- It has been estimated that around Nu 442 billion will be required in funds if Bhutan is to generate around 10,406 MW by 2020. The figure is only an initial estimate, not taking into account inflation over the years. "At the current rate of 8 percent inflation, by using simple compound interes,t we can expect it to double within 8-10 years,' said a power official. Tala started at a Nu 14 billion estimate but touched 43 billion at completion. Similarly, Chukha was initially Nu 2.50 billion but became Nu 5.60 billion and Kurichu started at Nu 0.8 billion but became Nu 2.4 billion on completion. Another more potential dangerous area could be a sudden hike in prices of commodities like that of the overnight rise of steel because of the Beijing Olympics. This sudden rise has also pushed up our estimates for the proposed future hydel projects. "We can sustain a gradual inflation, though it may pinch us a bit, but any sudden hike in core construction material like steel will negatively affect a project,' said an official. It was also seen that in all the above past projects the main issue, apart from technical problems, was the long delays. "Each day of delay in Tala cost us around Nu 30 million and, for 10,000 MW, each day of delay could mean Nu 300 million in costs,' said economic affairs minister, Lyonpo Khandu Wangchuk. To avoid these delays, a high powered group of officials from both countries will be set up to fast track procedures and also have strong monitoring of the hydro projects. However, the minister also explained that cost escalations were unavoidable for projects with a genuinely long time period. "In the case of Tala and others, there was a significant time gap in between the report and implementation, which led to cost escalations,' he added. Could these cost escalations affect the viability of the projects? In reply, the minister said that, out of the eight proposed projects, six would be funded bilaterally, where percentages would come into play like 60 percent loan and 40 percent grant. "So, even if there is cost escalation, the project has no actual cap and GoI will meet the commitments on a percentage basis like in Tala,' said the minister. He also said that the government on its part would work to clear all bottlenecks that could lead to any delays. By Tenzing Lamsang