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Bhutan – known for prioritizing and measuring Gross National Happiness (GNH) rather than Gross Domestic Product (GDP) – is located north of India, on the Himalayas’ eastern edge. With a population that is barely over 700,000, this tiny landlocked country remains relatively isolated to the rest of the world.
Bhutan faces a number of challenges with respect to connectivity and transportation. For example, though there are numerous land border crossing posts between Bhutan and India, the country’s border post in the West (Phuntsholing) continues to handle the country’s lion share of imports and exports (98% and 82%), respectively. Not only does this put significant pressure on one major crossing, but also puts industries and commerce in Eastern Bhutan at a disadvantage due to a lack of ready access to trade routes
Furthermore, while transport and trade infrastructure remain undeveloped, so to are technologies, policies, trade procedures and even trust with trading partners to efficiently and effectively move goods in and out of Bhutan.
Under this current backdrop, the Ministry of Economic Affairs (MoEA), Royal Government of Bhutan (RGB), engaged M.R. Technofin to assess the feasibility of developing a dry port/trade facility in Nganglam (Eastern Bhutan) under a Public-Private Partnership.
Over the course of the assignment, M.R. Technofin worked closely with MoEA and other relevant public and private stakeholders to build a sound technical, commercial and economic case for a facility in Nganglam. Based on consultations, it became abundantly clear that the agriculture sector in the East was stymied by the lack of trade infrastructure and was ripe for a dry port to unlock its potential. Of note, Mountain Hazelnuts – a public-private community partnership with the RBG that supports 5,000 smallholder farmers (with seven million trees) and is located ~85km from the proposed dry port – was ramping up hazelnut production to between 30,000 – 40,000 tonnes per year for export. The entities major concern? Exporting through western Bhutan was simply not economical.
With these key insights in hand, M.R. Technofin planned and designed a dry port in Nganglam with the necessary infrastructure and equipment to handle Bhutan’s agriculture as well as other cargos, generating a forecasted economic internal rate of return that was greater than 25%!