Govt. assures to look into lowering power tariff for industries

The government is keen to look into all the issues that the biggest industrial hub in Pasakha currently faces including reducing the power tariff or maintaining status quo, according to economics affairs minister Loknath Sharma during his recent visit to Pasakha.

The industries in Pasakha grapple with numerous internal and external obstacles have considered power tariff as the only option from which they can benefit.

Lyonpo stated that despite Mangdechhu Hydropower Project commissioning, the country still lacks electricity security during the lean season in winter when power generation decreases. “Still then, it’s essential to keep the rate rational. That’s the only raw material we can provide at affordable rate,” he said.

Bhutan imports electricity from India during winters for domestic consumption.

The minister assured that the government can come to the rescue of industries’ gradually after

assessing the situation.

The government is also looking into revising the Electricity Act. “The new policy should definitely help them,” he said.

Multiple agencies are involved in supplying electricity and the power tariff revision will happen soon, said Lyonpo Loknath Sharma.

The power tariff will be revised but multiple factors would be considered before that including inflation and power generating and distributing cost.

The government has notified the agencies like Druk Green Power Corporation Limited and Bhutan Power Corporation that have “considered the government’s request,” the minister added.       

Lyonpo also assured that whatever the rate, it would not be at the cost of the industries. Also, the government is likely to provide power subsidies during surplus electricity production 

During the minister’s visit to Pasakha Industrial Estate, industrialists said Foreign Direct Investors have also withdrawn their investments after realising 10% annual increment in the power purchase agreement.

The Royal Monetary Authority’s Annual report 2018 states that the manufacturing sector has contributed 7.25% share of GDP to the country. Also industrial goods constituted 50.6% of the total export, which is mainly ferrosilicon under the top 10 commodities of export as per the Bhutan Trade Statistics 2018.

To a large extent, industrial exports have always been offsetting the difference in trade balance between the India and Bhutan. The local industries also earn INR and much needed convertible currency and provide employment to thousands of nationals, industrialists say.

Unlike India which has a favourable tax regime, cheap labour, ready market, low transportation cost, the only competitive edge Bhutan enjoys is relatively cheaper energy.

The ABI requested the minister to keep tariff viable for the HV industries. The ABI also has 25 medium voltage industries and Hotels and Restaurants Association of Bhutan (HRAB) has 164 tourist standard hotels registered with them falling under the Medium Voltage category providing employment in thousands and contributing to the government coffer in the form of direct and indirect tax. They have also requested for subsidies MV industries.

Krishna Ghalley from Phuentsholing