iii. Issues related to the import of foreign workers and development of professionalism

In the current situation, not only are the Engineers looked at with disdain, but blue collar jobs especially in the construction sector has never been considered as an attractive or a secure profession by the Bhutanese. While there are numerous reasons involving technological, environmental, social and economic factors leading to such a situation, this widespread attitude perhaps is one of the main reasons for the Industry not being able to harness adequate skilled and unskilled workers thereby leading to the import of large numbers of foreign professionals and workers.

The following are some of the measures proposed towards resolving the issues noted above. The recommendations have been largely limited to critical policy and management issues of Institutional and Human Resource development aspects.

It should be mandatory for contracting firms to have professional institutional management and development plans including; specific plans for manpower recruitment & training, investment plans for institutional development, skills assurance procedures etc. The manpower development plan should include the training of managers and proprietors on basic management and contract management skills. Where possible, funds for generic training should be supported by the Government either in full or in part, as the situation would allow.

The development of a motivated and competent human resource is contingent to the development of a vibrant Construction Industry. However the dwindling image and diminishing motivation among the professionals and skilled workers has not been a move in the right direction especially when there is the growing need for highly motivated professionals and skilled workers in the Industry. Due to the overall shortage of professionals and skilled personnel in the market, the distribution of such resources among the sectors has been ineffective and inadequate in the process limiting the impact and benefit of their contributions.

As an important move to promote the required collective recognition of the profession, standardization of Engineers’ professional value, effective dissemination of information and to increase the weightage of Engineers’ collective representation, the proposed body of Engineers’ Association should be immediately instituted on priority.

Taking clue from the best practices of private and corporate management system, even within the Government sector, it is important to create an environment that would allow innovation, initiatives and effective sharing of information through improved procedural and management approaches that would promote the spirit of entrepreneurship among its employees. Hence unless some of the following procedures and policies are laid down and implemented diligently i.e. clear delineation of authority and accountability among the employees, organized forums for exchanges of ideas and innovations, competitive assessment procedures etc. the spirit of innovation, motivation and morale will not stand promoted.

One of the aspects which affect the quality and technological progress in the Construction Industry has been the lack of importance attached to the design and planning of most construction projects. Most projects are planned and designed under emergent circumstances and implemented based on the availability of yearly budget release although, the importance of some of these projects would warrant project planning to be carried out over a long period of time.

Under the current situation, the existing institutions responsible for the development of these professionals have neither the mandate nor the obligation to meet the current and projected demands of professionals and skills in the Construction Industry. Their production capacities are mostly guided by the existing Institutional facilities and the development policy framed by their authority.

The quantity of students’ intake at various levels of skills should be assessed and guided by the current and projected demand of human resources in the Country.

1. 
   Introduction
   

1. 
   Bhutan has long identified its hydropower potential estimated at 30,000 MW, as its main economic resource. Even with the current development of only 1,500 MW of the potential, the power sector is estimated to contribute 43% of the national revenues in 2006-07. However, this impressive figure indicates the relatively small contributions of the other sectors rather than the optimal harnessing of this huge renewable natural resource. Meanwhile, the development of other hydropower plants in the region is rapidly leaving behind the Bhutanese hydropower sector unless its development is taken up as a national priority. The SGNH has accordingly identified the accelerated development of the hydropower as one of the thrust areas to generate revenues that will support the long term strategic goals of the country.
   
2. 
   Realizing this urgency, an ambitious target of generating 10,000 MW of electricity by the year 2028 has been set as part of accelerated hydropower development strategy. With accelerated hydropower development strategy, the sector shall contribute Nu. 39 billion to the net annual revenue of the nation by the year 2028. Such contribution will substantially increase GDP over the next twenty years. Such a target, though lofty, shall be achieved through accelerated development strategies outlined in this report and by according the highest development priority.
   
3. 
   The accelerated hydropower development during the next twenty years will require an investment of about Nu. 500 billion; generate employment for about 100,000 workers during the peak construction stage and about 7,400 (6,000 skilled and 1,400 security personnel) employees during the operation and maintenance period thereafter. In addition, the sector will directly promote investments in important infrastructure like roads, bridges, construction of new schools and BHUs and upgradation of several other existing schools and health facilities. The sector will facilitate the growth of other sectors; power intensive manufacturing industries, service industries (recreational facilities around the reservoir schemes), navigation waterways (Sunkosh), and facilitate the growth of special economic zones in the country. This report presents the necessary strategy and the implementation plans to achieve the above target of accelerated hydropower development by the year 2028.
   
4. 
   The above target of 10,000 MW by 2028 is a two-fold increment of the Power System Master Plan’s (PSMP) target of 5,000 MW by 2022. This increment in target is based on the additional time till 2028 (6 years) for project development, changing power market scenario, and the proposal of major storage schemes like Sunkosh with 4,060 MW capacity. However, the main factor for achieving the above targets hinges on first of all the sector being able to mobilize all the resources through the various models proposed for project development and also the institutional capacity being strengthened and empowered with adequate manpower and the authority to take timely decisions and on the government creating the right enabling environment for the sector.
   
5. 
   The mobilization of the capital expenditure and its disbursement of almost Nu. 20-50 billion per annum indicates an expenditure in the power sector equal to the current GDP (Nu. 46 billion for 2006-2007) or more than the current national debt of Nu. 26.00 billion (December 2006). Pending the mobilization of the required fund and the institutional strengthening, the above target might not be met unless the accelerated hydropower development is accorded the highest national development priority.
   
6. 
   This report presents the situational analysis of the sector with achievements till date, builds a case for accelerated hydropower development, and presents the strategies and the implementation schedules for translating these strategies into actions. It also establishes the linkages with the NSP-2008 and SKILLS-2008 with details on projection of manpower requirement in the sector. A section is also devoted to the discussion on the minimum threshold levels for hydropower pricing with India which is our main market, and the concept of Independent Power Producers (IPP) since private sector investment would be highly crucial to achieving the above targets. While the PSMP (March 2004) has provided the basis for the project listing and technical references, the focus of this report is on the changing power market scenario in the region and Bhutan’s strategic positioning of her competitive advantage in hydro development and her renewed confidence and ambition in accelerating economic development through export of power to India.
   

2. 
   Situation Analysis
   
   1. 
      Today, Bhutan’s hydroelectricity sector contributes about 43% of the national revenue (2006-2007) which amounts to Nu. 6.902 billion²⁰. However, the development of this existing capacity (1,488 MW) has taken over 20 years with multi-dimensional challenges faced by the sector.
      
   2. 
      The draft energy policy highlights the complexities in the management of supply and demand for energy and difficulties in rural electrification as being some of the most daunting challenges faced by the power sector. Although Bhutan is a net power exporter, it experiences deficit of firm power in the lean season²¹ and has to resort to import of power from India. Bhutan has exported electricity worth almost Nu. 2.21 billion in 2005-06 but imported about Nu. 2 billion worth of other sources of energy in the form of fossil fuels and petroleum products.
      
   3. 
      Although electricity is exported as surplus generation, half the population of Bhutan does not have access to electricity or other modern forms of energy services. Use of traditional bio-mass (fuel wood) still dominates as the main source of energy in Bhutan for the rural population. The sector’s vision of “Electricity for All” by 2020 thus requires investment of over US$ 100 million over the next 15 years. On the other hand, the real impact of rural electrification has not yet been assessed.
      
   4. 
      While richer countries like US and Australia have refused being signatory to Kyoto Protocol, Bhutan has signed the Protocol and has steadfastly sacrificed developmental opportunities to maintain her commitment towards environmental conservation²². Although hydropower is being touted as the main revenue earner for the nation, recently it has fallen behind the trade sector²³. Therefore, the current situation calls for a renewed urgency in providing extra impetus to the development of hydropower sector to achieve energy security, enhance revenue earnings and fulfill the needs of Bhutan’s integrated development as per the SGNH.
      
   5. 
      The energy sector has achieved an installed capacity of 1,488 MW as of 2006-07 and has set a target to achieve a minimum export of 5,000 MW by 2020. The sector has prepared the following plans and studies and these studies provide for a solid foundation to embark on an accelerated development path:
      

• 
  The Power System Master Plan (1993 with update in March 2004).
  
• 
  The Integrated Energy Management Master Plan (IEMMP-2007)
  
• 
  The Rural Electrification Master Plan (2005)
  
• 
  Urban Electrification Master Plan (BPC-2006)
  
• 
  Transmission Network Plans (BPC-2006)
  
• 
  The experiences of Chhukha and Tala Hydropower projects
  
• 
  Agreement between the Royal Government of Bhutan and the Government of the Republic of India concerning cooperation in the field of Hydroelectric Power – signed on 28^th July, 2006 (Annexure 2.2).
  
• 
  The Electricity Act-2001 providing the legal basis for restructuring and regulating electricity industry, and enabling private sector participation.
  

6. 
   The Power System Master Plan
   
   1. 
      The Power System Master Plan (PSMP) prepared by the Department of Energy (DoE) and updated in 2003-04 is a comprehensive document on the power system with details on the project rankings, implementation schedules and domestic market analysis. The document is still the most reliable reference for technical details on project profiles and most of the information in it is still relevant. The changed circumstances, market reforms and renewed and urgent current focus on accelerated development are discussed under topics like power pricing, enabling environment and integration with the development of other infrastructure works.
      
   2. 
      The PSMP has identified the development of seven projects with a total investment of about US$ 4.00 billion by the year 2022. The revised target has been set at 10,000 MW since mobilizing resources for these projects would have required the same level of efforts. Details on the project transmission networks, domestic power demand scenario and environmental and social impact assessments have been adequately deliberated in the PSMP. However, the document does not address the main issues of development models, mobilization of resources, and IPP potential. There is also very little discussion on institutional strengthening that would be required for the sector in order to handle the volume of works associated with the accelerated hydro development. The following seven projects have already been included for formulation and development during 2003-2022 in the PSMP.
      

Table 2.1: Projects Identified for Implementation by 2022 in the PSMP.