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LATEST NEWS UPDATES | Opposition to India's hydel projects in Bhutan by Sandeep Dikshit

Opposition to India's hydel projects in Bhutan by Sandeep Dikshit

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published Published on Dec 2, 2011   modified Modified on Dec 2, 2011

The winds of democracy are making it harder for India to negotiate the construction of mega hydel projects in Bhutan. Fixing terms and conditions for bringing power from Bhutan was a cakewalk with the first three hydel projects five years ago.

With newspapers other than the Kuensel , a tiny but vocal Opposition in Bhutanese Parliament and exiled leaders raising issues relating to sovereignty, Indian officials are now having to work harder during talks to bring about the closure of agreed upon hydel projects with a capacity to produce 10,000 MW of power. But at a recent high-level meeting to discuss the projects after the Prime Minister's Office expressed unhappiness over most of the proposals not getting off the drawing board, senior Bhutanese officials informed the Indian side about the considerations they had to take into account.

While acknowledging New Delhi's logic for asking for 51 per cent stake in hydel projects for its PSUs, Bhutanese officials said India must bear in mind the changed environment in their country, where the accountability of the government had gone up “dramatically.”

Is Bhutan then heading for a Nepal-type situation where Pancheshwar and Sapta Kosi projects have not taken off after 15 years or more of negotiations?

The situation in Bhutan does not even remotely resemble that of the Indian hydel projects in Nepal where decades of street-level activism has made a large number of them non-starters, explain the officials.

But as eastern Bhutan alleges discrimination and voices in Parliament and on the Net demand that Thimphu adhere to the policies it has framed, both governments are trying to meet their legitimate aspirations. This was an absent factor when the two governments negotiated the Tala, Chukha and Krichhu hydel projects a decade ago.

Partially giving in to the demand that the local business be given a slice of the hydel project construction cake, India has agreed to farm out part of the civil and other work to Bhutanese contractors.

“Major deviation”

Another major issue is the 51 per cent equity Indian companies plan to hold in joint venture projects. Bhutanese officials Thimphu admit this was a “major deviation” from the hydropower policy, which frowns on majority shareholding to an outside entity.

“Are we becoming another Nepal? The country should not become a victim of political arithmetic. If the excuse given by some quarters is that we cannot come up with the funds for these projects, then God willing we should hold on till we are ready,” said an angry blogger after the Bhutanese media published a record of the India-Bhutan meeting that agreed to give majority holding to Indian PSUs in two projects.

Strident voices such as these are still few and opposition is expressed politely. Taking note of these reports, the Bhutanese Parliament asked senior government officials to strictly abide by the country's laws and policies while negotiating joint venture agreements. Officials agree with this request in principle, but point out that Bhutanese companies are not in a position to raise the huge money required for the projects.

Bhutan is also prepared for give-and-take during negotiations because, unlike Nepal, it has tasted the benefits of selling power to India, which now accounts for a quarter of the Himalayan Kingdom's gross domestic product. Also, unlike Nepal, Bhutan has much greater dependence on India in the areas of security, uprgrading of infrastructure and trading. Economic ties, especially, are set to grow if both sides continue implementing the projects in time and a rail link from Hashimara to Phuentsholing becomes a reality


The Hindu, 2 December, 2011, http://www.thehindu.com/todays-paper/tp-national/article2679742.ece


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