DGPC withdraws from Kholongchhu JV project

Bomdeling_Jamkhar Constituency’s MP Dupthob

Lhakpa Tshering

Thimphu

The Druk Green Power Corporation (DGPC) decided to withdraw from its joint venture hydropower project from India’s Satluj Jal Vidyut Nigam Limited (SJVNL) after the two projects were unable to reach a consensus for seven years.

The cabinet has directed the Ministry of Economic Affairs and the Ministry of Foreign Affairs to discuss all issues and submit a way forward on the 600MW Kholongchhu Hydroelectric Project Limited (KHEL).

Economic Affairs Minister Loknath Sharma said that the government has decided not to execute the project after discussions taking into consideration the KHEL’s current situation, including issues related to management and cost of the project.

“There are several issues associated with the project that would still remain later on. The project cannot begin until all these issues are resolved. For the moment, our focus is to settle the external issues first and then internal issues,” he said.

“Considering all these issues, we would like to proceed with the withdrawal and any work related to the project, including roads and bridges, will be immediately closed,” he said, adding that the way forward will be updated after the issues are resolved.

The construction of the Trashiyangtse-based run-of-the-river project was planned to be financed under a debt-equity ratio of 70:30 with 50-50 equity holdings between DGPC and SJVNL.

Lyonpo Loknath Sharma said the borrowings have soared and the country will be in a problematic situation if these issues are not addressed. “About Nu 4.5-billion has been spent on the project until now,” he said.

The economic affairs minister was responding to the Bomdeling_Jamkhar Constituency’s Member of Parliament Dupthob at the ongoing National Assembly session on the status of the Kholongchhu project.

The MP said that many residents of Trashi Yangtse are affected by the slow progress of the project. He said that the residents are questioning the developmental activities with not much happening at the project site.

“They have borrowed money from the banks for the construction of commercial houses,” he said, adding that construction of schools and bridges and blacktopping of roads are yet to be done by the project as agreed.