Foreign Secretary Vijay Gokhale briefing the media on Friday about Prime Minister Narendra Modi’s upcoming Bhutan visit
INDIA-BHUTAN TIES

Hydropower Push During PM Modi’s Bhutan Visit

Parul Chandra New Delhi 10 August 2019

Throwing its weight behind the Lotay Tshering-led Bhutanese government, New Delhi has decided to resume negotiations on the ambitious proposal to construct the 2,560 MW Sankosh hydroelectric power project in the Himalayan kingdom. The project has failed to take off with New Delhi and Thimphu busy quibbling over the manner of in which it will be executed.

While Thimphu wants the project implemented through the inter-governmental (IG) model, New Delhi favours the multipurpose dam’s construction on a turnkey basis by an Indian company. With Prime Minister slated to make a state visit to Bhutan for two days beginning August 17, New Delhi is making yet another attempt to get this project, stuck for many years, going.

As foreign secretary Vijay Gokhale said on Friday, “Our relationship is predicated for a long time on hydropower and the support that we give as a development partner to Bhutan”. He also indicated how important this project is for the current Bhutanese government led by Dr Lotay Tshering who became PM in October last year. The manifesto of his party—Druk Nyamrup Tshogpa—had promised to strengthen the development of hydropower projects in Bhutan and had referred to Sankosh in this context.

“It’s a priority for Bhutan in the term of the current government and we have indicated that we’re ready to move forward,” Gokhale said, adding that funding modalities and the manner in which the project will be executed—inter-governmental one or a joint venture—will be discussed during the PM’s visit.

The project is expected to generate 2,585 MW, far more than another multipurpose dam, Mangdechhu, which PM Modi will inaugurate during his visit. The 720 MW project has four units, three of which have been commissioned at a cost of Rs 5,012 crore. The project has been built with 70 per cent loan and 30 per cent grant from India. Apart from this, the two sides will also be inking the Power Purchase Agreement for this multi-purpose dam.

An agreement on the Sankosh project was to be inked when the two neighbours celebrated 50 years of diplomatic relations in 2018. The mega dam was discussed during the Bhutanese PM’s visit to New Delhi in December 2018 when he met PM Modi. The joint statement issued then said: “They reiterated their commitment to jointly develop 10,000 MWs of hydropower generating capacity in Bhutan and in this regard discussed the Sankosh Hydropower Project.”

The two sides will also discuss the Himalayan country’s health needs. Bhutan’s PM, who is a doctor, is keen on improving healthcare facilities, a promise made in his party’s manifesto.

PM’s Modi’s visit will also see the India-Bhutan relationship taking a step forward in yet another area, space. This frontier is being explored as a priority sector by both sides and PM Modi will inaugurate a ground earth station built by ISRO in Thimphu. This will enable Bhutan to utilise the Asian satellite transponder given by India for use by the Bhutan Broadcasting Service and for disaster management, said Gokhale.

The RuPay card scheme, a digital payment platform, will also take off during PM Modi’s visit. To be implemented in two phases, during the first phase Indian banks will issue RuPay cards to Indian citizens and visitors in Bhutan. The second phase will see cards issued to Bhutanese citizens.

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