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Pasakha Industrial Estate: then & now

The sight of thick smoke clouds over grey, metal factories; rows of large sheds, numerous shift workers toiling round the clock as huge lorries enter and leave the precinct loading or dumping loads, is a common feature that sets apart Pasakha industrial estate distinctly from the rest of Chhukha.

Since the first and biggest industrial hub of the country, Pasakha Industrial Estate was established in 1988, it has come a long way.

After the first two biggest plants, Bhutan Ferro Alloys and Bhutan Carbide and Chemicals Limited were established in the early 1990s, more than 20 large and medium scale industries are now housed in the vicinity.

More ferrosilicon industries like Druk Wang Alloys Limited, Ugyen Ferro Alloys Limited, Bhutan Silicon Metals Private Limited and Druk Ferro Alloys Limited have based their manufacturing plants in Pasakha.

Also, other steel industries like Pelden Enterprises and Tashi Metals have made inroads into the estate. Additionally, beverages and coke manufacturing plants have started off.

With an industrial investment of more than Nu 2.6bn since the beginning, Pasakha Industrial Estate is about 17km from Phuentsholing.

These industries have contributed to the government revenue generation acting as the largest employers in the private sector and also being the biggest local market for electricity.

Currently, Pasakha plants employ almost 3,000 nationals and more than 500 non-nationals. Most of the ferrosilicon industries pay millions a month as electricity bill to Bhutan Power Corporation Limited a month.

Following the awakening of the industrial sector, the Association of Bhutanese Industries (ABI) was formed in 2007. A few prominent industrialists and entrepreneurs in the country got together to form an association to address industrial issues in a manner that considers the broad industrial and environmental aspects related to the sector. While the association started functioning imperceptibly in 2007, ABI formally came into being in September 15, 2008 with a permanent office and staff headed by a General Secretary.

The growth of industries at Pasakha has been riddled with challenges leading some companies to close their plants. The erstwhile Kingyal Coke and Chemicals and Bhutan Steel Industries were shut down. Also, challenges like finding an ideal market have resulted in some industries merging and operating with the likes of Lhaki Steel, Pelden Thermex TMT and Druk Iron and Steel, the three major steel manufacturing companies now operating under a single umbrella.

Power tariff has been another challenge for the industries; it dented their profit, claimed industrialists. There was an outcry when the power tariff was revised and increased in October 2013.

Bhutan Electricity Authority (BEA) approved an increase of energy charge to Nu 1.98 per kWh from the then existing Nu 1.79kWh for medium voltage (MV). Demand charge increased to Nu 155 kW per month from the earlier Nu 115kW/month for MV users.

In case of high voltage (HV) users, energy charge increased to Nu 1.67 per kWh in 2013-14-tariff cycle from Nu 1.54 per kWh. Demand charge increased to Nu 130 per kW per month from Nu 105 per kW per month.

In 2000, a flash flood occurred, bringing about much devastation to the industries. It washed away infrastructures and the school as well. An earlier flood in 1996 had washed away tonnes of raw materials and damaged factory premises.

Currently, the bridge over the Bhalujhora River is one major challenge for the industries. The bridge, the only way to transit materials to and from the industries was damaged by last year’s flood and needs immediate attention.

ABI’s General Secretary Jochu Thinley said that the damaged bridge has affected the industries. While the heavy vehicles are routed through the river, the industries are affected because import of raw materials and export of finished goods during summer would be affected incurring heavy losses to the industries.

“We would be happy if the government constructs a bailey bridge immediately,” he said. If the bridge collapses then there would be problems for the staff to commute as most of the employees of Pasakha Industrial Estate reside in Phuentsholing and Jaigaon.

Pasakha is considered an ideal location for mineral-based industries because of the availability of raw materials like quartz, dolomite and limestone from nearby quarries in Pakchina, Kamji, Tintali and Gomtu, less than 100km away. Also, being located at the international border, the transportation of finished products and other imported raw materials are much painless. Most of the products are exported to the Indian and European markets.

Krishna Ghalley from Phuentsholing

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