India and Bhutan decide to close Kholongchhu joint venture


Economic Affairs Minister Loknath Sharma shares outcome of his four-day visit to New Delhi (July 18-21) to Kuensel Reporter Dechen Dolkar

What were the problems discussed at the meeting?

The main agenda was to attend the 16th meeting of the Puna-II HEP Authority. Due to the Covid-19 pandemic, face-to-face authority meetings could not be held for more than two and a half years. As such, there were several outstanding issues related to the project to be discussed and decisions to be made, in order for the project management to move the project forward. Other Project Manager meetings are to be held twice a year at alternate locations between Thimphu and Delhi.

Since the chairman of the authority is the minister of economic affairs, the minister has requested bilateral meetings with Indian ministers through the foreign ministry, both out of concern for the stakes and out of courtesy. The Indian parliament was in progress and all the ministers were busy, but the appeal was accepted and meetings were arranged.

What were the results of the meeting?

Regarding the meeting of the Puna-II HEP Authority, among other items on the agenda, the members of the Authority could deliberate on the cost of completion and the dates of commissioning of the various units of the project.

As the delegation continued to Delhi, the Government of India (GoI) considered that the export of sugar to Bhutanese industries and even the export of wheat would be terminated sooner.

Similarly, restrictions on the import of coal from India and the export of areca nuts to India were other issues welcomed. In most trade, import/export issues, two governments have shared the issues and come to an agreement to ease the ground issues.


What did the meeting decide on the PHPA-I

Kholongchhu dam and hydroelectric projects?

The Government of India appointed an independent committee to review the Detailed Dam Project Report (DPR) for PHPA-I, and requested the Government of Bhutan to provide time until the independent committee submits its findings. The GoI has impressed that its decision will be based on the outcome of the independent committee. It is also agreed that the pending decision on PHPA-1 is costly and outdated for both parties, so efforts will be made to conclude, including meeting the Authority for PHPA-1 within a month.

The Bhutanese delegation insisted on the need to firm up the decision on the dam option since the current dam site is not feasible. To this effect, the government side informed that the DPR is still within the Central Water Commission (CWC) and that an independent committee is being set up to review the DPR. The Government of India side maintained that only after the completion of the review and receipt of the committee’s report would it then be possible for the two governments to sit down together and discuss the way forward. to be continued.

Regarding KHEL, both parties have agreed to work towards closing the joint venture (JV) and to initiate a discussion on the way forward for the project. It is decided to close the current JV model as quickly as possible, which the government will pass on to DGPC and the GoI will pass on to SJVNL.

Other comments?

Hydroelectric cooperation, the evolution of energy situations, market factors and cooperation modalities were mainly discussed during this visit. The central point was the hydropower cooperation, its future and the commitment of the two countries.

The GoI ruling secretary is expected to visit Bhutan to deepen these discussions at the secretary level.

The visit was a success as we were able to meet four counterpart ministers and discuss our mutual cooperation and understanding. They were as always very supportive and understanding.


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