A matter of power

The Indian minister for power, Sushil Kumar Shinde, was in Bhutan from 4 to 7 December. His visit was busy: His Majesty the King granted an audience; he met the Prime Minister, and the MEA Minister, Secretary and DG; he visited the Tala dam site and Chukha power plant; he visited Dochula; and I called on him.

His visit was successful: a protocol agreement to develop 10,000 MW by 2020 is ready and will be formally signed later this month. An “empowered group” will then be formed to identify and accelerate the implementation of hydropower projects. Both governments are visibly optimistic, and Mr Shinde has even promised to complete the plan by 2019, that’s a year before schedule.

In all this exuberance, we’ve forgotten to involve one player – Druk Holdings and Investment. As far as I know, the government did not involve DHI at all during this very important delegation. They were not included in any of the discussions. And they did not even get to make a courtesy call on India’s Power Minister.

This is unfortunate. Practically all the knowledge and experience with regard to hydropower development in Bhutan resides with the Druk Green Power Corporation and Bhutan Power Corporation, both DHI subsidiaries. Ignoring this valuable store of national expertise does not make sense.

As a matter of fact, DHI should actually be fully involved. Their mandate, decreed by Royal Charter is “… to hold and manage the existing and future investments of the Royal Government of Bhutan for the long-term benefit of its shareholders, the people of Bhutan.” It goes without saying that the development of the 10,000 MW of hydropower would constitute “future investments of the Royal Government”.

The Royal Charter also declares that “DHI shall implement all future commercially oriented projects that are developed by the government”. All the power projects included in the 10,000 MW plan are obviously “commercially oriented” and DHI will, by law, be required to implement them.

If DHI is expected to eventually “hold and manage” these hydropower projects it is only good sense to involve them right from the beginning. If the negotiation, identification and construction of the projects are done by the government, and if the DHI is expected to take over the projects (including all loans) once they are operational, the incentives to work fast, cheap and well may not be strong.

True, DHI does not have the capacity to implement such large projects. But neither does the government. Hence, a few months ago, the talk of creating an entirely separate secretariat for energy under the Ministry of Economic Affairs. This would be wasteful, inefficient, and tantamount to hiding two ministries under one umbrella ministry.

Develop DHI instead – they have the mandate, experience and the right incentives.

 

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  1. I had no idea that the Power Minister was kept away from any aquaintance with DHI. As a bonafide citizen of Bhutan, I am concerned that such convenient overlooking can take place in our country.

    We will stand to gain by being united, act divided and we will surely fall.

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  1. […] two separate secretariats of two separate ministries. And this, incidentally, is exactly what I had said when, more than two years ago, I first heard about the government’s intentions to establish […]

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