SILIGURI: The negotiation is over. After years long discussion, finally India and its Himalayan neighbor Bhutan have agreed to restructure the power tariff of Chukha Hydroproject in Bhutan of which sole external buyer is India. The development will cost India an additional load of Rs 45crore per annum.
As per announcement made by the prime Minister of Bhutan Tshering Tobgay, the new rate stands at Rs 2.25 a unit against old rate of Rs 2 for around 1,800 units of power exported to India by Chukkha annually. Significantly, the new rate will be effective from 1 January 2013 allowing Bhutan to earn over Rs 45 crore additional amount as arrear.
According to Bhutan Economic affairs minister Norbu Wangchuk, this payable may not be cleared out by India at one go, but in installments.
As learnt, price revision of chukha output is supposed to take place once every four years. But the present revision was due since 2009. Beginning with Rs 0.19 a unit in 1988 with commissioning of Chukha, the price had seven revisions so far.
According to Dasho Karma Ura, Advisor to the Bhutan Ministry of Finance, Power Trading Corporation of India purchases power from Bhutan at a base price of Rs 1.55 per unit. But GoI gives a subsidy of Rs 0.45 per unit making the total price received by Bhutan as Rs 2 per unit. Now the just negotiated hike will mean major raise in this subsidy amount.
As a part of the initiative of Indo- Bhutan cooperation, the 336MW Chukha hydropower project was the first mega hydropower unit built with financial and technical assistance from India. The project was fully funded by GoI, with 60 percent as grant and 40 percent as loan at an interest rate of 5 percent.
Following signing of an agreement to build the project over the Wangchu river on March 23, 1974, Chukha was fully commissioned in August 22, 1988 at an estimated cost of Rs 2,465 million and running at present with average production of 180 Crore units annually. Its loan was liquidated on December 31, 2007.
This article first appeared here