Bhutan to lose around Nu 17.5 bn in annual revenue with 1-year pandemic delay of P II



The Punatsangchu II project was supposed to commission its first unit by July 2022 and have all its six units commissioned by early 2023.

However, due to the pandemic induced shortage of labourers the project even with the best estimates will only be able to commission its first unit by July 2023, a delay of a whole year.


The Minister of Economic Affairs and Chairman of the Punatsangchu Hydroelectric Project Authority, Loknath Sharma said that P II would be earning Nu 48 mn a day in revenue which comes to around Nu 17.520 bn a year.

He said apart from the loss in total revenue, the delay also adds cost as the Interest During Construction which is Nu 14 mn per day which comes to nu 5.110 bn a year.

Apart from this is the establishment cost of the project which comes to Nu 7.50 mn a day or Nu 2.737 bn a year.

Lyonpo said that his regret is not so much for the P I project as given the geological surprise and the recommendation for a barrage there was nothing much that could be done even without the pandemic, but the P II was a much more promising project nearing completion.


Lyonpo said that the delay of the project will mean a huge revenue loss for the government in its final year.

The minister explained that the main problem is that the project requires around 3,000 workers to complete the final works at the dam and power site, but currently they have only around 1,500 to 1,600 workers working in containment, and with Holi coming many of these will want to go back and these workers cannot be replaced immediately.

Lyonpo said the delay could have been more than one year but since they worked under containment and got in some workers they would reduce the delay to one year.

However, he said even this one-year delay is subject to being able to get workers in another two to three months otherwise the delay would again go beyond one year.


Lyonpo said the project is currently functioning at only 43% capacity. Till date Nu 81 bn has been released for the project while the completion cost is expected to be around Nu 90 bn.

Lyonpo said even if the loan component was deducted from the Nu 17.5 bn then Bhutan could still be getting Nu 8 to 9 bn a year in direct revenue.

The project is around 90 percent complete.

The P II underwent delays mainly due to the decisions in 2010 by the PHPA on the advice of the lead consultant WAPCOS and also CWC and GSI to build an underground power house.

The project was supposed to be completed by 2018, however, in 3rd March 2016 the Down Stream Surge Gallery collapsed leading to delays and exposing weakness or shear zones in the underground power house.


Since then the completion date was moved to June 2022 and with the pandemic it has now moved to July 2023.