management Consultants are made fully responsible to complete the projects within the stipulated time.

Fourth, is the complaint on the poor quality of the equipment used in the project.  The most recent project Mongdechhu had problems with the generators from BHEL resulting in delays and consequent loss of revenue.

Recently, the Indian Ambassador in an interaction said that there is no dispute between the two countries on the project and that only discussions are still going on.  At one point, the local Press quoted her that the sun Kosh project will be an “inter-Governmental Project”, there by hinting that the major difference of view on the modalities of implementation of the project has been solved.  But there are no other reports confirming this view.

The Foreign Minister of Bhutan as a true Buddhist suggested a “middle path” mutually acceptable to both countries.

The question of financing the project and the share of each country is seen not to have been resolved.  India was for sharing on 80-20 and not on 70- 30 that has been the basis all along for all the projects. 

It is legitimate for Bhutan to have some control over a major project being constructed on Bhutanese soil and not deny the Bhutanese technical personnel to learn and improve their expertise. India should compare their experience in Bhutan with what they have experienced/ are experiencing on projects which are primarily of major benefit for India in Nepal.  Bhutan has gone out of the way to accommodate Indian interests and this should be taken into account in the implementation of all major projects in Bhutan including the Sun Kosh Project.



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SAAG

SAAG

SAAG is the South Asia Analysis Group, a non-profit, non-commercial think tank. The objective of SAAG is to advance strategic analysis and contribute to the expansion of knowledge of Indian and International security and promote public understanding.

One thought on “Bhutan’s Sun Kosh Hydro-Power Project: Mega Project With Mega Problems – Analysis

  • Avatar
    January 7, 2020 at 3:55 am
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    In my sincere opinion for any bilateral projects to succeed, the leadership role or the ownership has to be with the country where it is being implemented and every one has to be frank and clear in decision making. This way there will be no buck passing , things like delayed in completion, cost overrun, selection of equipment etc etc and also forget about the philosophy of middle path and take a right decision .

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