I am truly encouraged by what Mr. Abhay Thakur, Joint Secretary of the Ministry of External Affairs, Governemnt of India told the Kuensel on 4th August, 2015. He is quoted to have said:
“ ……. the revised cost of Nu 93.75B, which the union cabinet approved last month, was justified”.
I am encouraged because if the Government of India feels that the revised cost is justified, then the onus of justification shall be on them. As far as Bhutan is concerned, it cannot be justified that a project estimated at Nu. 35.00 has now escalated to Nu. 93.75 billion. This level of cost over-run throws all calculations to the wind. But if the Big Brother says so, then so it shall be.
I am encouraged because if the Government of India feels that the revised cost is justified, then the onus of justification shall be on them. As far as Bhutan is concerned, it cannot be justified that a project estimated at Nu. 35.00 has now escalated to Nu. 93.75 billion. This level of cost over-run throws all calculations to the wind. But if the Big Brother says so, then so it shall be.
However, his next statement is in the strain of what Mr. R N Khazanchi said about a week back - a curiously twisted logic. Mr. Abhay Thakur is supposed to have said:
“I think we are on right track and we are optimistic that the projects would complete on time with the approval of revised cost”.
Complete on time? I thought the project completion date was further shifted to 2019??? The project was scheduled to be completed in December 2016.
Mr. Abhay Thakur has some more good news for Bhutan. He states:
“….. even after cost escalation is less than Nu 80M per Mega Watt and the PHPA II, after the proposed expected cost escalation would be in the range of Nu 70M per MW. These rates are extremely competitive and anywhere else in South Asia …..”.
Right! While Mr. Abhay may be right in stating that our unit cost of construction is competitive compared to those in the region, what he ignored to tell us is whether our income from those costs will be equally competitive. If not, how does it matter?
Madam Sujata Mehta, Secretary of Ministry of External Affairs, Government of India confirmed that the media report that India has surplus electricity, is untrue. I believe her, 100%. But she left her next statement - half complete:
“There is an inter government agreement which exists that the power generation at these joint projects would be purchased by India."
She failed to tell us at what unit price they will buy the electricity generated from these two doomed projects. Cost+?
The project Puna-I is not all on track. For the moment I don't want to say anything about Puna-II. I am doing some research on it. For now the approval of the revised cost estimate for Puna-I may be a good news, but the project Puna-I cannot be completed at this cost, and most importantly, whether it will ever see the light of the day is a big question mark? More analysis and revelation on Puna-I will emerge. Please keep reading this blog and mine one too at www.kbwakhley.blogspot.com.
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