Power export to India not beneficial for Bhutan
Sunday, 26 July 2009
THIMPHU, July 25 (PTI): It is economically more beneficial for Bhutan to supply power to its industries than export it to India, a new study has claimed.
The study by the Ministry of Economic Affairs (MOEA) and the Royal Audit Authority compares revenue foregone by the government in not exporting subsidised electricity against the money gained as taxes from 15 major industries, which represent 95 per cent of industrial power consumption.
Here, in spite of the subsidy, the net benefit is about Nu 64 million. In the second model, it compares cost of production and distribution of electricity to the tax revenue gained from industries.
Here again, there is a benefit of Nu 152.8 million over and above cost of production.
"Electricity is the only plentiful raw material, which can be used by our industries to compete with external competitors by value adding on the reasonably priced power," Bhutan's Economic Affairs Minister Khandu Wangchuk told state-run daily Kuensel.
"We can't rely on export of power alone. Right now, there's a strong demand for electricity in the region but, if our buyers becomes self sufficient, then what do we do? So encouraging industries is necessary," Economic Affairs Secretary Dasho Sonam Tshering said.
Tshering said the government would encourage industries that not only use electricity but also locally available raw material.
Norway also used its hydropower to initially bankroll its industrial development through power intensive metallurgy and fertilizers, according to Tshering.
The study was done after the National Assembly made a specific request to RAA and MoEA to find out the benefit or loss from power subsidy to industries.
The study by the Ministry of Economic Affairs (MOEA) and the Royal Audit Authority compares revenue foregone by the government in not exporting subsidised electricity against the money gained as taxes from 15 major industries, which represent 95 per cent of industrial power consumption.
Here, in spite of the subsidy, the net benefit is about Nu 64 million. In the second model, it compares cost of production and distribution of electricity to the tax revenue gained from industries.
Here again, there is a benefit of Nu 152.8 million over and above cost of production.
"Electricity is the only plentiful raw material, which can be used by our industries to compete with external competitors by value adding on the reasonably priced power," Bhutan's Economic Affairs Minister Khandu Wangchuk told state-run daily Kuensel.
"We can't rely on export of power alone. Right now, there's a strong demand for electricity in the region but, if our buyers becomes self sufficient, then what do we do? So encouraging industries is necessary," Economic Affairs Secretary Dasho Sonam Tshering said.
Tshering said the government would encourage industries that not only use electricity but also locally available raw material.
Norway also used its hydropower to initially bankroll its industrial development through power intensive metallurgy and fertilizers, according to Tshering.
The study was done after the National Assembly made a specific request to RAA and MoEA to find out the benefit or loss from power subsidy to industries.