Cost escalates in Bhutan’s hydro ambitions

Bhutan’s over ambitious plan to produce 10,000 MW of power by 2020 is facing hurdle as costs continue to escalate and are being delayed.

One of the biggest project Punatshangchu – I was begun in 2007 with the estimated cost of Nu 35 billion. New estimates put the cost to be around Nu 97 billion and escalation trend shows it is likely to grow further by the time it finishes.

The DPR carried out WAPCOS had put the estimation of this 1095 MW project at around Nu 32 million per MW. Now the cost reaches Nu 295 million per MW.

With the start of the project construction, the total cost was revised to Nu 66 million and now finally to Nu 97 billion. The cost escalated with the relocation of the dam 1.5 km upstream and increasing the project’s installed capacity to 1200 MW.

The relation of dam has now showing signs of natural disaster. In recent years, the right bank of the site’s dam is sinking and the contractor is estimating it to cost around Nu 3.5 billion. The unstable ground situation is likely to hamper the project running to its fullest capacity and to its life.