5 February, 2010 - The Druk holdings investment (DHI) and its companies are planning a Nu 52.614 bn investment for various projects and plans in four years, from 2010 to 2014.

With Nu 28.464 bn, Bhutan power corporation (BPC) has the largest investment outlay. Of this Nu 15.677 bn will go towards construction of transmission infrastructure for Punatsangchu I and II and Mangdechu.

“Under the Tala project this responsibility lay with the Tala hydroelectric project authority, but now BPC will be in charge of arranging for the infrastructure, which will help with capacity development,” said DHI senior analyst, Kinzang Tobgay.

BPC will also be constructing a 20 MW Begana hydroelectric plant in Thimphu and a 13 MW Druk Bindu hydropower plant in Samtse.

Druk Green power corporation with a Nu 10.556 bn outlay will see the bulk of the investment in two new hydropower plants outside the 10,000 MW with the 208 MW Nikachu and 100 MW Gamri. The former is located on the Nikachu tributary of the Mangdechu between Wangdiphodrang and Trongsa, while the latter is on Gamri, a tributary of the Drangmichu in Trashigang.

These power plants are aimed at providing power to a data centre being planned by DHI and also supply power to the 10,000 MW construction sites that could require around 5 to 20 MW per project. The long terms cost of both the project beyond 2014 is seen at Nu 24.023 bn.

DGPC has also set aside Nu 500 mn to make Bhutan’s first hydropower construction company, with the aim of making it capable to execute major works, as DGPC is expected to take on join venture projects with Indian PSUs. “The bulk of the money will be used for buying heavy machinery and already 60 engineers are being trained,” said Kinzang.

Nu 518 mn has been kept for a hydropower workshop in Gelephu, which would be capable of carrying out major mechanical repair and maintenance work on parts like the turbines, which are currently done in India. There is also a plan to renovate and automate the entire Chukha hydropower plant to increase efficiency and revenue at a cost of Nu 458 mn.

In order to increase the generation of Tala, especially during the winter months, there is a Nu 510mn plan to divert the Taktogomchu to the Tala dam.

Druk Air plans to purchase a third international aircraft at Nu 1.960 bn. It also has a Nu 320 mn budget for domestic aircraft, in line with its application as one of the bidders for operating domestic air services. However, Kinzang Tobgay said that Druk Air’s plans could change, depending on the ground situation or whether it wins the bid for a domestic air operation.

Bhutan Telecom plans to invest Nu 2.033 bn in the expansion of its B-mobile network, rural GSM mobile services, and transmission infrastructure and also upgradation of its current system.

In keeping with the expected demands for raw material, NRDCL is looking at investing Nu 310 mn in stone crushing plants and sand dredging machines. “Sand dredging machines will help access the currently large quantities of inaccessible sand below the water level by sucking up the sludge from river banks and filtering it,” said Kinzang.

Dungsam cement plant will also see a Nu 7.170 bn investment.

DHI itself is investing Nu 6.3 bn in various projects like establishment of an industrial estate, data centres, magnesium metal plant and the Thimphu Techpark.

“The projects in total are expected to create 4,500 jobs directly by 2014 and more indirect employment,” said Kinzang, adding that many of the DHI projects will be on public-,private partnership model, whereby other interested parties can take part in the project.

The concerns, however, for DHI will be the substantial capital will have to be mobilised and, given the limited capacity of local banks, DHI says that funds through external commercial borrowings and FDI will be very important.