SA on Hydropower Project – Punatshangchhu - National ...

ROYAL GOVERNMENT OF BHUTANPROSPECTIVE STRATEGIC ASSESSMENT OF:PROPOSED HYDROPOWER PROJECTS ON BASIN-2(WATERSHED OF THE PUNA<strong>SA</strong>NGCHU RIVER)FIGURE2:LOCATIONMAPOFBASIN2ANDSITESOFPROPOSEDHYDROPOWERDEVELOPMENTSITESThelegendforFigure2isdescribedinSection5.5ofthisReport.1GROSS NATIONAL HAPPINESSCOMISSIONNATIONAL ENVIRONMENTCOMMISSIONNATIONAL LAND COMMISSION

PREAMBLEThe Strategic Assessment (<strong>SA</strong>) Report is prepared to identify the widerdevelopment impacts expected from the development of megahydropowerprojects planned for Basin‐2 (the Punasangchu River Basin).The report identifies expected development impacts and introducesmeasures to effectively manage and mitigate forecasted negativeenvironmental, social and economic impacts while introducing measuresto reinforce expected positive impacts expected from the developments.The foundation of the Report is the agreed <strong>SA</strong> Objective and, as such,the report ventilates the Objective into sub‐objectives relative to themesand sectors (Topics) agreed by stakeholders. These cover environmental,social, cultural, economic and global (climate) dimensions.The <strong>SA</strong> Report is the key consultation document detailing the <strong>SA</strong> processand its outcomes. As such, the document is a stand‐alone document thatserves to inform government authorities, stakeholders and the generalpublic.1

COVER NOTEThe attached Strategic Assessment Report has been prepared for:HYDROPOWER DEVELOPMENTS PLANNED FOR BASIN‐2THE GROSS NATIONAL HAPPINESS COMMISSION,The Responsible Authority THE NATIONAL is: ENVIRONMENT COMMISSION,THE NATIONAL LAND COMMISSIONCONTACTMr. SONAM YANGLEY – DIRECTOR GENERAL ‐ NECSMR. KARMA TSHITEEN‐SECRETARY – GNHCDASHO <strong>SA</strong>NGAY KHANDU‐SECRETARY ‐ NLCADDRESSTEL. NoE‐MAILSIGNATUREFOR THE GNHC FOR THE NEC FOE THE NLCDATE2

FIGURE‐2: LOCATION MAP OF BASIN‐2 AND SITES OF PROPOSED HYDROPOWER DEVELOPMENT SITESThe legend for Figure‐2 is described in Section‐5.5 of this Report.4

AREA OF INFLUENCE AND FOCUS AREAS CONSIDERED DURING THE STRATEGIC ASSESSMENTFigure‐3: Area of Influence: Gasa, Punakha, Wangdue‐Phodrang, Dagana, Tsirang, Sarpang Dzongkhags (North to South). The Focus area wasselected as two linked areas: to the North Punakha and Wangdue‐Phodrang and the second in the Southern region of Dagana, Sarpang andTsirang Dzongkhags.5

RISK CATEGORI<strong>SA</strong>TION ................................................................................................... 735.7 MACRO‐ZONATION OF THE NORTH AND SOUTH FOCUS AREAS ............................................ 745.8 DESCRIPTION OF THE EXPECTED IMPACT ON NATIONAL SUSTAINABLE DEVELOPMENTOBJECTIVES (LOCAL, REGIONAL AND NATIONAL) .............................................................. 756. ENVIRONMENTAL AND SOCIO‐ECONOMIC IMPACTS ............................................................ 777. MANAGEMENT AND MITIGATION MEASURES ........................................................ 897.1 PROPOSED MANAGEMENT AND MITIGATION MEASURES (NECES<strong>SA</strong>RY TO ACHIEVE SUB‐OBJECTIVES AND MEET NATIONAL STANDARDS) .............................................................. 897.2 PRIORITISED DEVELOPMENT ACTIONS IN THE AREA OF INFLUENCE ..................................... 1008. INDICATORS AND MONITORING ............................................................................ 1048.1 BENCHMARKING ...................................................................................................... 1048.2 DZONGKHAG AUDITS ................................................................................................. 1069. RECOMMENDATIONS ............................................................................................ 10710. NEXT STEPS ............................................................................................................ 10911. REFERENCES........................................................................................................... 11112. ANNEXES ................................................................................................................ 11312.1 ANNEX‐1: THE STRATEGIC ASSESSMENT PROCESS ................................................ 114A: KEY STAGES IN THE STRATEGIC ASSESSMENT PROCESS ........................................................... 114SCREENING ....................................................................................................................... 115SCOPING 116IDENTIFICATION, SELECTION AND ASSESSMENT OF ALTERNATIVES ............................................... 117SELECTION OF PREFERRED ALTERNATIVES ............................................................................... 117IMPACT EVALUATION .......................................................................................................... 118SETTING PLANNING AND DEVELOPMENT PRIORITIES ................................................................. 118INTRODUCING GNH MANAGEMENT AND MITIGATION MEASURES ............................................... 118DEVELOPMENT CONDITIONALITY .......................................................................................... 119B: THE STRATEGIC ASSESSMENT REPORT ................................................................................ 119C: TECHNICAL REVIEW ........................................................................................................ 120D: ADOPTION, ENDORSEMENT AND RECORD OF DECISION ......................................................... 121E: IMPLEMENTATION AND MONITORING ................................................................................ 121F: REVIEW ........................................................................................................................ 12212.2 ANNEX‐2: MACROZONING OF SELECTED FOCUS AREAS ........................................ 12312.3 ANNEX‐3: LEGAL FRAMEWORK SUPPORTING THE STRATEGIC ASSESSMENT ...... 16012.4 ANNEX‐4: LIST OF PARTICIPANTS (WORKSHOP‐1 AND 2) ....................................... 16812.5 ANNEX‐5: THE (ZERO OPTION) SCENARIO ............................................................. 17112.6 ANNEX‐6: PROCESS ACTION PLAN ....................................................................... 1987

CSRDANIDADECDoEDoFDoRDEODRMDRREFRCEIAFYPGDPGISGNHGNHCGLOFGoIICDPIEEJDMPLDCLLDCMDGMEAMSMEMoAMoEAMoEMoFMoHMoHCAMoWHSMWNBCNECNECSNSBNSDSNSPNuNU<strong>SA</strong>CRONYMSCorporate Social ResponsibilityDanish International Development AssistanceDistrict Environmental CommitteesDepartment of EnergyDepartment of ForestryDepartment of RoadsDistrict Environmental OfficerDisaster Risk ManagementDisaster Risk ReductionEnvironment Friendly Road ConstructionEnvironment Impact AssessmentFive Year PlanGross Domestic ProductGeographic Information SystemGross National HappinessGross National Happiness CommissionGlacial Lake Outburst FloodGovernment of IndiaIntegrated Conservation and Development ProgrammeInitial Environment EvaluationJigme Dorji National ParkLeast Developed CountryLandlocked ‐ LDCMillennium Development GoalsMultilateral Environmental AgreementMicro, Small and Medium EnterprisesMinistry of AgricultureMinistry of Economic AffairsMinistry of EducationMinistry of FinanceMinistry of HealthMinistry of Home and Cultural AffairsMinistry of Works and Human SettlementMegawattNational biodiversity CentreNational Environment CommissionNational Environment Commission SecretariatNational Statistics Bureau of BhutanNational sustainable Development StrategyNational Strategic PlanNgultrumNational Urbanization Strategy8

OECDRBCRBMRGoBRNRRSPN<strong>SA</strong><strong>SA</strong>ARCSEASDWWFOrganization for Economic Cooperation and DevelopmentRiver Basin CommitteeResults Based ManagementRoyal Government of BhutanRenewable Natural ResourceRoyal Society for Protection of NatureStrategic AssessmentSouth Asian Association for Regional CooperationStrategic Environmental AssessmentSustainable DevelopmentWorld Wide Fund for Nature9

ACKNOWLEDGEMENTSThe SEA/<strong>SA</strong> process by definition is an issues‐driven participative approach tothe environmental assessment of plans, policies, programmes developmentproposals or complex projects. In this regard, the contributions of theparticipants at the two workshops must be acknowledged, as their inputswere invaluable to the SEA exercises. It must also be appreciated that theSEA report below is an output of their hard work at the two weeklongworkshops in Wangdue and Paro. The list of participants at the workshops isattached to the report and we would like to acknowledge them as availablenational capacity for future SEAs in Bhutan. The participants included adiverse mix of capacities (from Gewog Administrative Officers to DashoDzongdags to Senior Officers from stakeholder agencies) who discussedissues candidly and deliberated long hours to emerge with workablesolutions and alternatives aimed at mitigating the negative environmentalimpacts of the proposed development while at the same time enhancingsocio‐economic opportunities for the people living in the area of influence.We would like to acknowledge their hard work as the primary input to thisSEA.Acknowledgements are also due to Mr. Michael Pearson for his dedicationand patience as Technical Expert for the SEA exercise. The advantage of thisSEA is that the consultants introduced the technical aspects of the exerciseand then only guided the workshop participants through the various stagesof the process. Therefore, the strength of this SEA is that it is a true nationalendeavour. Mr. Michael Pearson’s patience in sharing his experience andguiding the participants without overly intervening in the process wasremarkable.We would also like to acknowledge Mr. Tandin Dorji for his services as localconsultant. Mr. Tandin Dorji not only participated and contributed to theprocess but also gained valuable experience and know‐how about the SEAprocess through his association with the technical expert. We are hopefulthat he will continue to contribute as a national resource for future SEAs inBhutan.Acknowledgements are also due to the following officers from the NationalEnvironment Commission: Mr. Thinley Dorji who coordinated the workshops;Mr. Tshewang Dorji who managed the process intermittently while alsoplaying a vital part in the SEA workshops; Mr. Tshewang Chaskar for all theadministrative and logistical arrangements; Mrs. Kesang Dema for takingcare of the financial aspects of the project; Mrs. Pema Lhazom for taking careof the secretarial needs of the project; and Mr. Karma Tshering for managingthe entire process.We would also like to take this opportunity to express our gratitude to DashoNado Rinchhen, who as Head of the NEC then, provided much guidance and10

impetus to entire process. Without his encouragement and motivation, itwould not have been possible to gather such a diversity of experts for thetwo SEA workshops. Our acknowledgements also go out to Dasho Paljor J.Dorji, Advisor to the National Environment Commission, for gracing theopening of the SEA workshops and for inspiring the participants to input theirexperiences in the overall exercise. We would also like to acknowledge Mr.Sonam Yangley, Director General, NEC, for ensuring the continuity of the SEAprocess through the discussion of the report at the national level.We would also like to acknowledge the Gross National HappinessCommission (GNHC) and the National Land Commission (NLC) for theircooperation in this endeavour. We want to highlight that these two partneragencies play strategic roles in the SEA process and the spirit of cooperationextended for this SEA was commendable. Acknowledgements are also due tothe NLC for providing the maps for the SEA exercises.Lastly, we would like to acknowledge and express our gratitude to DANIDAfor providing the financial assistance to undertake the SEA. We remainconfident that this SEA will contribute to the integration of environmentalconsiderations into Policies, Plans and Programmes of the Royal Governmentof Bhutan while evaluating their inter‐linkages with economic and socialconsiderations.11

EXECUTIVE SUMMARYThis Report describes the process, outcome, and recommendations of aStrategic Assessment to identify and consider the wider developmentimpacts (Environmental, socio‐economic and GNH) of planned hydropowerinvestments in Basin‐2 and particularly on the Punasangchu and DagachuRivers. The planned hydropower development projects on Basin‐2 Rivershave been inscribed and prioritised in the Tenth Five Year Plan (2008‐2013).The point of departure for this Strategic Assessment was agreement (amongstakeholders) that each hydropower project is an agent of development andchange. As such, the cumulative development impact of all plannedhydropower projects are expected to be significant and transformative atlocal, regional, national and trans‐national levels.This Report describes the Strategic Assessment Process carried out toconsider the best possible development alternative(s) targeting two selectedfocus areas where development catalysed by the hydropower projects areexpected to concentrate. A northern focal area considers development in anarea extending from Gasa and Punakha Dzongkhags to the north and southto the site of the Punasangchu‐1 hydropower project. A southern focal areaconsiders forecasted development of Lhamoizingka, southern DaganaDzongkhag, Western Sarpang and Tsirang Dzongkhags. The Report considersthe environmental and socio‐economic impacts and benefits of eachproposed development alternative and details consultative and participatorymethods used to select a preferred alternative, identify negative impactsthat could be expected from the selected alternative(s) and proposesmanagement and mitigation measures necessary to offset negative impactsand optimise overall development benefits accrued to the selected area ofinfluence (Figure‐2) the focus areas and to the Kingdom of Bhutan.The Strategic Assessment of planned hydropower developments on Basin‐2Rivers is aligned to Article 5 of the Constitution of the Kingdom of Bhutan(2008), The National Environment Protection Act of Bhutan (2007), theRegulations for the Environmental Clearance of Projects and the Regulationson Strategic Environmental Assessment (2002).The rationale of this Strategic Assessment was to:• Introduce a mechanism to fully consider development consequencesand impacts of planned hydropower developments on Basin‐2 Riversover a 20‐year temporal framework;• Ensure that potential negative impacts and risks expected frominduced development and future investments catalysed by thehydropower projects have been identified and fully considered and12

inform development planning of both the focus areas and theselected area of influence;• Consider the cumulative effects of the proposed policy, plan,programme or development proposal (in this case the plannedhydropower investments) on a local, sectoral, regional, national ortrans‐national perspective.• Propose management and mitigation measures to minimise theenvironmental and socio‐economic consequences of identifiednegative impacts;• Select development alternatives that best meet the present andfuture needs of affected Dzongkhags and their people;• Support development planning and decision/making in the focusareas, Dzongkhags and the Area of Influence that are affected directlyor indirectly by hydropower development projects (mega‐projects).The Strategic Assessment Process:In 2002, the National Environment Commission enacted its Regulations onStrategic Environmental Assessment of Policies, Plans and Programmes asper the articles and provisions of the Environmental Assessment Act of 2000.These Regulations were not put into practice given that Line Ministriesconsidered that the enacted Regulations would lead to delays in Governmentprocesses and therefore impede development. Since then, the Regulationshave been kept on standby but agreement was reached that they would beactivated and applied, as necessary, to proposed “mega‐projects” of nationalsignificance. As such, the hydropower mega‐projects on the Punasangchuand Dagachu Rivers meet agreed assessment criteria.The present Strategic Assessment was tailored to the specific needs of theRoyal Government of Bhutan represented by: The National EnvironmentCommission and Secretariat; the Gross National Happiness Commission; theNational Land Commission; Stakeholder Dzongkhags and key Line Ministries.The methods used were a composite of: The OECD/DAC methodology asdescribed in their Good Practice Guidance (2006); the United NationsUniversity Course Modules on SEA of 2006; GTZ‐SEA guidance; Danidaguidance on SEA applications; the Experience of the Scottish Executivedetailed in their SEA Toolkit (2006); the guidance provided by theInternational Association of Impact Assessment (IAIA) and personal <strong>SA</strong>application experience of the Process Facilitator (Michael P. Pearson PhD.Danida Technical Advisor to NECS)13

considered during the Assessment were agreed by process stakeholders anda framework for the introduction of additional stakeholder alternatives wasprepared; Information needs and sources of information were identified;Existing sector plans specific to the spatial context of the assessment wereidentified and requested; A steering or platform group (the Trainingmaterials necessary to the Assessment Phase were prepared.This stage of the Assessment process was carried out through site visits toconcerned Dzongkhags, discussions with Dzongdags, DzongkhagEnvironmental Officers, and officers from concerned central administrations.In addition, existing information sources were identified from the Ministry ofAgriculture, The Ministry of Works and Human Settlement, GNHC, the NECS,the NLC, Ministry of Economic Affairs and others.Process design was also detailed during the Scoping stage and later validatedby Process participants during the first Workshop.IDENTIFICATION AND ASSESSMENT OF ALTERNATIVES: Alternatives to beconsidered and analysed during the Process were identified and selected byProcess participants/stakeholders. All alternatives proposed by the floorduring plenary sessions were initially retained. Participants reduced thenumber of proposed alternatives through discussion and vote. Only thoseAlternatives retained were analysed through scenario construction, riskanalysis and expert judgement.SELECTION OF THE PREFERRED ALTERNATIVE: On completion of the prospectiveanalysis through scenario construction and expert judgement, participantspresented their analysis to the floor in a plenary session. A plenary discussionand debate on the outcomes of each analysis led to the selection of apreferred alternative(s).IMPACT IDENTIFICATION AND ASSESSMENT: The technical group /processparticipants were then requested to detail each development action likely tocomprise the preferred alternative over the temporal and geographic scopeof the Assessment.Environmental, social, economic and GNH impacts (point source andcumulative) expected from each development action were then identifiedtogether with requisite management and mitigation necessary to offset thepredicted effect.Projected development was then plotted as polygons on maps and Google‐Earth images. Though this is a low resolution mapping exercise, it wassufficient to address issues of compatibility and spatial relationships both inthe focal area and the identified area of influence.15

THE STRATEGIC ENVIRONMENTAL ASSESSMENT REPORT: The results of theAssessment Phase are complied to prepare this Draft SEA Report. The Reportis then subjected to a further stakeholder consultation and validationprocedure and adjusted as necessary to prepare the Final SEA Report.ADOPTION AND RECORD OF DECISION: Once the Report has been adjusted andvalidated by the joint Commissions, a Statement of Endorsement is preparedand submitted by the joint Commissions to their Chairman.The Statement of Endorsement is an official document that serves to instructcentral and lower tiers of government to introduce mainstreamed Processresults and outcomes to their future plans. It also instructs government toact on Process recommendations.PROCESS ORGANI<strong>SA</strong>TION:The Strategic Assessment was initiated by the National EnvironmentCommission Secretariat and led jointly by the NEC, the GNHC and the NLC onbehalf of the GNHC. The Strategic Assessment was organized as follows:The Joint Commissions lead the process and comment on the results of theTechnical Group responsible for contributing towards the successfulconclusion of the different stages of the Process. The Joint Commissionsreceive the Strategic Assessment Report, provide comments and finallyrecommend endorsement of the Report.The Endorsed Report is then delivered to concerned Dzongkhags withinstructions to introduce mainstreamed outcomes to their futuredevelopment plans.A Technical Group comprising representatives of all stakeholder groups(Central Government, Concerned Dzongkhags, Geogs, Experts, the GeneralPublic, NGO’s, Associations, etc) was called to participate in the process. TheTechnical Group was provided with training and support to enable them tocontribute effectively to the process.The Technical Group was asked to participate in two consultative workshopsduring which objectives were agreed, alternatives identified and selected,impact assessment was carried out and management/mitigation measuresidentified and outcome recommendations drafted. As such, the TechnicalGroup was critical and key to the successful outcome of the Process.PROCESS OBJECTIVE AND SUB‐OBJECTIVES:The Objective of the <strong>SA</strong> was determined through stakeholder discussionsduring the Scoping Stage of the SEA. Stakeholders approved the Objectiveduring the 1 st Stakeholder Workshop held in Wangdue from the 31 st of16

August to the 5 th of September 2009. Sub‐objectives were derived from theObjective and formulated to address the critical themes to be addressedduring the Assessment Process.THE OBJECTIVE OF THE STRATEGIC ASSESSMENT:Process Stakeholders agreed that the Objective of the Strategic Assessmentto assess the overall development impacts expected from hydropowerinvestments on Basin‐2 would be:“To analyse through relevant stakeholder and public participation, anumber of alternative development scenarios expected from investmentsin Projects on Basin II to enable the selection of optimal solutionsdelivering maximum sustainable (GNH) benefits of Bhutan while minimizingthe cumulative impacts of that development”.THE SUB‐OBJECTIVES OF THE ASSESSMENT PROPOSED BY PROCESS STAKEHOLDERS:As noted previously, sub‐objectives were formulated relative to the principaltopics and themes to be considered during the assessment. These have beenextracted from section 4.4 of the Report and are presented below:1. Climate Change: Development planning and associated investments in thearea of influence of Basin‐2 hydropower investments are directed andplanned taking into consideration risks and cumulative impacts expectedfrom climate change and systematically introducing mitigation andmanagement measures.2. Watersheds and Catchment Basins: Catchment basins and water suppliesare mapped, inventoried and effectively managed to ensure continueddelivery of critical ecosystem services to downstream users and the State.3. Economic Development: Economic and urban development of Dzongkhagsand Geogs directly affected by investment in Basin‐2 hydropowerdevelopments is planned, coherent, sustainable and, as such, does notimpact negatively on the population, the environment and conserves intergenerationalequity.4. Tourism, Eco‐tourism and Tourism Services: Development of tourismassets and opportunities in the area of influence of Basin‐2 hydropowerdevelopments are identified, zoned, promoted, developed sustainably andcontribute to national, regional and local development plans (within theprinciples of GNH).5. Environment (Pollution control, Waste Management, WaterManagement, Biodiversity and Natural Assets): Investments anddevelopments in the Basin‐2 area are integrated into the natural17

environment / Landscape by giving a high priority on the quality andlimitations of ecosystems in the area of influence and minimizing negativeenvironmental impacts.Biodiversity inventoried in the area of influence of planned Basin‐2hydropower investments is enhanced and actions leading to irreversiblelosses are prevented.6. Social Infrastructure: Improving the livelihood of the people by providingbetter heath services, education, employment opportunities, recreationalfacilities, better communication and financial services.7. Agriculture and Forests: Ensure minimum loss of agricultural land andGovernment Reserve Forest lands while ensuring an adequate supply ofland for all future demand as per the relevant laws of the Kingdom.8. Culture and Heritage:A. Cultural heritage values and sites are protected and promoted as social,historical and economic assets.B. Cultural heritage and cultural fabric in the areas of influence is notaffected by the development and migration/displacement haveminimum negative impacts9. Security: Measures to enhance existing security relationships withneighbour states to ensure that security risks do not erode economic/socialdevelopment options and potential.ALTERNATIVE DEVELOPMENT OPTIONS CONSIDERED:Alternative‐1: Wangdue‐Punakha (including Gasa) develops as a tourism aswell as services hub. Southern focal area develops as a tourismand industrial area.Alternative‐2: The Wangdue Punakha focal area develops as a manufacturingcentre. The southern focal area is developed for agroindustriesand trans‐boundary trade centres.Alternative‐3: Wangdue‐Punakha develops as a major urban centre withinternational and national standard services in tourism and afocus on East‐West South distribution hub. The southern areais developed as an entry port and SEZ/Industrial area.Alternative‐4: Wangdue‐Punakha services international and national tourismand is an East‐West‐South trade and distribution hub. TheSouthern focal area is developed as a Special Economic zoneand industrial area.18

Descriptions for each of the proposed alternatives are provided in section 5.2of the Report.THE PREFERRED ALTERNATIVE: The preferred alternative selected by Processparticipants was the result of discussion and analysis of all proposedalternatives. Stakeholders agreed to merge Alternatives 3 and 4 to formulatetheir preferred development option. As such, the preferred alternative asformulated by Process stakeholders is as follows:PREFERRED ALTERNATIVE (Merged Alternatives 3 and 4)WANGDUE‐PUNAKHA AND GA<strong>SA</strong> DEVELOP INTERNATIONAL ANDNATIONAL STANDARD SERVICES IN TOURISM WITH WANGDUE‐PUNAKHA AS A MAJOR URBAN CENTRE (CONURBATION).THE SOUTHERN FOCAL AREA DEVELOPS AS A TOURISM ANDINDUSTRIAL AREA, SPECIAL ECONOMIC ZONE AND ENTRY PORT.REJECTED ALTERNATIVES AND RATIONALE FOR REJECTION: Rationale forselection and rejection of the various proposed alternatives are presentedbelow. The text has been extracted from Section 5.3 of the Report.Alternative‐1: Wangdue‐Punakha (including Gasa) develops as a tourism aswell as services hub. Southern focal area develops as a tourismand industrial area.Process participants rejected the alternative given that it did not includesufficient elements to fully capitalise on development opportunities in boththe focal areas and the overall area of influence considered in thisassessment.Participants also considered that the alternative was missing criticalconnectivity to external and internal markets provided by the establishmentof a “dry port” at Lhamoizingka (Alternative‐3).Alternative‐2: Wangdue‐Punakha is developed as a light industry andmanufacturing area. The southern focal area is developed foragro‐industries and trans‐boundary trade centres.Process participants rejected the alternative on the basis that it did notconsider that the attributes and comparative advantages of the area wouldbe best served if development focused solely on industry and manufacturing.Participants considered the alternative missed the tourism dimension.Alternative‐3: Wangdue‐Punakha develops as a major urban centre withinternational and national standard services in tourism and a19

focus on East‐West South distribution hub. The southern areais developed as an entry port and SEZ/Industrial area.The Alternative was retained and merged with Alternative‐4 below toelaborate the preferred alternative detailed in section 5.4 of this report.Participants considered that Wangdue‐Phodrang and Punakha would mergeinto a large urban area within the 20‐year temporal framework of theassessment.Participants also considered that establishment of a “dry port” inLhamozingkha (Kalikhola) would be likely within the temporal framework ofthe assessment. Furthermore, participants considered that a “dry port”would significantly enhance economic development opportunities of thecentral Dzongkhags (the area of influence).Alternative‐4: Wangdue‐Punakha services international and national tourismand is an East‐West‐South trade and distribution hub. TheSouthern focal area is developed as a Special Economic zoneand industrial area.Process participants chose to retain this alternative and voted to mergeAltrnative‐4 to Alternative‐3.The merged preferred alternative is detailed below in section 5.4 of thisReport.THE PRINCIPAL FORECASTED NEGATIVE IMPACTS EXPECTED FROM THE PREFERREDALTERNATIVE:Process participants/stakeholders considered the preferred alternativerelative to the development expected from it. As such they characterisednegative impacts relative to broad scale development foci. These included:Urban expansion: The development scenario foresees rapid expansion of theWangdue‐Punakha urban areas and gradual expansion Lhamoizingka in linewith the establishment of a Special Economic Zone, Industrial Estates andexpanded adjacent agricultural areas. Likewise, the preferred developmentoption forecasts expansion of Tsirang, Sarpang, Gelephu, Damphu and Daga.Though urban growth is forecast in all existing urban areas, the principalexpansion will be in Wangdue‐Punakha that will absorb all villages betweenPunakha and Wangdue and Lhamoizingka during the latter stages of the 20‐year temporal framework.Expansion is expected to generate significant volumes of solid waste andwastewaters in line with increased commercial activities and increasingpopulation as employment generation from tourism, service, and light20

manufacturing industries becomes apparent over the 20‐year temporalframework of the Assessment.Expansion will also result in a de‐facto increase in land transformation thatwill call for conversion of government reserve forests and agricultural land inboth the north and south focal areas. Resettlement of existing populations islikely and will be required over the 20‐year temporal framework of theAssessment. Stakeholders also considered that forecasted urban expansionand population growth would result in significant depletion of naturalresources (aggregates, stone, wood products, etc.) as demand for buildingmaterials increased and that extraction could lead to alteration of existinglandscape values.Stakeholders considered urban expansion would lead to an increasedincidence of water pollution and contamination of potable water sources. Inaddition to these impacts, stakeholders considered that urban expansionwould also result in increased air pollution, noise pollution, depletion ofnatural resources, increased incidence of communicable diseases andprevalence of HIV/AIDS.Tourism Sector: The preferred alternative forecasts a significant expansion intourism facilities, tourism support services and infrastructures in both thenorthern focal area concentrated around the Punakha‐Wangdue conurbationand the southern focal area concentrated in Lhamoizingka, the periphery ofthe Phibsoo Wildlife Sanctuary and the shorelines of the Sunkosh reservoirs.While expansion of the tourism sector will enhance environmentalmanagement throughout the area of influence and lead to increasedemployment/income generation, it is also foreseen that the construction andoperation of tourism facilities could also result in significant negativeenvironmental and socio‐economic impacts that will demand proactive andcontinuous management and mitigation.Negative impacts identified by Process stakeholders included: a significantvolume of solid wastes and spoils generated during construction and thenoperation of tourism facilities; Increased water consumption and generationof wastewater requiring treatment; possible contamination of ground waterpotable water supplies; land transformation of depletion of critical naturalresources; possible increased air pollution and increased incidence ofcommunicable diseases.Transport Sector: Process participants forecast a rapid expansion oftransport infrastructure over the 20‐year temporal framework of theassessment. These included: Construction of a trunk road (aligned on theeastern banks of the Punasangchu River to Sunkosh Bridge) linkingLhamoizingka to Wangdue‐Punakha‐Thimphu and the Eastern Dzongkhags;Expansion of the feeder road and farm road networks throughout the area ofinfluence; Construction of a road tunnel linking Wangdue‐Punakha toThimphu; Development of water‐based transport and ferry crossings on and21

across the Sunkosh reservoirs; Construction of a regional airport atLhamoizingka and construction of a trans‐Bhutan railway (aligned parallel tothe border with India) and linking Sibsoo (Samtse Dzongkhag) to Jampani(Trashigang Dzongkhag).Identified negative impacts included: Generation of spoils requiring adequatedisposal; Land transformation; depletion and fragmentation of naturalresources and critical ecosystems/habitats; pollution of groundwatersources, increased emissions resulting in localised air pollution; accidentalspillage of fuels and oils; illegal dumping of transport wastes includinghydrocarbons; Pollution of surface waters and potable water sources; alteredbiodiversity inventories; ribbon development adjacent to constructedinfrastructures; increased prevalence of HIV/AIDS.Agriculture and Fisheries Sector: Process stakeholders considered that thepreferred alternative would lead to expansion and diversification ofagricultural production in the area of influence. They also forecast asignificant increase in commercial farming practices and expansion of agrobasedindustrial output. Construction of the Sunkosh Reservoirs could alsosee growth of the fisheries sector through the establishment of commercialand artisanal fish farms on, or adjacent to the reservoirs.Negative impacts expected from sector growth and development couldinclude: Significant demand for agricultural land and expansion of ruralsettlements would lead to increased transformation of existing governmentreserve forests; Deforestation; Fragmentation of critical habitats; Increasedbank erosion throughout the basin leading to increased sediment loads, andimpacted riverine biodiversity; Pollution of rivers, watercourses, groundwater and near surface water supplies resulting from increased use offertilizers and pesticides and depleted biodiversity inventories.Industrial Sector: Negative impacts forecast for the Industrial Sectorincluded: Increased production of solid waste that could includecontaminated waste, organic waste (from agro‐Industries and abattoirs;Wastewater requiring special treatment to remove toxic materials and heavymetals; increased production of gaseous emissions; Noise pollution in thevicinity of industrial facilities; Depletion of natural resources; naturalresource and habitat fragmentation; Cultural dilution and increasedvandalism of cultural heritage sites; Increased incidence of communicablediseases and HIV/AIDS; increased rural migration and a concomitantdepletion of rural communities and available workforce.Mining Sector (Mines and Quarries): Process participants agreed thatimproved access infrastructures in the area of influence and expansion ofurban areas, light industries, manufacturing industries and tourism wouldlead to increased mineral exploration and eventual exploitation.22

Identified negative impacts included: Degradation of natural resource andbiodiversity inventories; Significant increase in the production of spoilsrequiring adequate and non‐impacting disposal; Fragmentation of forestresources and land transformation further depleting government reserveforest inventories; pollution of surface waters through increasedsedimentation, fuel and hydrocarbon spills, and dumping of toxic materials;Cultural dilution and fragmentation of rural communities.Energy Sector: Negative impacts expected from this sector were attributedto increasing population and settlement in the area of influence (theeconomic drawing factor of the projects). Impacts will include but not belimited to: Expanding urban areas; investment in service based industries tosupport the hydropower sector (Garages and repair facilities; Die‐casting andsmall parts production; cleaning and laundry services; catering services;Financial Services; vehicle sales and rentals; Recreational Services; etc.);increased import and consumption of packaged domestic goods; increasingdemand for water; increasing pressure on existing services and utilities; Landtake for hydro related settlements, transmission lines and electricitydistribution networks; depletion of natural resources; increased incidence ofwater, air and soil pollution; increased solid waste and waste watergeneration; cultural dilution and erosion in both urban and rural areas;increased and unstoppable rural to urban migration.Health Sector and Public Health: Apart from land transformation for theconstruction and expansion of health facilities throughout the area ofinfluence, Process participants considered that the principal negativeimpacts that could be expected from the sector were: Increased productionof contaminated hospital waste requiring specific disposal methods:Contaminated wastewater and sharps requiring special disposal; Increasedincidence of communicable diseases and HIV/AIDS as population densityincreases in areas serviced by the infrastructure.Finance Sector: increased access to funds and increasing household incomescould result in depletion of natural resources in line with increasing demandfrom the population (forest and non‐forest products, building materials,land, etc.); increased volumes of waste generated in line with increasingwealth of the population.Natural Resources: Impact included: Localised depletion as a result ifincreased demand from the expanding population and settled industries;Deforestation; reduced provision of environmental services; depletedbiodiversity inventories.Detailed descriptions of predicted environmental and socio‐economicimpacts are presented in Section 6 of the Report. Section‐7 of the Reportdetails management and mitigation measures required to offset identifiedimpacts. These measures should be introduced into all future development23

plans, structural plans, Five‐Year Plans and Annual Plans targeting the Area ofInfluence or originating from Dzongkhags within the Area of Influence. Theintroduction of identified development actions with embeddedmanagement and mitigation measures to any development Plan or Budgetensures that the Plan has been mainstreamed to offset negative impacts,optimise positive impacts and reduce downstream costs for restoration andcorrective measures.Prioritised development actions have been detailed in section 7.2 of theReport. These have been presented logically and sequentially relative to theprospective development scenarios constructed by process participants.Prioritised actions from Section‐7.2 could be used to inform the preparationof the 11 th Five‐Year Plan. In the short‐term, immediate actions could beintroduced to Annual Plans and Budgets of the concerned Dzongkhags(assuming the Report is approved, endorsed and translated into Directives toall tiers of Government).Section‐8 of the Report highlights participants choice for the introduction ofa new results based instrument to measure progress made towards agreedobjectives and targets at the Dzongkhag and Geog level. The Section details a“Benchmarking” and Audit process that, in the opinion of ProcessParticipants, could prove effective, increase transparency, operate withinand support national principles of GNH, lead to greater coherence andcohesion, identify weakness and reinforce strengths within each Dzongkhagand Geog.RISK ANALYSIS:Process participants were requested to consider elements of risk that wouldor could have a bearing on their proposed scenarios.For the purpose of the Strategic Assessment, risk was treated as an eventthat could have a direct or indirect impact on development forecast for anygiven scenario. In addition, the element of risk was categorised as likely,unlikely or uncertain within the temporal framework of the assessment. Theelement of risk was also categorised according magnitude of the event andtreated as either critical or not critical.If an element of identified risk were both critical and uncertain then it wouldpreclude any investment or development in areas likely to be affected by therisk element in question.The Strategic Assessment identified Glacial Lake Outburst Flooding of Basin‐2as a critically uncertain risk and therefore demands that risk areas beidentified and regulated to exclude all structural or infrastructuredevelopment. Risk elements identified by process participants and theircategorisation is presented in section 5.6.1 of this Report24

AREA OF INFLUENCE: PRIORITISED DEVELOPMENT/PLANNING ACTIONSProcess participants considered the likely development outcomes resultingfrom their preferred development alternative and structured these in alogical sequence in their prospective scenario presented in Section‐5.5above. The sequence of activities required to plan, execute and monitor eachidentified development action will be similar in each case and will bepreceded by a generic set of actions, which should be carried out between2010 and 2015.1. Revision of existing Structural Plans to introduce development prioritiesidentified through this Assessment.2. Elaboration of a detailed Spatial Development Plan for the Area ofInfluence and the forecast focal development areas.3. Identification of GLOF risk areas and systematic development prohibitionin all current and future development plans.4. Promulgation of a Law prohibiting construction and physicaldevelopment in GLOF risk areas.5. Preparation of a digital cadastre for the area of influence.6. Agreement on development macro‐zones in the areas of influencewhere only certain types of compatible development will be permitted.7. Delineation of identified macro‐zones on the digital cadastre.8. Elaboration of information folders describing the developmentconditionality that must be met (environmental, physical, structural andsocial) prior to approval to proceed and licensing.9. Prepare and make available detailed natural resource and biodiversityinventories for the area of influence and the focal areas.10. Determine the current state of the environment in the area of influenceto include: water quality of surface and ground water; air quality andcurrent emission levels; potential risk areas (landslides, GLOF, flood risk,etc.); current noise pollution levels; present use of fertilizers andpesticides; current volumes of waste and wastewater generated;location and type of waste management in the area of influence.11. Define limits of change for environmental parameters that cannot beexceeded. The limits shall be structured on international standards25

adjusted to the Bhutanese context (example: Euro‐4, Euro‐5 emissionstandards for vehicles).12. Prepare a specific development Plan and Strategy for the establishmentof a Special Economic Zone in Lhamoizingka, complete with urbanexpansion areas and the location of critical infrastructure and services(roads, waste management, sewerage, power transmission anddistribution, residential areas, green areas, recreation areas, rail linksand terminals to India, hospitals, schools, etc.)13. Commission a study to analyse (in detail) the option and feasibility ofconstructing a railway from Sibsoo to Eastern Trashigang. The Railway,as described in this Report would follow an alignment proximal to theborder with India and traverse both the Phibsoo and Manasconservation areas.14. Convene a public hearing to present the findings of the Railway study(11) and agree on the future of the proposal.15. Identify suitable locations for sanitary landfills and wastewatertreatment facilities to service the future Wangdue‐Punakha conurbation.Reserve the location and issue directives to assure they are not allocatedto other purposes.16. Revise the existing Roads Development Master Plan in line with thefindings and recommendation of this Report. The Plan should be revisedto include the construction of a fast trunk road linking Lhamoizingka toWangdue‐Punakha following the shortest and most appropriatealignment adjacent to the future Punasangchu River reservoirs. TheAlignment should allow for development of tourism facilities andservices (ferry boat, water transport, terminals) on suitable landbetween the highest high water mark on the shore and the road.17. Develop a time‐based Strategic Plan for infrastructure improvement andupgrading in the area of influence.18. Commission a detailed study and feasibility study to determine the mostappropriate alignment for a road tunnel linking Wangdue‐Punakha toThimphu. The analysis must include a preliminary social andenvironmental impact profile of the propose works.19. Identify and reserve an area suitable for construction of a regionalairport in Lhamoizingka.20. Immediately identify alternatives to spoils dumping on riverbanks,valleys or other natural area. Ensure that future hydropower, road,infrastructure, tunnelling, urban expansion activities are not permitted26

to dump spoils. The preferred spoils treatment option must be someform of re‐use and recycle process with in‐built revenue generationopportunities.21. Initiate marketing and promotion campaigns to attract investment to thefocal areas following completion of the Planning processes and thepreparation of conditionality information/instruction folders.22. Agree on Institutional Arrangements for the technical review andapproval of license applications for all development types in the area ofinfluence.23. Agree on the institutional Arrangements for subsequent performancemonitoring, state of the environment monitoring and DzongkhagPerformance Audits.Specific development actions, identified through the above preparatoryactivities, should be introduced into the 11 th Five Year Plan (2014‐2019),subsequent Five‐Year Development Plans and Annual Plans and budgetsderived from these Plans. Introduced actions will be fully mainstreamedthereby reducing their environmental and social impact, enhancing theirdevelopmental benefits and reducing downstream corrective andrestoration costs.PROCESS RECOMMENDATIONS:On conclusion of the Strategic Assessment Process, participants shaped thefollowing recommendations to the Joint Commissions based on theircollective experience gained from the Process:1. Stakeholders recommend that all future development planning oranalysis of the development consequences of complex investmentprojects should be subject to Strategic Assessments to ensure that thesedeliver optimal development outcomes with minimal environmental,and social impacts.2. Stakeholders recommend that Strategic Assessment Processes bedesigned and implemented to ensure that all Dzongkhags are providedwith the Technical skills to apply the Process systematically to theirdevelopment planning and to inform their decision‐making processes.Opportunities to expose Eastern Dzongkhags to the <strong>SA</strong> Process could be:Proposed hydropower development on Basin‐3 and the development ofan International airport and Industrial Estate in the Gelephu region27

3. Furthermore, Stakeholders recommend that the 11 th Five‐Year Plan beelaborated on the basis of systematic Strategic Assessments carried outat Sub‐National levels to ensure that each constituent element of thatPlan is consistent and coherent to National Development objectives,contributes to local development objectives, is fully mainstreamed tomitigate against predicted point source or cumulative impacts.4. Stakeholders agree that the principal National Institutional driver forensuring a systematic application of Strategic Assessments (as amainstreaming instrument of choice) should be the Gross NationalHappiness Commission. Stakeholders encourage the Commission todraw on experience gained by participants and, in particular the NationalEnvironment Commission Secretariat to facilitate dissemination of theProcess to Sub‐National Administrations, Line Ministries and otherconcerned parties.5. Stakeholders recommend that the Gross National HappinessCommission, together with the National Environment CommissionSecretariat issue a directive and prepare an <strong>SA</strong> Process methodology toenable and monitor the systematic application of the Process, or avariant of it, to all complex development projects.Complex development projects shall include but not be limited to:Transport infrastructure; Strategic infrastructure; HydropowerDevelopment; Urban Expansion; Industrial Developments; National Parksand Conservation Areas; Mines and mineral extraction areas and others.6. Stakeholder participants strongly recommend that the RoadsDepartment consider designing a new Highway to link Lhamoizingka(Kalikhola) to the Sunkosh Bridge junction on the Eastern bank of thePunasangchu River. The Recommendation is based on the outcome ofthe Process and the need for a fast North‐South Trunk Road link toWangdue‐Phodrang, Punakha, Thimphu and the Eastern Dzongkhags.7. Stakeholders recommend that the Tourism Board of Bhutan initiate asurvey and product development initiative to identify and promotetourism opportunities in the vicinity of the Punasangchu River and inparticular in areas adjacent to the highway recommended as item‐5above.Through the process Stakeholders have identified a significant futuretourism resource adjacent to the reservoirs established by the SunkoshHydropower Projects, the Phibsoo Wildlife Sanctuary and other naturalassets in the region.8. Stakeholders strongly recommend that all identified GLOF risk areas onthe Punasangchu River Basin be categorised as development and28

investment exclusion areas. Furthermore, Stakeholders recommend thatrisk areas be designated as “Green Recreation Areas” and developed forthat purpose. Development could include: Park‐land; Footpaths; Bicyclepaths; Nature Trails; Water recreation areas; Planned picnic sites withfire pits; etc.29

1. INTRODUCTIONIn line with the objectives of the 10 th Five Year Plan (2008‐2013), themandate of the National Environment Commission and the Draft Guidelinesfor Mainstreaming Environment of Policies, Plans and Programmes, the NECSand its partners (the Gross National Happiness Commission and the NationalLand Commission have designed and implemented a Participatory StrategicAssessment type process to consider the wider development implicationsand impacts of series of hydropower developments planned and beingconstructed on Basin‐2, the Punasangchu River a development activityhighlighted and prioritised in the 10 th FYP.The National Environment Commission, together with its process partnersthe Gross National Happiness Commission and the National LandCommission agreed to collaborate to design and implement a rapid, multistakeholderand cross‐sectoral prospective Strategic Assessment of theprioritised development action. The Assessment used techniques and toolsdeveloped for Strategic Environmental Assessment that were adapted andtested to respond to the specific context and need of the Royal Governmentof Bhutan.A joint technical committee constituted by members from the Gross NationalHappiness Commission, the National Land Commission and the NationalEnvironment Commission Secretariat was established to guide the StrategicAssessment Process. The technical committee will receive, review andprovide comments to this document. Once changes have been introducedthe Technical Committee will distribute this document to members of thethree Commissions prior to a joint session where process outcomes andrecommendations detailed in this report will be discussed.As a participatory process, the Strategic Assessment brought togetherrepresentatives from Dzongkhags likely to be directly or indirectly affectedby development actions. As such, senior officials from Chukha, Gasa,Punakha, Wangdue‐Phodrang, Sarpang, Dagana and Tsirang participated. Inaddition to these participants, representatives from stakeholder Ministriesand administrations were also present. These included: the Gross NationalHappiness Commission; the NECS; the NLC; the Ministry of Economic Affairs;Ministry of Works and Human Settlement; Department of Roads and theDepartment of Energy.The Strategic Assessment of the proposed hydropower projects on the Basin‐2 is aligned to Article 5 of the Constitution of the Kingdom of Bhutan (2008),The National Environment Protection Act of Bhutan (2007), the Regulationsfor the Environmental Clearance of Projects and the Regulations on StrategicEnvironmental Assessment (2002).30

The Strategic Assessment Process is a non‐statutory process that leads to theelaboration of technical guidance to better manage and mitigateenvironmental and socio‐economic impacts expected from a preferred andoptimal development alternative selected by process participants. As such,proposed management and mitigation can be introduced to any plan orelement of a plan and ensures that each action/activity constituting a currentor future plan are both coherent and mainstreamed. Process outcomesshould serve as a guide and do not replace national and sub‐nationalplanning processes. Likewise, results do not replace the need for statutoryEIA procedures necessary for environmental clearances and licensing.The Strategic Assessments were supported through funding provided by jointRoyal Government of Bhutan – Government of Denmark Environment andUrban Sector Programme Support (EUSPS).31

2. BACKGROUNDProcess participants selected the Area of Influence for this StrategicAssessment as: Gasa, Punakha, Wangdue‐Phodrang, Dagana, Tsirang,Sarpang Dzongkhags (North to South). Participants then considered thatdevelopment would concentrate in two linked areas Focus Areas: to theNorth Punakha and Wangdue‐Phodrang and the second in the Southernregion of Dagana, Sarpang and Tsirang Dzongkhags.The socio‐economic profiles of these Dzongkhags are detailed below:2.1 ADMINISTRATIVE AND SOCIO‐ECONOMIC PROFILE OF THEAREA OF INFLUENCEGA<strong>SA</strong> DZONGKHAGGasa lies in the extreme northwest of the country. It is bordered by PunakhaDzonkghag in the southeast, Thimphu in the southwest, Wangdue in the eastand the Tibetan region of China on the extreme north. The Dzongkhag has anarea of 4,409.30 square kilometers (Gasa Dzongkhag, 9 th Five Year PlanDocument), which is 11% of the total area of the whole country. Gasa is thesource of the country’s two major rivers, the Pho Chhu and the Mo Chhu.Gasa’s altitude ranges from 1,500 meters to 4,500 meters above sea levelwith a climate that ranges from temperate to alpine characterized byextremely cold winters and short and pleasant summers. The average rainfallin Gasa Dzongkhag is about 2,000mm annually.The main source of cash income for the people is through the hire of horsesand mules to transport goods for tourist on trek and for Bhutanese who visitthe Gasa hot springs in the winter. Sale and bartering of livestock products isanother source of income for the people of Laya and Lunana Gewogs. A fewcereals and vegetables are grown but only in limited areas due to marketingconstraints and depredation by wild animals.The Layaps and Lunaps lead a pastoral life rearing yaks and sheep in themountains during summer and move with their herds to permanentsettlements in the winter.Gasa Dzongkhag’s cultural heritage includes 13 lhakhangs and chortens. Gasais also famous for the Tshachu (hot spring), which was destroyed by thefloods in 2009. Efforts are currently underway to reconstruct the Tsachuwhich attracts many visitors (both national and from outside) every autumnand winter.32

Gasa at a GlanceFeatureStatistics1 Area (Sq.Km) 4,409.302 Population 3116Male 1635Female 14853 No. of households 7274 Population Density (per Sq.Km) 15 Number of literate persons 1,2786 Trade Licensesi) Manufacturing 2ii) Small and Medium Enterprises 417 Subsistence Poverty 1.08 Number of SchoolsCommunity Primary School 2Lower Secondary School 1Middle Secondary School 19 Land UseForest 33.3%Pasture 5.3%Agriculture 0.2%Others (Rocky outcrops, perpetual snow etc) 61.7%10 Health FacilitiesBHUs 4Outreach Clinics with shed 3ORCs without shed 5Hospital beds 511 Number of Households having access to roadsby time takenLess than 3 hours 196More than 3 hours (more than half a day) 531Source: MOA Statistics and the PHC 2005PUNAKHA DZONGKHAGPunakha Dzongkhag is situated in western Bhutan, at the confluence of thePhochhu and Mochhu rivers (that join to form the Punasangchhu). Thealtitude of the Dzongkhag ranges from 1,200 to 4,800 metres. With a totalarea of 975 square kilometers, the Dzongkhag is made up of 11 Gewogs. Thetemperature varies from 30 degrees Celsius during the summer to 5 degreesCelsius during the winter. Punakha receives an average annual rainfall of1,500mm. Until 1955, Punakha served as the winter capital of Bhutan. ThePunakha Dzong continues to be the winter residence of the Central MonkBody.33

Punakha Dzongkhag is well known for agricultural products such as rice,vegetables and fruits. Paddy, wheat, maize, and mustard are the main cropsgrown in the Dzongkhag. Fruits grown in the Dzongkhag include guava,peach, plum, pear and oranges. Chillies, beans, radish, cabbages, brinjal andtomatoes are the common vegetables grown in the Dzongkhag. Vegetablesare an important source of income for the farmers of Punakha Dzongkhag.Being an important landmark in Bhutan’s history, Punakha Dzong attractsmany tourists every year. The Dzongkhag also boasts of two hot springs,namely the Koma Tshachu and the Chhubu Tshachu, that attract manyBhutanese every autumn and winter.Punakha at a GlanceFeatureStatistics1 Area (Sq.Km) 1,108.32 Population 23,462Male 11,979Female 11,4833 Number of households 4,5644 Population Density (per Sq.Km) 215 Number of literate persons 12,8606 Trade Licenses (2007)i) Manufacturing 3ii) Number of service automobile workshops 1iii) SMEs 1547 Subsistence Poverty Incidence 1.98 Number of SchoolsCommunity Primary School 8Lower Secondary School 3Middle Secondary School 1Primary School 2Higher Secondary School 1Private Higher Secondary School 19 Land UseForest 89.4Pasture 1.9Agriculture 4.7Others (Rocky outcrops, perpetual snow etc) 3.9Settlements 0.1Orchards28ha10 Health FacilitiesHospitals 1BHUs 5ORCs with shed 8ORCs without shed 1Hospital beds 4011 Number of Households having access to roads34

y time takenLess than 3 hours 4,399More than 3 hours (more than half a day) 165WANGDUE DZONGKHAGWangdue Dzongkhag is located in Western Bhutan and is bordered byPunakha in the north, Thimphu in the west, Trongsa in the east and Tsirang inthe south.Wangdue‐Phodrang has an area of about 4,308 square kilometres withelevations ranging from 800 to 5800 meters above sea level. The summersare moderately hot and the winters cool with the northern part of theDzongkhag remaining under snow cover. The Dzongkhag receives about1000mm of rainfall annually.Wangdue is the second largest district in Bhutan, comprising of fifteen vastand diverse Geogs. Of the fifteen Geogs, Phobjikha Geog is famous as thewinter habitat of the Black‐necked Cranes. The Jigme Dorji WangchuckNational Park extends into the northern part of the Dzongkhag and coversalmost four Geogs. Gangtey Goenpa and Boed Langdra are other importantcultural sites in the Dzongkhag.Rich pasture for livestock is located in the higher Geogs of Phobjikha,Gangtey, Sephu and Dangchu. There are about 39,380 heads of livestock inthe Dzongkhag that provide income to rural households through the sale ofbutter and cheese (Wangdue Dzongkhag, 9 th Five Year Plan Document).Paddy is an important crop and paddy fields are mostly located along theDangchu and Puna Tsang Chu where two crops of rice are grown annually.Potato is an important cash crop for the Geogs of Phobji, Gangtey and Sephuwhile citrus production is increasing every year in the Geogs of Daga, Bjena,Phangyul and Rubeisa. Ginger is an important cash crop in Daga and AthangGeogs. The lower valley towards the southern belt is best suited for subtropicalhorticulture crops such as oranges, mangoes, pineapples, guavas etc.Wangdi at a GlanceFeatureStatistics1 Area (Sq.Km) 4,0292 Population 31,135Male 16,083Female 15,0523 Number of households 62274 Population Density (per Sq.Km) 85 Number of literate Persons 14,8946 Trade Licenses (2007)i) Manufacturing 25ii) SMEs 42635

iii) No. of service automobile workshops 57 Subsistence Poverty (2007) 1.98 Number of Schools (2007)Community Primary School 13Primary School 5Lower Secondary School 3Middle Secondary School 2Higher Secondary School 19 Land UseForest 73.8Pasture 3.5Agriculture 2.3Orchards5haSettlements 0.1Others (Rocky outcrops, perpetual snow etc) 20.310 Health FacilitiesHospital 1BHUs 4ORCs with shed 11ORCs without shed 2Hospital beds 2011 Number of Households having access to roadsby time takenLess than 3 hours 5380More than 3 hours (more than half a day) 847TSIRANG DZONGKHAGTsirang Dzongkhag is located in the south‐central part of the country. TheDzongkhag’s altitude ranges from 400 to 2000 meters above sea level.Approximately 58% of the land is under forest cover comprising mainly ofbroadleaf and chir pine species.Damphu, in Kikhorthang Gewog, is the main town and the administrationcentre.The Dzongkhag has good development potential. The diverse agro‐ecologicalfeatures provide the Dzongkhag with potential for the cultivation of manydifferent types of cereals as well as horticulture crops. Paddy, maize andmillet are the major cereal crops grown while orange, cardamom andvegetables are the principal cash crops. Mandarin constitutes an importantsource of cash income for most of the farmers. Livestock rearing is also animportant economic activity contributing to both subsistence consumptionand income generation.With the Wangdue‐Sarpang highway passing through the Dzongkhag and agood network of internal roads and mule tracks, most of the Geogs in the36

Dzongkhag are well connected. The Dzongkhag benefits from market accessto major towns like Gelephu and Thimphu. The shortage of power supply is,however, a major constraint faced by the Dzongkhag.Tsirang at a GlanceFeatureStatistics1 Area (Sq.Km) 1807.32 Population 13,419Male 9517Female 91503 Number of households 36514 Population Density (per Sq.Km) 75 Number of literate Persons 8,9316 Trade Licenses (2007)i) Manufacturing 7ii) SMEs 186iii) Number of service automobile workshops 47 Subsistence Poverty (2007) 2.58 Number of SchoolsCommunity Primary School 5Primary School 2Lower Secondary School 2Middle Secondary School 1Higher Secondary School 19 Land UseForest 76.2Pasture86haAgriculture 21.7Orchards 0.1Settlements4haOthers (Rocky outcrops, perpetual snow etc) 1.810 Health FacilitiesHospitals 1BHUs 4ORCs with shed 11ORCs without shed 2Hospital beds 2011 Number of Households having access to roadsby time takenLess than 3 hours 3086More than 3 hours (more than half a day) 565DAGANA DZONGKHAG37

Dagana Dzongkhag is one of the remotest Dzongkhags in the country withdispersed and remote settlements. The Dzongkhag consists of eleven Geogs.It shares its borders with Thimphu and Chukha Dzongkhag to the west,Wangdue‐Phodrang Dzongkhag to the north, Tsirang Dzongkhag to the eastand Sarpang Dzongkhag to the south. The elevation ranges from 600m toover 3800m above sea level. The Dzongkhag falls within the Temperate Zonein the north and sub‐tropical zone in the south and is characterized by hotand wet summers and cool and dry winters.About 79% of the total area of the Dzongkhag is under forest cover with treespecies like Champ, Arguray, Chir pine and Sal, etc. The Dzongkhag has 4,782hectares of Kamzhing (dry land) and 2,115 hectares of Chuzhing (irrigated/Wetland). There are about 6,050 hectares of land under mixed cultivation.With improved breeds of livestock and support in the form of good feed andfodder, the Dzongkhag has good potential for livestock developmentThe Dzongkhag produces considerable quantities of oranges and cardamoms.The Dzongkhag has good potential for growing cash crops like ginger, mango,green gram and mustard to increase the cash income of the people.The rugged terrain with poor road conditions hampers communication bothwithin and outside the Dzongkhag. The high cost of living due to shortage ofsupplies and high cost of transportation to and from the Dzongkhag areother problems faced by the inhabitants of the Dzongkhag. The constructionof the Dagachu Hydropower Project is expected to bring immense economicopportunities for the people of Dagana and ease some of these constraints.38

Dagana at a GlanceFeatureStatistics1 Area (Sq.Km) 1,724.32 Population 22,670Male 11,500Female 11,1703 Number of households 4,3504 Population Density (per Sq.Km) 135 Number of literate Persons 9,8966 Trade Licenses (2007)i) Manufacturingii) SMEs 208iii) Number of service automobile workshops 37 Subsistence Poverty 9.78 Number of SchoolsCommunity Primary School 14Primary School 2Lower Secondary School 2Middle Secondary School 29 Land UseForest 82.2Pasture 1.2Agriculture 12.7Orchards 1.1Settlements4haOthers (Rocky outcrops, perpetual snow etc) 2.910 Health FacilitiesHospitalsBHUs 8ORCs with shed 13ORCs without shed 5Hospital beds 511 Number of Households having access to roadsby time takenLess than 3 hours 3454More than 3 hours (more than half a day) 896<strong>SA</strong>RPANG DZONGKHAGSarpang Dzongkhag is situated in the central southern foothills borderingIndia. The Dzongkhag stretches from Lhamozingkha in the west to ManasNational Park in the east. Its topographic features have undulated terrainwith elevations ranging from 200m to 3600m above mean sea level. About12% of the total area is under agriculture. Paddy, maize, wheat and millet are39

some of the major crops. Cash crops such as orange, areca nut, cardamom,ginger, guava, lemon, banana and mango are grown extensively.Sarpang is one of the oldest towns in the country with access to motorableroads as early as in the 1950s. Due to its close proximity to the Indianmarkets, Sarpang has been the commercial centre for the centralDzongkhags. Favourable terrain and climatic conditions combined with fertileagricultural land offer tremendous opportunity for farm mechanization andcommercial horticultural development in the Dzongkhag.Sarpang at a GlanceFeatureStatistics1 Area (Sq.Km) 13042 Population 60,100Male 19,332Female 17,7693 Number of households 7,3464 Population Density (per Sq.Km) 465 Number of literate Persons 19,0756 Trade Licensesi) Manufacturing 41ii) SMEs 766iii) Service Automobile workshops 167 Subsistence Poverty (2007) 3.38 Number of SchoolsCommunity Primary School 8Primary School 1Private Primary School 2Lower Secondary School 5Middle Secondary School 1Higher Secondary School 19 Land UseForest 83.3Pasture 0.6Agriculture 12.0Orchards 0.3Settlements 0.1Others (Rocky outcrops, perpetual snow etc) 3.810 Health FacilitiesHospital 2BHUs 10ORCs with shed 13ORCs without shed 4Hospital beds 7511 Number of Households having access to roadsby time takenLess than 3 hours 664340

More than 3 hours (more than half a day) 7032.2 ENVIRONMENTAL PROFILE OF THE AREA OF INFLUENCEBhutan is situated in the Eastern Himalayas and its fragile mountainousecosystem makes it vulnerable to changes in the state of its naturalenvironment. The conservation of the natural environment is highlighted asone of the four pillars for “Gross National Happiness,” Bhutan’s developmentphilosophy that has gained much international acclaim in recent years. Inspite of the increasing pressure from socio‐economic development andmodernization, the conservation of its natural resources continues to be apriority for the Royal Government.The area of influence is also the home of two Protected Areas and oneConservation Area. Sprawling across 4,349 sq km, Jigme Dorji National Park ishome to a diverse species of flora and fauna. This national park covers theentire Dzongkhag of Gasa and the western areas of Thimphu and Parodistricts. Jigme Dorji National Park has more than 30 species of mammals,300 species of birds, and 1400 species of plants. Snow leopards, Black bears,markot, sambar, barking deer, Takin and musk deer are found in this area.Semi‐nomadic people living here are mostly yak herders who harvestmedicinal and aromatic plants and subsist on marginal agriculture and forestproducts. The park is also the source of some of Bhutan’s main rivers.Phibsoo Wildlife Sanctuary has an area of 278 Sq. Km. and is located in southcentralBhutan in Sarpang Dzongkhag. It is the only protected areas in thecountry where natural Sal forest and chital deer are found. Like Royal Manas,Phibsoo is home to Elephants the Royal Bengal Tiger, Gaur, three species ofMahseer and possibly the rare Ganges River dolphin. Unlike Royal Manas, ithas no human residents. Phobjikha valley, in Wangdue Dzongkhag, issituated at 3000m on the periphery of the northwestern tip of Jigme SingyeWangchuck National Park. The valley has been declared a Conservation Areaas it is one of the main winter habitats of the Black‐necked Cranes. Thesebirds are internationally endangered and only a few thousand remain in thewild, all of which are in the Himalayan region. The Cranes spend theirsummers in Tibet where they breed and rear their young before setting outevery year to spend their winters in Bhutan.Large‐scale developmental activities will definitely have adverseenvironmental impacts on the area of influence. The Punatsangchu Basin isthe nesting place of the White‐bellied Heron, a globally threatened birdspecies. About 23 birds nest in the basin of the Punatsangchu River. With thecommencement of the Punatsanchu 1 Project, the habitat of these rare birdsis threatened. Similarly the river basin is also the spawning ground formigrating fish species such as the Mahseer. The construction of a series ofdams on the Punatsanchu River will have a direct impact on their migrationroute and spawning grounds.41

The area of influence continues to enjoy good air quality. The main sourcesof air pollution in the area are from the combustion of biomass for supply ofdomestic energy and agricultural activities, combustion of fossil fuels fromvehicular emissions, and fugitive dusts from unpaved roads and newconstruction sites. Most of the satellite towns in Bhutan do not have properwaste disposal systems so the waste is burnt thereby polluting the urban air.However, the number of vehicles in the area of influence continues to growevery year and although vehicle emissions testing is conducted every year,this needs to be supported by more effective monitoring programs to ensurethat vehicles that fail the standards rectify their emissions.There are no major industries located in the area of influence so air pollutionas a result of industrial emissions is not an issue.Based on the preliminary data collected by the NEC, it can be said that thequality of water in the area of influence is healthy. The data indicate that themain rivers and their major tributaries, with some exceptions, are still of apristine quality. The natural water quality of the rivers can be characterizedas highly oxygenated, slightly alkaline with low conductivity and no recordedsalinities. However, there are localized pollution problems that needattention to avoid health problems and deteriorating recipient conditions.Chief among these are the unsanitary conditions found along the banks ofstreams and rivers both in urban areas and in rural locations. This problem isexacerbated at urban locations where surface drainage, oil and grease spillsfrom workshops, grey water sullage from domestic households anduncontrolled seepage/overflow from septic tanks and piping flow directlyinto the rivers. TheAs in other parts of the country, the area is also experiencing land usechanges. The rising population has aggravated the situation and will furtherworsen it if timely counter measures are not taken. Hydropower productionis the biggest source of revenue for the country. In addition, hydropower isviewed as an essentially clean source of energy and a means of reducing thecountry’s dependence on traditional solid fuels, e.g. fuelwood and fossil fuel,which are much more environmentally damaging and expensive. The socioeconomicand environmental benefits notwithstanding, hydropowerdevelopment can impose some environmental and social costs. Constructionof dams, power transmission and distribution lines, and associatedinfrastructure such as access roads has a bearing on land stability andbiodiversity. Influx of non‐native construction workers in massive numbersexposes the local population to acculturation and exerts additionalpopulation pressure on the surrounding natural resources (BhutanEnvironment Outlook 2006). The construction of major hydropower projectsand associated activities such as road construction, operation of quarries andthe construction of transmission lines in the area will further exacerbate theproblem if not monitored properly.42

Solid waste generation and disposal have emerged as a major environmentalproblem particularly in the urban areas in recent times. Rapid urbanization,growing affluence, changing consumption patterns, low level of awarenessand poor civic sense among the Bhutanese public are the key factors causingincreased waste generation. The solid waste problem is growingexponentially in urban towns in the area of influence. Apart from municipalsolid waste, there is also the concern of health care waste and industrial solidwaste. Data on industrial solid waste is currently not available. As for healthcare waste, the Health Care Waste Management Plan produced by theMinistry of Health in 2004 provides an estimated figure of 73.2 tons ofinfectious waste per year. Electronic waste, in this day and age of television,computers, cell phones and various other electronic gadgets is also a majoremerging concern (Bhutan Environment Outlook 2008).43

3. METHODOLOGYThe Strategic Assessment was tailored to the specific needs of the Royalgovernment of Bhutan represented by: The National EnvironmentCommission and Secretariat; the Gross National Happiness Commission; theNational Land Commission; Stakeholder Dzongkhags and key Line Ministries.The methods used were a composite of: The OECD/DAC methodology asdescribed in their Good Practice Guidance (2006); the United NationsUniversity Course Modules on SEA of 2006; GTZ‐SEA guidance; Danidaguidance on SEA applications; the Experience of the Scottish Executivedetailed in their SEA Toolkit (2006); the guidance provided by theInternational Association of Impact Assessment (IAIA) and personal <strong>SA</strong>application experience of the Process Facilitator (Michael P. Pearson PhD.Danida Technical Advisor to NECS)3.1 WHAT IS A STRATEGIC ENVIRONMENTAL/STRATEGICASSESSMENTSadler and Verheem (1996) drafted the generally quoted definition forStrategic Environmental Assessment (SEA):“SEA is a systematic process for evaluating the environmental consequencesof proposed policy, plan or programme initiatives in order to ensure they arefully included and appropriately addressed at the earliest appropriate stageof decision‐making on par with economic and social considerations”. TheProcess includes a written report and the involvement of both stakeholdersand the public throughout the process.The OECD‐DAC, SEA Task Team (2006) defined the process as:“A range of analytical and participatory approaches that aim to integrateenvironmental considerations into Policies, Plans and Programmes andevaluates their inter‐linkages with economic and social considerations”The SEA/<strong>SA</strong> process by definition must therefore be an issues drivenparticipative approach to the environmental assessment of plans, policies,programmes development proposals or complex projects. Furthermore, itshould contribute to sustainable development through the assessment ofstrengths, weaknesses, and environmental resources, which can support orbe detrimental to development.The process is designed to:• Be implemented pro‐actively and should inform and be supportive ofdevelopment proposals.44

• Facilitate the design of environmentally sustainable policies, plans,development proposals and complex projects.• Consider a range of alternative options to the proposed policy, plan,programme, development proposal or complex project• Consider the cumulative effects of the proposed policy, plan,programme or development proposal on a local, sectoral, regional,national or global perspective.• Define the environmental parameters within which a particulardevelopment proposal can be realised.• Create a framework against which impacts and benefits due to aparticular policy, plan, programme or development proposal can bemeasured.• In the present (Bhutan) context, the process is designed to be fullytransparent, participatory and deliver cross‐sectoral co‐ordinationessential to consistent decisions and rapid implementation ofdevelopment proposals.3.2 STRATEGIC ENVIRONMENTAL ASSESSMENT – A PROCESSTAILORED TO THE BHUTANESE CONTEXTThe present <strong>SA</strong> process responds to the mainstreaming requirements of the10 th Five Year Plan, which called on all Sectors, Agencies, Dzongkhags andGewogs to mainstream environmental issues into their Policies, Plans,Programmes and Projects.In 2002, the National Environment Commission enacted its Regulations onStrategic Environmental Assessment of Policies, Plans and Programmes asper the articles and provisions of the Environmental Assessment Act of 2000.These Regulations were not put into practice given that Line Ministriesconsidered that the enacted Regulations would lead to delays in Governmentprocesses and therefore impede development. Since then, the Regulationshave been kept on standby but agreement was reached that they would beactivated and applied, as necessary, to proposed “mega‐projects” of nationalsignificance.At present, mainstreaming has taken on a new dimension and impetus inBhutan. Inclusion of mainstreaming requirements to the 10 th Plan has led theNEC and GNHC to prepare draft Environment Mainstreaming Guidelines.These have been circulated and will now be incorporated into a genericguideline focused on GNH and incorporating Environment, Poverty andClimate mainstreaming guidance for Policies, Plans, Programmes and45

Projects. This set is being prepared by the GNHC with support from NECunder the auspices of Danida and UNEP/UNDP.The present effort is piloting a new and simplified approach tomainstreaming. It is a bottom‐up approach that: Forecasts planned andexpected development; Prioritises sequential and coherent developmentactions; Informs development planning and introduces management andmitigation measures to offset all predicted impacts pro‐actively.This approach is appropriate to the current development context and willserve to reinforce National mainstreaming initiatives and directives. Theapproach ensures that all elements constituting a Plan or Programme havebeen mainstreamed prior to introduction to the instrument. As such, giventhat all constituent elements of the Plan or Programme have embeddedimpact management and mitigation, then, the Instrument is by definitionmainstreamed.3.3 <strong>SA</strong> PROCESS ORGANIZATIONThe Strategic Assessment of the Development impacts expected fromhydropower developments on Basin‐2 (the Punasangchu River) was initiatedby the National Environment Commission Secretariat and led jointly by theNEC, the GNHC and the NLC on behalf of the GNHC. The Assessment hasbeen implemented. The SEA was organized as follows:The Joint Commissions lead the process and comments on the results of theTechnical Group responsible for contributing towards the successfulconclusion of the different stages of the Process. The Joint Commissionsreceive the <strong>SA</strong> Report, provide comments and finally recommendendorsement of the Document.The Endorsed Report is then delivered to concerned Dzongkhags withinstructions to introduce mainstreamed outcomes to their futuredevelopment plans.A Technical Group comprising representatives of all stakeholder groups(Central Government, Concerned Dzongkhags, Geogs, Experts, the GeneralPublic, NGO’s, Associations, etc) was called to participate in the process. TheTechnical Group was provided with training and support to enable them tocontribute effectively to the process.The Technical Group was asked to participate in two consultative workshopsduring which objectives were agreed, alternatives identified and selected,impact assessment was carried out and management/mitigation measuresidentified and outcome recommendations drafted. As such, the TechnicalGroup was critical and key to the successful outcome of the Process.46

3.4 GEOGRAPHIC SCOPE OF THE STRATEGIC ASSESSMENTWorkshop participants considered the geographic focus of the Assessmentsand through consultation have agreed on the following:For the Assessment considering development on Basin‐2 the geographicfocus will be Gasa, Punakha, Wangdue‐Phodrang, Dagana, Sarpang, Tsirangand Chukha Dzongkhags. Participants also agreed that the principal focusareas should be Wangdue‐Phodrang and Punakha and the belt includingsouthern Dagana, Sarpang and Tsirang. Dzongkhags on the East‐WestHighway will also be considered as required during Workshop‐2 discussions.(See Figure‐1 pg. 6)3.5 TEMPORAL FRAMEWORK OF THE STRATEGIC ASSESSMENTWorkshop participants considered the temporal framework of theAssessments and through consultation have agreed, both for the Basin‐2assessment and the Dhamdum industrial estate assessment, that theassessment period shall be 20 years (present to 2029).Agreement was reached that the assessment will be considered in 5‐yearincrements in order to better inform future 5‐year planning cycles.3.6 PROCESS METHODOLOGYThe methodology applied in this Strategic Assessment Process wasstructured on and is similar to the standard approach described in Section‐3and Annex‐ 1 (12.1) of this Report. Certain steps were adjusted as follows:1. Screening: Gross National Happiness Commission, the NationalEnvironment Commission and the National Land Commission agreedthat hydropower investments initiated and proposed for Basin‐2 thePunasangchu River were likely to have both significant and wideranging development consequences and significant point‐source andcumulative environmental, social, economic and GNH impacts.In order to better understand the nature of expected developmentand effectively manage identified impacts it was agreed that the mostappropriate tool would be a Strategic Assessment.The National Environment Commission was instructed to lead theStrategic Assessment Process on behalf of the Gross NationalHappiness Commission and to include the National Land Commissionas its Process Partner.47

2. Scoping: This stage of the Assessment process was carried outthrough site visits to concerned Dzongkhags, discussions withDzongdags, Dzongkhag Environmental Officers, and officers fromconcerned central administrations. In addition existing informationsources were identified from the Ministry of Agriculture, The Ministryof Works and Human Settlement, GNHC, the NECS, the NLC, Ministryof Economic Affairs and others.Process design was also detailed during the Scoping stage and latervalidated by Process participants during the first Workshop.3. Identification of Alternatives: Alternatives to be considered andanalysed during the Process were identified and selected by Processparticipants/stakeholders. All alternatives proposed by the floorduring plenary sessions were initially retained. Participants reducedthe number of proposed alternatives through discussion and vote.Only those Alternatives retained were analysed through scenarioconstruction, risk analysis and expert judgement.4. Selection of the Preferred Alternative: On completion of theprospective analysis through scenario construction and expertjudgement, participants presented their analysis to the floor in aplenary session. A plenary discussion and debate on the outcomes ofeach analysis led to the selection of a preferred alternative(s).5. Impact Identification and Assessment: The technical group /processparticipants were then requested to detail each development actionlikely to comprise the preferred alternative over the temporal andgeographic scope of the Assessment.Environmental, social, economic and GNH impacts (point source andcumulative) expected from each development action were thenidentified together with requisite management and mitigationnecessary to offset the predicted effect.Projected development was then plotted as polygons on maps andGoogle‐Earth images. Though this is a low resolution mappingexercise, it was sufficient to address issues of compatibility andspatial relationships both in the focal area and the identified area ofinfluence.Development polygons were then conditioned through theintroduction of prescribed conditions that should be met prior toissuance of licences and environmental clearance. This processoutcome serves to inform prospective investors and reduce the need48

for subsequent impact assessment. The outcome also streamlinesfuture monitoring needs.6. The <strong>SA</strong> Report: The Draft Strategic Assessment Report was preparedand distributed to participants for comment. Participants wererequested to verify that the Draft Report accurately reflected theirconsensual views and did not introduce issues and elements thatwere not discussed by them during the proceedings.Comments received from stakeholders and participants were thenintroduced to the Report as appropriate. Comments not edited intothe Report are normally presented as an Annex to the Report withreasons why the comment was not introduced to the Report.The Finalised Draft Report is then distributed to members of theCommissions (GNHC, NECS and NLC) prior to convening a jointCommission meeting. Any comments received from the Commissions,or instructions from the Commissions are then introduced to preparethe Final Strategic Assessment Report.Stakeholders are represented at the Joint Commission meeting toensure that proposed changes and instructions from the Commissionsdo not alter the sense or context of the Report.On completion of this stage of the Assessment, the Report is readyfor validation and endorsement by the Chairman of the JointCommissions.The Chairman of the joint Commission may wish/instruct that theFinal Report be submitted for endorsement to a higher nationalauthority (the Prime Minister or the Cabinet).7. Validation of the Results: Completion and acceptance of the FinalStrategic Assessment Report by the Commissions is considered avalidation of its results, outcomes and recommendations. Validationis underlined by the signature of the Report Cover Note by theChairman of the Commission and the designated seniorrepresentative of all process partners (GNHC, NECS, NLC).8. Statement of Endorsement: Once the Report has been adjusted andvalidated by the joint Commissions, a Statement of Endorsement isprepared and submitted by the joint Commissions to their Chairman.The Statement of Endorsement is an official document that serves toinstruct central and lower tiers of government to introducemainstreamed Process results and outcomes to their future plans. Italso instructs government to act on Process recommendations.49

3.7 PUBLIC CONSULTATIONPublic Consultation is an essential step in any Strategic Assessment Process.In this case public consultation was carried out in two ways:1. Dzongkhag Environment Officers personally introduced the Report tocommunities at the Geog level in the focus area and the area ofinfluence. They explained the process and described its outcomes andrecommendations. Comments received from communities wererecorded and transmitted to the NECS for inclusion (as necessary) tothe Report. Comments received from communities are included asannexes to this report.2. The Draft Report is to be presented to the public and concernedauthorities at a National Consultation Workshop to be held inThimphu (over a 1‐day period) during the month of March 2010.Comments received during this workshop will also be included (asneeded) into the Report. Comments Received will also be introducedto the Comments Annex mentioned in item 1 above.3.8 STRATEGIC ASSESSMENT: WORKSHOP‐1A First consultation workshop to introduce the Strategic Assessment Processto stakeholder participants was held in Wangdue‐Phodrang from the 31 st ofAugust to the 4 th of September 2009.54 stakeholder participants from Gasa, Punakha, Wangdue‐Phodrang,Dagana, Tsirang, Sarpang and Chukha Dzongkhags, the NECS, GNHC, NLC,Department of Energy, Ministry of Agriculture and the Ministry of EconomicAffairs attended this workshop (The participants’ list is presented as Annex‐12.1 of this Report)During the First Workshop, participants were introduced to: StrategicAssessments; presented with international case studies of similarassessments; introduced to assessment tools including: prospectiveprocesses through scenario construction; value of expert judgement; usingrisk and probability; construction of a zero (business as usual scenario);setting the geographic and temporal scope of the assessment; collaborativediscussion techniques; setting the objective of the assessment; identificationof global issues, topics and themes to be considered during the assessmentand setting sub‐objectives relative to selected topics and themes.Participants also elaborated a range of alternative development options tobe developed (through scenario construction) during the second workshop.50

3.9 DEFINING A BASELINE: DATA AND INFORMATIONGATHERING AND COMPILATIONIn order to fully understand changes expected from development of megahydropowerprojects on Basin‐2, it is necessary to clearly define the currentstatus of environmental and social systems in the area of influence likely tobe affected (positively or negatively) by the development actions.In the current case, participants have considered the current state of theenvironment, existing environmental management systems and processes inplace. The baseline considers: Existing Structural Development Plans; Solidwaste management systems; waste water treatment facilities; managementand mitigation of glacial outburst floods; current land use; urban footprintsand expected urban expansion areas; forest cover and forest managementsystems; existence and extent of critical ecosystems; conservation andbiodiversity management units and processes; demographic and socialdevelopment trends in the area of influence.Results have shown that the current state of the environment in the area ofinfluence under consideration is near optimal and the direct result ofnational environmental management priorities prescribed in the Constitutionand detailed in National Legislation and their accompanying directives andregulations.Baseline information has been collated from Bhutan’s Environment OutlookReport of 2008, Environmental Impact Assessments of the Punasangchu‐1Hydropower development, studies related to the Dagachu Hydropower andreservoir project, GLOF Risk assessments, site visits and expert knowledge.Current baseline information is systematically improved as new data andinformation becomes available and is introduced to subsequent <strong>SA</strong> cycles.3.10 STRATEGIC ASSESSMENT: WORKSHOP‐2A Second consultation workshop to Complete the Strategic AssessmentProcess initiated during the first workshop was held in Paro from the 23 rd tothe 28 th of November 2009.45 stakeholder participants from Gasa, Punakha, Wangdue‐Phodrang,Dagana, Tsirang, Sarpang and Chukha, Dzongkhags, the NECS, GNHC, NLC,Department of Industry, Department of Roads, Ministry of Agriculture andthe Ministry of Economic Affairs attended this workshop (The participants’list is presented as Annex‐12.1 of this Report).51

During the Second Workshop participants were asked to re‐visit the resultsof the first workshop and consider whether selected objectives, subobjectives,topics and themes were still valid. Changes or additions wereconsidered by participants and original choices adjusted as necessary.During the second workshop, participants continued their work initiatedduring the first workshop. With experience gained from construction of thezero (business as usual) scenario, participants constructed prospectivedevelopment scenarios complete with expected social, environmental andeconomic impacts for each selected alternative development option.On completion of the prospective scenario building activity, participantspresented results and then selected a preferred alternative through atransparent voting process.The preferred alternative was then detailed over the temporal and spatialscope of the assessment.Impacts expected from each identified development action constituting thedevelopment alternative over the temporal and spatial scope were identifiedand mitigation/management measures were proposed.Identified development actions were plotted on either a 1:50,000 map or onto Google‐Earth images to understand spatial relationships and identify areaswhere incompatibilities could result loss of investment value, cumulativeimpacts or other outcome. Discussion and negotiation among participantseither led to e repositioning of the development activity or adjustment toproposed management and mitigation measures.The workshop was concluded with a discussion on implementation andmonitoring options. A benchmarked and results based monitoring systemwas introduced and accepted by participants as the most suitable to theirdevelopment purposes. The benchmarking system proposed is closely linkedto national development and GNH indicator sets.Finally, Participants agreed on a set of recommendations to be included inthe Strategic Assessment Report (see Section‐9 of this Report).3.11 ASSESSMENT METHODOLOGYFor this particular prospective Strategic Assessment, methodology used wasstructured on:1. Scenario construction for each development alternative identified byprocess participants;52

2. Forecasting techniques based on expert judgement, risk andprobability assessments/analysis, proximity analysis and vulnerabilitymapping.Process participants were provided with support and instruction on the useof the various techniques (item‐2 above) and effectively applied these asthey constructed their scenarios. The methodology selected and usedpermitted direct comparison and evaluation of each scenario relative toothers developed and permitted participants to select a preferred (optimal)development alternative.The preferred alternative was also compared to the “business as usual” (Zerooption) scenario to determine the likely and expected/predicted impacts ofthe selected alternative over the temporal scope of the assessment.The selected methodology was suitable to a “first generation” StrategicAssessment and particularly well suited to the “bottom‐up” approachadopted for this Assessment. The principal intent of the Assessment was toinform development planning and choice making through a clearidentification of individual planning elements that would constitute anyfuture plan. The process was also designed to ensure that each identifiedplanning element or action was mainstreamed to include management andmitigation measures to offset identified impacts (point source andcumulative).3.12 DESCRIPTION OF THE (ZERO OPTION): BUSINESS ANDUSUAL SCENARIOThe Zero (or business as usual) scenarios consider a development picture ofthe area of influence and selected focus areas in a situation where there isno foreseen development of hydropower on the Punasangchu River Basin.Though this situation is some distance from the reality (the Punasangchu‐1hydropower development has been initiated), it is important to project howdevelopment would evolve over the 20‐year time frame without the catalyticeffect of the hydropower projects on their area of influence.The participants’ consolidated “zero” scenario is presented as Annex‐12.2 ofthis Report.3.13 IDENTIFICATION AND SELECTION OF ALTERNATIVESSection‐5 of this Report details alternative development options proposed byProcess participants and analysed through prospective scenario constructionand expert judgement. Development expected in each of the proposedalternatives was considered relative to the zero (business as usual) scenariosdescribed in section 5.12 above and Annex‐4 of this Report.53

4. OBJECTIVE AND SUB‐OBJECTIVE OF THE STRATEGICASSESSMENT4.1 PURPOSE OF THE OBJECTIVES AND SUB‐OBJECTIVESThe Objective and Sub‐Objectives of the Strategic Assessment serve to guideand focus the Process. Sub‐Objectives ensure that discussions do not drift toout of control. The Objective ensures that all choices and outcomes arecoherent and aligned to both Process and National Objectives.4.2 THE OBJECTIVE OF THE <strong>SA</strong>The objective of the strategic assessment should be aligned to nationalvisions, goals and development objectives. In principle, the objective of theStrategic Assessment can be drawn from the 10 th Five‐Year Plan and adjustedto the specific context of the Strategic Assessment.As such, it was recommended that participants draft their proposed StrategicAssessment objective based on the core development planning principles ofthe Kingdom of Bhutan:“ The core principles of Bhutan’s development planning have essentiallyfocused on fulfilling the fundamental objectives of achieving broad basedand sustainable growth, improving the quality of life, ensuring theconservation of the natural environment, preserving the country’s richculture and strengthening good governanceProcess stakeholders agreed that the <strong>SA</strong> Process objective would be:“To analyse through relevant stakeholder and public participation, anumber of alternative development scenarios expected from investmentsin Projects on Basin II to enable the selection of optimal solutionsdelivering maximum sustainable (GNH) benefits of Bhutan while minimizingthe cumulative impacts of that development”.4.3 IDENTIFICATION OF TOPICS AND THEMES TO BECONSIDEREDThe principal global themes (identified by process participants) to beconsidered during the assessment were climate change, poverty, and waterresources to include basin management and trans‐boundary issues. Of these,climate change typified by: Fluctuating rainfall patterns; flooding events;accelerated glacial melt and glacial outburst floods (GLOF) were all retained54

y workshop participants. As such, these were considered critical to anyconsideration of future development in the geographic and focus areas.Salient issues, identified by process participants, to be consideredthroughout the assessment included but were not limited to:• Protection and conservation of critical and sensitive areas;• Land Tenure and land‐use (current and forecast)• Hydrology and drainage patterns;• Protection of cultural/religious assets and heritage sites;• Cultural dilution;• Settlements and settlement patterns;• Land‐take of the various development and infrastructure options underconsideration;• Habitat and resource fragmentation;• Current and future demand on natural assets (forests, wildlife, minerals,water, land, etc.) both legal and illegal.• Expansion of existing urban areas;• Poverty and migration (at local, national and regional levels);• Trans‐boundary issues (trade, tourism, conservation, transport, criticalresources including water resource management, etc.)• Contamination of common resources (waste discharges, wastemanagement, specific location of primary and secondary industrial areas,etc.);4.4 THE SUB‐OBJECTIVES OF THE STRATEGIC ASSESSMENTThe Sub‐Objectives drafted by process participants and presented below arethe product of consensus and, as noted above, serve to frame and focusdiscussion and prospective analysis of the various alternatives assessed.A Sub‐Objective is drafted and agreed for each of the topics and themesidentified by process participants as critical to the strategic assessment.TOPIC/THEMEClimate ChangeSUB‐OBJECTIVEDevelopment planning and associated investments inthe area of influence of Basin‐2 hydropowerinvestments are directed and planned taking intoconsideration risks and cumulative impacts expectedfrom climate change and systematically introducing55

Watershed andCatchment BasinsEconomicDevelopmentTourism , EcotourismandTourism ServicesEnvironment:Pollution controlWaste ManagementWater ManagementBiodiversityNatural AssetsSocial InfrastructureAgriculture/ForestsCulture and HeritageSecuritymitigation and management measures.Catchment basins and water supplies are mapped,inventoried and effectively managed to ensurecontinued delivery of critical ecosystem services todownstream users and the State.Economic and urban development of Dzongkhags andGeogs directly affected by investment in Basin‐2hydropower developments is planned, coherent,sustainable and, as such, does not impact negativelyon the population, the environment and conservesinter‐generational equity.Development of tourism assets and opportunities inthe area of influence of Basin‐2 hydropowerdevelopments are identified, zoned, promoted,developed sustainably and contribute to national,regional and local development plans (within theprinciples of GNH).Investments and developments in the Basin‐2 area areintegrated into the natural environment / Landscapeby giving a high priority on the quality and limitationsof ecosystems in the area of influence and minimizingnegative environmental impacts.Biodiversity inventoried in the area of influence ofplanned Basin‐2 hydropower investments is enhancedand actions leading to irreversible losses areprevented.Improving the livelihood of the people by providingbetter heath services, education, employmentopportunities, recreational facilities, bettercommunication and financial services.Ensure minimum loss of agricultural land andGovernment Reserve Forest lands while ensuring anadequate supply of land for all future demand as perthe relevant laws of the Kingdom.A. Cultural heritage values and sites are protected andpromoted as social, historical and economic assets.B. Cultural heritage and cultural fabric in the areas ofinfluence is not affected by the development andmigration/displacement have minimum negativeimpactsMeasures to enhance existing security relationshipswith neighbour states to ensure that security risks donot erode economic/social development options andpotential.56

5. ASSESSMENT OF GNH IMPACTS (ENVIRONMENTAL,SOCIAL, ECONOMIC, CULTURAL, SPIRITUAL ANDGOOD GOVERNANCE)5.1 IDENTIFICATION AND SELECTION OF DEVELOPMENTALTERNATIVESThis section of the <strong>SA</strong> Report details development alternatives proposed byprocess participants and considers the likely environmental and socioeconomicimpacts (GNH impacts) expected from the selected (preferred)alternative(s). The section also proposes reasonable measures that would berequired to manage and mitigate identified issues and impacts likely tobecome apparent as the proposed developments and investments arerealised in the area of influence and the selected focus areas over the 20‐year temporal framework of the assessment.1. All proposed alternatives share common features that have shapedall scenarios constructed by process participants. These are describedbelow:2. The proposed developments are focussed in two distinct zonesdescribed as the Wangdi‐Phodrang Punakha area to the north and asouthern area bordered by the Phibsoo Wildlife Sanctuary to the Eastand encompassing a wide area to the north and west of Lhamoizingkaand the Punasangchu River.3. All process participants considered that development in areasadjacent to the Damphu to Sarpang and Gelephu road would alsobenefit from the catalytic effect of hydropower developments onBasin‐2.4. Risks related to climate uncertainty, flooding events and risks relatedto possible and catastrophic Glacial Lake Outburst Flooding eventsshaped the process leading to the elaboration and eventual selectionof alternatives.5. Process participants structured their proposed alternatives relative toNational and sub‐national development priorities.The preferred alternative was selected on the basis of the alternative’scontribution to sustainable development objectives described in the 10 thPlan and detailed in sub‐national plans (including structural plans).57

5.2 DESCRIPTION OF THE PROPOSED ALTERNATIVES OVER THEAGREED TEMPORAL AND GEOGRAPHIC SCOPE OF THEASSESSMENTDevelopment alternatives/options identified by process participants duringthe first consultative workshop and later refined during the secondconsultative workshop are described below:Alternative‐1: Wangdue‐Punakha (including Gasa) develops as a tourismas well as services hub. Southern focal area develops as atourism and industrial area.Description of alternative‐1:Alternative‐1 has a distinct tourism focus. The Northern focal areacomprising an area extending north from the site of the Punasangchu‐1Hydropower project includes the current urban areas of Wangdue‐Phodrangand Punakha and also includes the Mochhu and Phochhu River basins totheir headwaters in Gasa Dzongkhag.A Southern focal area was located by participants north of the border areasadjacent to Lhamoizingka (Kalikhola) and extending West along the newroads being constructed to Phuntsholing via Raidak and Manitar thePunasangchu River north to Sunkosh Bridge and the Eastern regionsincluding the Phibsoo Wildlife Sanctuary, Tsirang and Sarpang Dzongkhags(with a focus on areas adjacent to existing road networks).In this alternative Wangdue‐Phodrang and Punakha develop as a tourism hubcapitalising on its distinct cultural and climatic advantages. Gasa Dzongkhag,located within the Jigme Dorji National Park develops distinct nature basedtourism products and services tourism demand from its neighbourDzongkhags to the south and also provides recreational services to anincreasingly wealthy population from Thimphu.The Wangdue‐Punakha area also develops a vibrant services sector providingspecialist services to the tourism sector and demand from increasing settledpopulations drawn to the area by hydropower developments.The Southern focal area capitalises on improved road networks developed tolink the border areas at Lhamoizingka to Wangdue‐Phodrang, Tsirang,Sarpang, Phuntsholing and Gelephu. The area also capitalises on plannedhydropower reservoirs resulting from the Sunkosh Lift and Sunkosh 4000hydropower projects to develop water based tourism and water basedtransport services.58

Agro‐based industries are established in areas adjacent to Lhamoizingka andin suitable areas adjacent to the Damphu to Gelephu roads. A new high‐endtourism area is planned and developed at a location immediately north ofthe Phibsoo Wildlife Sanctuary on the banks of the Sunkosh Lift Reservoir.Lhamoizingka expands to become a major entry and distribution hubservicing central Bhutan.Participants developing this alternative forecast the following points:Gasa Dzongkhag develops a niche market based on community‐basedecotourism where the local communities are directly involved in the touristmanagement and are benefitting from it. The Dzongkhag also develops as arecreational area for the local tourists (especially near by Dzongkhags). Thedifferent product packages offered are (amongst others): Organised andserviced camping areas in the vicinity of the hot springs; Organised trekking;High‐end and mid‐range lodge type accommodation on trekking routes;Cultural site visits; Photographic treks; Bird watching; Farm stay holidayswith traditional experience; Organic farming; River based activities such asrafting and hydrospeed; Concession based tourism activities and others.Both Punakha and Wangdue develop full‐fledged tourism cultural andwater‐based tourism industries. Hotels and resorts are planned in selectedsites adjacent to the Punasangchu, Mochu and Pochu Rivers. Hotel, resortand recreational sites and amenities are located in suitable and GLOF safeareas. Expansion of Wangdue‐Punakha leads to expansion of the financialservices sector and the establishment of numerous businesses and servicecentres.Tsirang and Dagana Dzongkhags develop agriculture based tourismindustries with water‐based tourism along the Punasangchhu – Sunkoshbasin. The central location of Tsirang precludes development of tourismservice facilities and those tourism investments that are attracted to the areawill cater primarily to business tourism and farm stay tourism.Development of Sarpang Dzongkhag, over the temporal framework of theassessment, is focussed on expansion of agro‐based industries located inwell‐serviced industrial estates.Alternative‐2: Wangdue‐Punakha is developed as a light industry andmanufacturing area. The southern focal area is developed foragro‐industries and trans‐boundary trade centres.Description of alternative‐2:Radically different from Alternative‐1, this alternative does not have anytourism focus. Process participants chose to address this development59

option to test whether a future for the area structured on industrialdevelopment, manufacturing, trans‐boundary trade and agro‐basedindustries could deliver optimal development outcomes for the area ofinfluence and its population.To this end, participants developed the alternative over the 20‐year temporalframework and considered that:There would be a significant expansion of private sector activities that wouldlead to improved income generation opportunities both for investors andemployees. The alternative developed considered that the industrial andmanufacturing base would emanate from agro‐based industries. The overalloutlook over the 20‐year time frame would be a generalised improvement inthe living standards of the population.On the negative side, participants considered that the alternative would becounter to national sustainable development principles in that it would leadto: Increased land transformation; Deforestation to make additional landavailable in identified development focus areas; increased demand onnatural resources (renewable and non‐renewable); increased noise, waterand air pollution; increased generation of solid and liquid wastes that woulddemand the introduction of consequent and effective management andwould also require space for the installation of waste treatment facilities.Participants also considered the likely implications of this alternative on thecultural integrity of the population.Alternative‐3: Wangdue‐Punakha develops as a major urban centre withinternational and national standard services in tourism and afocus on East‐West South distribution hub. The southern areais developed as an entry port and SEZ/Industrial area.Description of alternative‐3:The Alternative foresees that the urban areas of Wangdue and Punakhamerge to form a single urban entity within the 20‐year time frame of theassessment. The principal activity is focused on tourism and service deliveryto the tourism sector and hydropower sector as demand for servicesincreases of the assessment period. Wangdue‐Punakha receives anddistributes goods arriving from the SEZ in the southern focal area.In the southern focal area, the alternative considers the establishment of afunctional Special Economic Zone (SEZ) that serves to stimulate investmentsin specialized light industry, manufacturing and agro‐based industries. TheSEZ includes a “dry port” and becomes an entry port and hub servicing thecentral region of Bhutan. The SEZ and “dry port” are connected to theWangdue‐Punakha conurbation, the East and West by an efficient network60

of highways. A network of district and feeder roads links outlying settlementsto the principal trunk roads.The Alternative was described by Process participants as:Series of town planning phases are completed over the assessment periodultimately merging Wangdue‐Punakha town. Distances between other urbanareas and districts are further reduced through improved road network androad tunnelling. Service industries, high‐end international standard hotelsare established and new tourism products developed to cater to bothnational and international tourists. Some administrative headquartersmoved to Wangdue‐Punakha. Recreational facilities are created and a majorurban centre and serve as distribution hub for east, south and west. Thesouthern area becomes a SEZ with the establishment of an internationalairport, railway connectivity and the establishment of a dry port anddevelopment of industrial area in the south to derive maximum benefit fromthe hydropower developed along that basin.Alternative‐4: Wangdue‐Punakha services international and nationaltourism and is an East‐West‐South trade and distributionhub. The Southern focal area is developed as a SpecialEconomic zone and industrial area.Description of alternative‐4:Alternative‐4 is similar to Alternative‐3 but its focus is on expansion of thetourism and trade sectors and does not consider expansion of Wangdue‐Punakha into a larger conurbation over the 20‐year time frame of theassessment.Process participants charged with the elaboration of a development scenariorelative to this alternative focused on the following salient points:1. The alternative would lead to the creation of a more dynamic tourismsector based on the national principles of ‘high value and low volume’,balancing economic development and preservation of culture heritage.Participants considered that expansion of a vibrant tourism industry in thearea of influence would boost employment opportunities and contributetowards poverty alleviation.2. The alternative would lead to the establishment of small‐scale industriesresulting in broad based growth. The Wangdue area would develop into amarket centre and service provider as efficient trade and transit routes toneighbouring districts like Trongsa, Zhemgang, Bumthang were expandedand developed.61

3. The Southern focal area would be developed into a Special Economic Zonethrough the enhancement of business development services. These wouldidentify and promote investment opportunities, enterprise and skillsdevelopment and the establishment of one window clearance system.4. The alternative would also lead to the expansion of surface transportinfrastructure such as highways, road and bus terminals; all aimed atproviding safe, clean and increasingly affordable access to public transportservices.5.3 REJECTED ALTERNATIVES AND RATIONALE FOR REJECTIONOnce development scenarios for each of the four proposed alternatives werecompleted and presented, discussed and debated in plenary session,participants were requested to vote for their two preferred alternatives. Thevoting process was by secret ballot and results were tallied in the presence ofall participants.The voting procedure showed that there was a clear preference forAlternative 3 and the second ranked alternative was Alternative‐4. As such,participants agreed to merge alternatives 3 and 4 and elaborated a preferredalternative described below in section 5.4.The table below details the reasons and logic (evoked by stakeholders) foreither rejecting or retaining the various alternatives:ALTERNATIVEAlternative 1:Wangdue‐Punakha (includingGasa) develops as a tourismas well as services hub.Southern focal area developsas a tourism and industrialarea.Alternative‐2:Wangdue‐Punakha isdeveloped as a light industryand manufacturing area. Thesouthern focal area isdeveloped for agro‐industriesand trans‐boundary tradecentres.Alternative‐3:Wangdue‐Punakha developsas a major urban centre withinternational and nationalREASONS FOR REJECTION• Process participants rejected the alternative given thatit did not include sufficient elements to fully capitaliseon development opportunities in both the focal areasand the overall area of influence considered in thisassessment.• Participants also considered that the alternative wasmissing critical connectivity to external and internalmarkets provided by the establishment of a “dry port” atLhamoizingka (Alternative‐3).• Process participants did not consider that theattributes and comparative advantages of the areawould be best served if development focused onindustry and manufacturing.• Participants considered the alternative missed thetourism dimension.• As such, Process participants rejected the alternative.• The Alternative was retained and merged withAlternative‐4 below to elaborate the preferredalternative detailed in section 5.4 of this report.• Participants considered that Wangdue‐Phodrang and62

standard services in tourismand a focus on East‐WestSouth distribution hub. Thesouthern area is developed asan entry port andSEZ/Industrial area.Alternative‐4:Wangdue‐Punakha servicesinternational and nationaltourism and is an East‐West‐South trade and distributionhub. The Southern focal areais developed as a SpecialEconomic zone and industrialarea.Punakha would merge into a large urban area within the20‐year temporal framework of the assessment.• Participants considered that establishment of a “dryport” in Lhamozingkha (Kalikhola) would be likely withinthe temporal framework of the assessment.Furthermore, participants considered that a “dry port”would significantly enhance economic developmentopportunities of the central Dzongkhags (the area ofinfluence).• Process participants chose to retain this alternativeand voted to merge Altrnativ‐4 to Alternative‐3.• The merged preferred alternative is detailed below insection 5.4 of this Report.63

5.4 THE PREFERRED ALTERNATIVEThe preferred development alternative selected by process participants isdetailed below. As mentioned previously, this alternative is the result of themerging and reformulation of Alternatives 3 and 4 described above in section5.2.PREFERRED ALTERNATIVE (Merged Alternatives 3 and 4)WANGDUE‐PUNAKHA AND GA<strong>SA</strong> DEVELOP INTERNATIONAL ANDNATIONAL STANDARD SERVICES IN TOURISM WITH WANGDUE‐PUNAKHA AS A MAJOR URBAN CENTRE (CONURBATION).THE SOUTHERN FOCAL AREA DEVELOPS AS A TOURISM ANDINDUSTRIAL AREA, SPECIAL ECONOMIC ZONE AND ENTRY PORT.5.5 DETAILED DESCRIPTION OF THE PREFERRED ALTERNATIVEFigure‐xx: Principal features of the Area of Influence considered during theStrategic Assessment64

ITEM NUMBER DECRIPTION1 Gasa Dzongkhag2 Pochu River. GLOF risk3 Punakha Dzongkhag4 Mochu River. Extreme GLOF risk5 Wangdue‐Phodrang Dzongkhag6 Punakha Dzong and Town7 Wangdue Dzong and Town8 Punasangchu River9 Punasangchu‐1 Hydropower Project10 Punasangchu‐2 Hydropower Project11 Dagachu Hydropower Project and Reservoir12 Sunkosh 4000 Hydropower Project with its 52 km. reservoir13 Sunkosh Lift Hydropower Project with its 13 km. reservoir14 Lhamoizingka development area. Border crossing to India15 Dagana DzongkhagTsirang Dzongkhag. Highway connecting Wangdue to16Sarpang and Gelephu.Sarpang Dzongkhag. Regional airport and Jigmiling Industrial17 Estate. Phibsoo Wildlife Sanctuary to the West bordering thePunasangchu/Sunkosh River.DESCRIPTION OF THE AREA OF INFLUENCE:Gasa Dzongkhag and the Jigme Dorji National Park define the northern limitsof the area of influence. Gasa, Lunana and Laya regions are both the sourceareas for the Punasangchu River and are integral to the National Park. Assuch they remain undisturbed and development is limited to non‐impactingeconomic development such a nature‐based tourism and limited agriculturalactivities.A northern area, namely the Wangdue and Punakha valleys, Wangdue‐Phodrang and Punakha Dzongkhags is designated as a development focalarea and expands as tourism investments; services, light industries and tradedistribution facilities are established.The area between Wangdue and Sunkosh Bridge (a linear distance of 70kilometres) remains virtually free of development except for a Hydrocompound to be established on a 36‐hectare site at a location known asPinsa.A southern focal area comprising Dagana, Tsirang and Sarpang Dzongkhagsare likely to undergo major physical and occupational transformation as aresult of: Hydropower developments on the River basin; the establishment ofa Special Economic Zone, industrial estate and support services in the65

Lhamoizingka (Kalikhola border area), expansion of agro‐based industries inTsirang and Sarpang; Development of high‐end and mid‐range tourismfacilities benefitting from established reservoirs and the southernconservation areas; further development of transport infrastructures;improved trans‐boundary and national connectivity and finally the probableestablishment of a regional airport at Lhamoizingka.The area of influence is likely to also extend East to Gelephu (includingJigmiling) and West towards Phuntsholing.Process participants were requested to construct development scenarios forthe selected preferred alternative. The edited results of this exercise aredetailed in the sections below. The scenario constructed describesdevelopment in the area of influence over the 20‐year temporal frameworkof the assessment.A. State at Time‐0 (2009):Economy: International tourism is gradually expanding. A limited number ofhotels and resorts exist or are being constructed but these are generally notto international standards. There are no recreational facilities in place exceptfor a few rough soccer fields. Most of the population resides in rural areasand practice subsistence farming. Trading limited to consumer goods,agricultural produce and limited exportable goods such as potatoes. Socialservice facilities to resident populations are limited and of low standardDzongkhag and Geog administration are increasingly effective as their roleand responsibilities are adjusted in line with the decentralisation process.Transport & Communication: The roads network is functional butcharacterised by narrow roads. Traffic volumes are low and there isconnectivity to the Eastern Dzongkhags to the West (Thimphu, Phuntsholingroads are being planned to connect Lhamoizingka to Phuntsholing viaManitar and to Daga and Wangdue via Geserling. A fast north‐south trunkroad linking Lhamoizingka to Wangdue aligned in a position adjacent tofuture reservoirs on the Punasangchu River are not considered at this time.During Tenth Plan feeder and farm roads will join major settlements withinthe basin. In the south the proposed regional airport at Gelephu would beinitiated. Segments of the southern East‐West highway will be constructed. Apossible rail connection linking the Samtse to Samdrup Jongkhar remains adistant option yet to be considered. A rail link joining Pasakha to the railNetwork in India has been agreed and an Industrial Estate proposed forJigmiling could be initiated.Environment & culture: The state of the environment in the area ofinfluence and both focus areas is still pristine although impacts attributed tofarm road construction and the disposal of spoils from hydropower projectsand urban expansion are rapidly becoming an issue requiring urgent66

attention. Further impacts are being generated from the construction ofhigh‐tension transmission lines, rural electrification infrastructures andurban expansion of the major population centres such a Wangdue andPunakha. Culture and tradition remains undiluted and well preserved.Urbanization: Urbanization still in its infancy with heavy state support forplanned city/town development at Khuruthang and Bajo. Lobesa, Rurichuand Nobding just growing into satellite towns. Lobesa is expanding rapidly asa result of demand for space and structure generated by the Punasangchu‐1hydropower project.Major projects/activities: Punasangchu hydropower project Phase I initiatedwith a surge in immigrant workers population along River basin concentratedbetween Khuruthang and Lanitsawa. Convergence of local trading populationin same area mostly engaged in consumer goods trading. Local contractorsmostly employed in minor civil works provided by PHPA. Plan is on way tobuild a new hospital at Rinchengang and expand Rinchengang CPS. Privateand GRF land along Tsirang Wangdue highway frozen for private buildingconstruction to ensure land required for the project is available. Similarfreezing of development along proposed Sunkosh affected area needs to beconsidered urgently.B. State at T+5‐years (2014):Economy and development: By 2014, the Tenth Five Year Plan will havebeen completed and Eleventh Five Year plan launched. The tourism sectorwill have developed considerably in the Wangdue‐Punakha area with theaddition of a number of international standard hotels, resorts and lodges.Eco‐tourism trails and supporting infrastructure are place in suitablelocations in the area of influence. Gasa Dzongkhag will have rehabilitatedand expanded facilities at Gasa Tshachu and opened few more nature andtrekking trails increasing possibilities for revenue generation by ruralpopulations. GDP doubles due to Industrial Estates and the injection ofmoney into the economy resulting from the economic multiplier effect ofmajor hydropower projects (Punasangchu I, II, Sunkosh, Mangdechu, Kuri‐Gongri, Chamkharchu I and II, Dagachu and Kholongchu) under construction.In the agriculture sector, the production of cereals would slump owing to aproduction shift towards in cash crops.Major projects/activities: The Punasangchu‐I hydropower project will bemidway through its construction. The Punasangchu‐II and Sunkoshmultipurpose hydropower project will have been initiated.Demography & settlements: Immigrant and migrant workers population willhave reached 20,000 and will be concentrated in areas downstream ofLobesa till Pinsa. In the lower focal area immigrant and migrant populationwill be concentrated at Samakhola, Homakhola and Kerabari area. Local67

Bhutanese population engaged in project related works and trading reachesabout 5,000. Wangdue‐Punakha is slowly merging as a major urban area witheconomic activities centred on trading, construction and tourism services.Rurichu, Lanitsawa and few pockets of settlement become established in thevicinity of major hydropower building sites. Pressure on social services andpublic service facilities increase drastically, especially education, healthservices, roads and drinking water.Strategic & Social infrastructures: Bridge construction begins to improve theconnectivity of Wangdue and Punakha. A study to assess the feasibility of aroad tunnel connecting Thimphu (the administrative capital) and Punakha‐Wangdue is commissioned and executed. 95% of rural Bhutan is now fullyelectrified; Primary education facilities are available to nearly 100% of thepopulation; Health infrastructures are in place though staffing would still bedeficient. The North‐south road (Thimphu‐Gelephu‐Dagana‐Lhamoizingka) iscompleted or nearing completion. Telecommunication facilities and Internetservices are available throughout Basin‐2. All Geog centres in the basin arereachable by all weather roads. Most major settlements in Basin II have farm/ feeder roads.A decision is made to initiate tunnelling between Wangdue‐Punakha andThimphu and between Paro and Thimphu to reduce time required for travelbetween these cities, improve connectivity and reduce transport costs.Environment & Culture: Major earth cutting and excavations along the basinleading to increased landslides, siltation of rivers and streams due to thedumping of spoils, road inconveniences, loss of vegetation and loss ofbiodiversity. The pressure on forest resources increases significantly as aresult of increasing demand from the construction sector. Air, waterpollution and solid wastes generation increase significantly in line withincreased population and economic activity.Cultural dilution becomes increasingly evident. The traditional joint familysystem disintegrates. Money begins to dominate traditional cultural valuesand the erosion of traditional value system becomes apparent. Erosion of thetraditional family structure and value system leads to an increase in smallscalecriminality.C. State at T+10‐years (2019):Economy & development: The 11 th Five Year Plan is completed andevaluated. The 12 th Five Year Plan has been prepared using mainstreamingand consultative techniques (now used systematically at all levels ofgovernment) and has been launched. The Punasangchu‐I and II, the Dagachu,Kuri Gongri and the Kholongchu hydropower projects are completed,commissioned and begin to generate significant revenues to the Kingdom ofBhutan. Dependence on foreign development assistance is terminated.68

Foreign Direct Investment and Funding will still be required to finance megaprojectssuch as hydropower development, transport infrastructure, arailway linking the border Dzongkhags, airports and GLOF risk mitigationworks. The balance of trade statistics show very significant positive growth.In the Wangdue‐Punakha focal area, light industries, food processing,tourism and service industries are the principal sources of employment andrevenue generation. Gasa Dzongkhag diversifies their nature‐based offer oftourism products and service both national and international tourismmarkets. Gasa develops a line of products based on health and wellness andbegins culturing medicinal plants (including the means to culture andsustainable harvest of Cordyceps sinensis) to enhance revenue generationopportunities of rural and distant communities. At the national level, theprivate sector expands and becomes the principal contributor of the nationaleconomy. Government takes up the responsibility of macro‐planningregulatory functions. The rural economy will be predominated by cashearning activities in agriculture and livestock and food security will becomemore vulnerable. Dependence of food grains from India and otherneighbouring countries will increase with a decline in national production.At this time, construction of the Sunkosh 4000 and Sunkosh Lift multipurposeprojects is still on going in Basin‐2. Hydropower projects in other Basins areidentified, planned and under construction. Industrial estates and SpecialEconomic Zones planned and developed in the Southern focal area becomeoperational and investors begin constructing their facilities.Demography & settlement: Khuruthang and Bajothang towns merge as aresult of settlement and increased population density. There will bemigrations from neighbouring districts and villages to the urban centre. Thegradually over crowding of the merged town will see increased pressure onthe existing services and facilities which will need to be expanded. The livingstandards of the people would have increased significantly.Strategic & Social infrastructures: Bridges connecting the Punakha‐Wangdue conurbation is completed. Road tunnelling begins betweenThimphu and Punakha‐Wangdue town. 100% of rural Bhutan comes underon‐grid electrification; Primary education facilities are readily available to100% of the population; Health services and facilities are in place andqualified staffing is increased. North‐South road (Thimphu‐Gelephu‐Dagana‐Lhamoizingka) is completed. Telecommunication facilities covered all cornersof Basin II. All Geog centres in the basin are reachable by roads. Most majorsettlements in Basin II have farm / feeder roads.The road from Lhamoizingka to Geserling needs to be replaced with moredirect trunk roads, preferably aligned on both banks of the water bodiescreated by the Sunkosh 4000 and Sunkosh Lift hydropower/watermanagement projects. Interior connecting feeder roads network will need tobe expanded. Investments for the establishment of ports/ferries will need to69

e considered. Other employment generating activities on the periphery ofthe reservoirs (aquaculture, tourism, transport services, etc.) will beidentified and created as these activities come on line.Environment & Culture: Major earth cutting and excavations along the basinwould be completed and soil stabilization begins to take place. Restoration oflost vegetation and studies and protect wild life in the affected regions iscompleted. Lessons learned are applied to other Basins where hydropowerdevelopment projects are either being implemented or planned. Forests arethreatened by increasing demand for timber and forest cover targetsstipulated in the Constitution of the Kingdom of Bhutan are at risk. Air andwater pollution increase in areas with insufficient management andtreatment facilities. Solid waste disposal becomes severe issue owing topopulation concentration along the basin.Cultural dilution becomes increasingly evident, joint family systemdisintegrate. Money dominates and loss of value system.Investments must be made by the projects or the Department of Forest tore‐vegetate damaged areas on river basins subjected to hydropowerdevelopment, road construction and urban expansion. Recreational sites andgreen belts need to be developed all along the highways in the Basin.Biodiversity Inventories and robust natural resource management will needto be systematically applied to support and assure sustainable expansion ofthe tourism sector.D. State at T+20‐years (2029):Economy & development: Four Five‐Year Plans have now been completed.National Revenues are the principal source of financing. The Private sectorbecomes main engine of economic growth. Food security is enhancedthrough the introduction of high yield agriculture methods. The reliance onfood and grain imports decreases as both the agricultural and agro‐industrialsectors diversify to meet national demand.The south comprising Dagana, Tsirang, and Sarpang is developed as a SpecialEconomic Zone with an emphasis on small and medium industries. Heavyindustries generating limited pollution would be encouraged but allowedonly on completion of rigorous impact assessment and verification thatproposed environmental management procedures are within pre‐definedstandards and norms of the SEZ. The SEZ would be provided with powergenerated in Basin‐2 and industries will be encouraged to source rawmaterials locally. Aquaculture, water based tourism and recreation productsand water‐based transport services will be encouraged and promoted. Scopefor additional industrial development areas in the southern area of influencewill be identified and developed. In the rural areas (farming community)promotion of agro‐based and NWFP based small and medium industries will70

e promoted. Tsirang and Dagana will be declared as areas exclusively forcertified organic farming.Construction of the two Sunkosh multipurpose hydropower projects iscompleted and the facilities commissioned. Bajo‐Khuruthang town becomesfully functional with increased trade activities and becomes distribution hubfor the other neighbour districts. Economic activities in the south increasewith: The completion of SEZ’s; the construction of functional internationaland regional airports at Lhamoizingka and Gelephu; Railway connectivity toall Southern Dzongkhags and from these to the Indian National Railwaynetwork; and the establishment of “dry ports” to facilitate trade. Economicactivities have now diversified to meet national and international demand.Aquaculture and water based recreation becomes very prominent.Investments must still be made for improving the connectivity from ruralpockets to the trunk roads.Demography & settlement: Khuruthang and Bajothang town have mergedand opportunities generate increased rural to urban migration fromneighbouring districts and villages. The rapidly expanding population willresult in increased pressure on the existing services and facilities that willneed modernisation and expansion. The living standards of the populationhave improved significantly. Investment will be required to develop andupgrade water supply networks, wastewater and solid waste managementsystems. Urban and satellite town development will have to be strictlyregulated through agreed structural and development plans. Theconcentration of population in the urban and semi‐urban areas will call forstricter security and social service facilities. The Central governmentrelocates key Ministries to Wangdue‐Punakha given the existence of therapid tunnel road between Thimphu and the conurbation.Strategic & Social infrastructures: Bridges connecting the towns ofKhuruthang, Wangdue and Lobesa are completed. Road tunnelling betweenThimphu and the Punakha‐Wangdue conurbation is completed townsignificantly reducing travel time between Thimphu and Paro and enhancingconnectivity to the Eastern Dzongkhags. All communities and settlements inBhutan are now electrified; Primary and secondary education facilities areavailable to all; Health infrastructures and services are readily accessible andthe average age of the population increases significantly. New fast trunkroads linking Lhamoizingka to Wangdue Punakha are constructed openingopportunities for new tourism developments on the banks of the Sunkosh4000 and Sunkosh Lift reservoirs. The North‐South road linking Wangdue toGelephu is upgraded to international highway standards. The Road linkingWangdue to Daga, Geserling and Lhamoizingka is downgraded to a principalDistrict road. Telecommunication facilities covered all corners of Basin II. AllGeog centres in the basin are accessible by good quality roads with assuredyear‐round passage. All principal settlements in Basin‐2 are connected to thehighway and trunk road network through all season farm / feeder roads.71

Trans‐boundary transport and communication would have been improvedtremendously through the national southern railway, multiple rail links toIndia and a Southern East –West highway that complements the railnetwork. The Southern East‐West Highway serves to distribute goods andservices to communities and businesses adjacent to rail stations and transferstations. The cost of fuels encourages trucks to opt for “truck on flatbedrailway solutions”. The Government invests strategically to expand publictransport infrastructures.Environment & Culture: Major earth‐moving works in the Basin arecompleted. Impacts generated from the disposal of spoils (dams, roads,tunnels) have been reduced as a result of a policy of re‐use and recycle.Historical spoil dump areas are either restored or stabilised. Impacted areasare converted to plantation forests. Demand for timber products continuesto expand and loss of natural forest is offset through plantation forests.Air, and water pollution remain critical issues that require continuousupgrading of treatment facilities and controls to enforce national emissionstandards. State of the Art solid waste management is systematicallyintroduced to all urban, and industrial areas.Security issues: With the opening of the south as the entry point for tradeand commerce and with the expected huge movement of goods and peoplethere will be security issues both external and internal to the people andproperties. This will demand government to reinforce security measures inborder areas and elaborate innovative border management procedures tofacilitate the safe movement of people and goods. At T+20 it is highly likelythat friendly relations between India and Bhutan will have evolved to anopen border policy with joint security procedures to assure the safety of thepopulation.5.6 IDENTIFIED RISKSProcess participants were requested to consider elements of risk that wouldor could have a bearing on their proposed scenarios.For the purpose of the Strategic Assessment, risk is treated as an event thatcould have a direct or indirect impact on development forecast for any givenscenario. In addition, the element of risk is categorised as likely, unlikely oruncertain within the temporal framework of the assessment. The element ofrisk is also categorised according magnitude of the event and treated aseither critical or not critical.In all cases, identified risk must be mitigated and managed. Selectedmanagement and mitigation measures must be systematically introduced toboth Dzongkhag and National Development Plans (Five‐Year Plans andAnnual Plans).72

If an element of identified risk were both critical and uncertain then itwould preclude any investment or development in areas likely to beaffected by the risk element in question.The Strategic Assessment identified Glacial Outburst Flooding of Basin‐2 asa critically uncertain risk and therefore demands that risk areas beidentified and regulated to exclude all structural or infrastructuredevelopment. Management options are described in Section‐7 below.RISK CATEGORI<strong>SA</strong>TIONProcess participants identified the following Risk elements:ISSUE DIRECT INDIRECT T‐0 T+5 T+10 T+20 COMMENTSHigh risk of GLOFGLACIAL LAKEoutburst at any time.CatastrophicOUTBURST FLOOD YES NO CRITICAL UNCERTAINTY consequences to(GLOF)downstreamsettlements andinfrastructures.Reservoir InducedEarthquakes have beenreported from theRESERVOIRRegion (RFS). A majorINDUCEDYES YES UNCERTAINQuake such as ChinaEARTHQUAKEcould have significantand catastrophicdownstream impacts.Global warming:Drying up of waterCLIMATE CHANGE YES NO LIKELY AND CRITICAL sources. Increasedincidence of floodingevents.ENVIRONMENT YES YES LIKELYEnvironmentdegradation: Water, air,soils, natural resources,landscape.SECURITY NO YES LIKELYIncreasing migration tourban areas. Increasedtransboundarymovement ofconstruction workers.Transboundary issues:resource based andpolitical.POPULATIONRural‐urban migration,YES YES LIKLEY AND CRITICAL FROM T+10EXPLOSIONinflux of laboursHazards due to Glacial Lake Outburst Floods on the Mochu, Pochu and upperPunasangchu Rivers have been partially mapped by the Department of73

Geology and Mines of the Ministry of Economic Affairs. Hazard mapping andimpact characterisation has been supported by the Netherlands ClimateAssistance Programme (DGM‐NCAP Project to Prepare Hazard Maps of thePunasangchu River from Khuruthang to Lhamoizingka).The DGM‐NCAP project has identified 5 potentially dangerous glacial lakes onthe Mochu Basin and 9 potentially dangerous Lakes on the Phochu RiverBasin. The Hazard mapping activity, reported by Karma in 2003(www.nlcap.net/fileadmin/NCAP/Resources/Bhutan_presentation_IPM08.pdf), classifies riverbanks into high, medium and low risk areas and providesan indication of the economic, social and environmental impacts that couldbe expected.Concerns regarding the possibility of Reservoir Induced Earthquakesgenerated as a result of the creation of the Sunkosh 4000 and Sunkosh liftreservoirs needs to be seriously considered. Proximity of the reservoir sitesto the Indian Plate subduction zone could lead to aggravated earthquakesincreasing the risk of dam failures, catastrophic flooding and structuraldamage to adjacent structures. A revision of construction norms andstandards to strengthen earthquake resistance in areas likely to be affectedwill have to be carried out and strictly enforced.For the purpose of this Strategic Assessment it is strongly recommended thatStructural Plans, Spatial Plans and other periodic Development Plansintegrate the findings of the Department of Geology and Mines to ensurethat high‐risk areas remain free of structural development andrecommended in this report.5.7 MACRO‐ZONATION OF THE NORTH AND SOUTH FOCU<strong>SA</strong>REA<strong>SA</strong>nnex 12.2 details the salient features and conditioned macro‐zonation ofthe northern and southern development focal areas selected by processparticipants.The Annex also describes a digital cadastre based development and impactmanagement procedure that could be applied in the Kingdom of Bhutan to:Support effective and timely environmental management; trackenvironmental reporting according to agreed schedules between investorsand relevant authorities; integrate sectoral information into a singleinformation system; lay the foundation for a national GNH informationexchange system.74

5.8 DESCRIPTION OF THE EXPECTED IMPACT ON NATIONALSUSTAINABLE DEVELOPMENT OBJECTIVES (LOCAL,REGIONAL AND NATIONAL)Process participants unanimously selected the preferred alternative as theone most likely to deliver optimal develop outcomes at the local, regionaland national levels. The development scenario described in section 5.5 aboveis a likely and realistic opinion of how development is likely to be shaped bythe selected alternative.In addition to the constructed scenario, participants were also requested toconsider the contribution of the alternative to national developmentobjectives at Local, Regional and National levels. The opinion of processparticipants is presented below.Overview of the Development Outcomes at T+20 years:Through investments and expansion of a tourism oriented private sector,expansion and improvement of public sector services, the development of afunctional and operational trade hub in Wangdue‐Punakha, theestablishment of a Special Economic Zone in Lhamoizingka, investments inmanufacturing and light industries in the Southern focal area, diversificationof the tourism offer in the South and improved transport options andinfrastructures, it is expected that significant benefits will be accrued to bothDzongkhags in the area of influence and to the Nation as a whole. Theproposed development alternative would lead to increased revenuegeneration, employment, improved standards of living, enhancedenvironmental management, poverty alleviation and ultimately contributeeffectively to National GNH goals.At the Local Level: The preferred development alternative would contributeto planning and investment aimed at a generalised improvement of basicamenities and public services. Merging of the Wangdue and Punakha urbanareas into a single municipal structure would assure coherent developmentplanning, expansion and cost savings resulting from the construction ofcommon facilities such as: Waste water treatment plants; Sanitary Landfills;Sewerage; Underground electrical transmission lines and distribution points;Shopping recreational centres.Investments in the tourism and services sectors will lead to increasedemployment and a generalised improvement in the livelihood of thepopulation.Recognition that Glacial Lake Outburst Floods (GLOF) would result incatastrophic destruction of structures and infrastructures in identified riskareas would lead to a revision of existing Structural Plans of all urban andperi‐urban areas in the risk areas. Identified GLOF risk areas would be75

delineated and treated as public recreational sites. Public safety would beguaranteed by n effective warning system operated and maintained bydesignated State institutions.At the Regional Level: The preferred alternative would lead to the designand development of an efficient transport infrastructure comprising: FastNorth‐South trunk roads connecting the border areas to Wangdue‐Punakha,Thimphu and the Eastern Dzongkhags; Improved connectivity would beenhanced through construction of an East‐West railway linking South‐Eastern Trashigang (Jampani) to Sibsoo‐Samtse Dzongkhag in the West;Regional and international airports at Lhamoizingka and Gelephurespectively; A road tunnel linking Wangdue‐Punakha to Thimphu;Introduction of water based transport on reservoirs created throughconstruction of the Sunkosh 4000 and Sunkosh Lift hydropower project andexpansion of District, feeder and farm roads linking near and distantcommunities/settlements.The alternative would also lead to improved delivery of financial services toall communities in the area of influence. In addition, there will be increasingdemand for local agricultural products to meet the requirements of agrowing urban and peri‐urban population and that of the tourism sector.The Region will become an economic engine for regional and nationalgrowth. As such, the region will become a driver of rural‐urban migration andpartly responsible for population shifts that could lead to a reduction ofagricultural production, contribute to national food insecurity and thetransformation of rural landscapes through abandonment.Regardless of the negative aspects of the alternative, Process Participantsconsidered that its contribution to sustainable development (GNH)objectives at the regional level outweighed the negative aspects, which theyconsidered could be managed systematically and effectively.At the National Level: The preferred development alternative would lead to:Increased GDP and a concomitant decreased need to secure financing fromexternal sources and cooperating partners.The Alternative would also contribute significantly to: National povertyalleviation targets; National development targets specific to employment,education, service provision, life expectancy, state of the environment,disaster preparedness; industrial development; economic diversification;balance of trade and others.76

6. ENVIRONMENTAL AND SOCIO‐ECONOMIC IMPACTSStakeholders forecast likely environmental and socio‐economic impacts likelyto become apparent as a result of the realisation of their preferredalternative over the geographic and temporal scope of the StrategicAssessment. The section below represents the exact and consensual opinionof Process Participants. The analysis is considered correct for the purpose ofthis Assessment and represents their opinion based on their expertjudgement.Predicted impacts are characterised and grouped according to type and areconsistent with scenarios constructed for the preferred alternative.Appropriate management and mitigation measures for each identifiedimpact are proposed in Section‐7 of this Report.1. Urban ExpansionThe development scenario foresees rapid expansion of the Wangdue‐Punakha urban areas and gradual expansion Lhamoizingka in line with theestablishment of a Special Economic Zone, Industrial Estates and expandedadjacent agricultural areas. Likewise, the preferred development optionforecasts expansion of Tsirang, Sarpang, Gelephu, Damphu and Daga.Though urban growth is forecast in all existing urban areas, the principalexpansion will be in Wangdue‐Punakha that will absorb all villages betweenPunakha and Wangdue and Lhamoizingka during the latter stages of the 20‐year temporal framework.Process participants predicted that the following impacts would becomeapparent as a result of urban expansion and population growth:Environment and Socio‐economic impact characterisation:• Land Transformation: Conversion of Government Reserve Forest orsettled land to accommodate urban expansion. Resettlement andcompensation of resident populations could be envisaged.• Solid Waste: Significant increase in solid generated wastes from bothresidential and non‐residential areas; Disposal of building wastebecomes an issue; Increase in domestic waste and packaging; Significantincrease in organic waste.• Waste Water: significant increase in wastewaters and sewage generatedby residents and business users; Continued use of septic tanks leads tocontamination of groundwater supplies;• Water Pollution: Contamination of wells and ground source potablewater as a result of infiltration due to surface cleaning (roads and77

vehicles); contamination due to illegal waste water dumping;contamination due to inappropriate disposal of waste oils;Contamination due to accidental spills (fuels, oils, chemicals, fertilizers,pesticides, etc.); Direct discharge of untreated waste water impacts thePunasangchu River and its tributaries impacts aquatic biodiversity andwater quality.• Air Pollution: Expected from vehicle emissions and waste incinerationand inappropriate waste disposal; Increased use of fuel wood.• Noise Pollution:• Natural Resources: Extraction of building materials (aggregates, stoneand boulders, Cement, wood products); localised resource depletion;Landscape changes; Impacts on the sustained provision of ecosystemservices.• Public Health: Increased Prevalence of HIV/AIDS in populated areas;increased incidence of communicable diseases.• Incompatible Development:2. Tourism SectorCurrently the tourism industry in the area of influence is underdevelopedrelative to its physical, natural and cultural attributes. As National and localinfrastructures develop it is expected that investment in the tourism sectorwill expand rapidly with a concomitant significant increase in both positiveand negative impacts resulting from that growth.Environment and Socio‐economic impact: While tourism enhancesenvironmental protection, employment and income generation. It isexpected that there will be a significant increase in water consumption,waste generation, energy consumption, groundwater contamination, airpollution and cultural erosion. Likewise there is a possibility for theprevalence of HIV/AIDS to increase in adjacent areas. A rapid and significantincrease in tourism in the area of influence could result in increased costs ofliving for local inhabitants and increasing land values making access to landdifficult to local residents. Increasing social marginalisation.The preferred alternative foresees a rapid expansion of internationalstandard hotels, resorts and lodges in the northern and southern focal areasof the area of influence. Lower standard hotels and inns servicing local andbusiness market segments will also become established in significantnumbers. The sector will also result in the establishment of recreationalfacilities (amusement parks, cinemas, restaurants, etc.) all of which willrequire space, generate waste and social change. Participants also indicatedthat they considered a significant increase in farm stay facilities (GasaDzongkhag) likely.Expansion of the sector will also lead to the establishment of tourism supportservices such as: Industrial laundries, tour operators, vehicle rental78

companies, service garages, food distribution; suppliers of constructionmaterial; furniture and kitchen suppliers; and others.Impact characterisation for the tourism sector:• Solid Waste: Disposal of building waste; Domestic waste and packaging;Organic waste and excess food disposal.• Waste Water: significant increase in wastewaters and sewage generatedby tourism facilities. On average internal water consumption per guestnight will range between 130‐300 litres (toilets flushing, kitchens,laundry, shower/bath, drinking water) External water use per guest night(landscape, external cleaning, swimming pools and spa’s, car washing)are likely to increase pollution loading of groundwater sources and onlyrequired increased treatment capacity if discharged to sewer lines.External water use volumes for international standard hotels will besimilar to and additive to internal use consumption 1 .• Water Pollution: Contamination of wells and ground source potablewater as a result of infiltration from inadequate or low capacity septictanks.• Air Pollution: Vehicle emissions and waste incineration andinappropriate waste disposal.• Land Transformation: Conversion of Government Reserve Forest orsettled land to accommodate tourist resorts, lodges and camps;Resettlement of resident populations could be envisaged.• Natural Resources: Extraction of building materials (aggregates, stoneand boulders, Cement, wood products); localised resource depletion;Landscape changes; impacts on the sustained provision of ecosystemservices.• Public Health: Increased Prevalence of HIV/AIDS in areas adjacent totourism facilities.3. Transport Sector:The Roads Master Plan foresees gradual expansion and improvement of theNational roads network to provide services and connectivity to allcommunities, cities and settlements in the National territory. Thisassessment considered the current roads network and forecastinfrastructure development over its 20‐year temporal framework. Processparticipants including representatives from the Ministry of Works andHuman Settlement – Department of Roads considered the current Planincluding the proposed road linking Lhamoizingka to Geserling, Daga andWangdue‐Punakha and recognised that the road should be reconsidered in1 Dakers, A; D. Lees; R. Cullen and G Meyer-Hubbert (2006): Impact of Tourism on waterand wastewater services in small towns. Tourism Research Recreation and Education Centre.Lincoln University – New Zealand.79

light of the demands of the preferred alternative. As such, processparticipants have suggested that a new alignment for a fast trunk roadlinking Lhamoizingka to Wangdue‐Punakha be identified at a safe distance onthe Eastern banks of the Punasangchu River and its future reservoirs.Environment and Socio‐economic impact characterisation: Roadsdevelopment will result in significant environmental and socio‐economicimpacts throughout the study area. These are detailed below and specific toeach infrastructure type foreseen in the Strategic Assessment.a. Trunk Roads: The prospective analysis carried out by processparticipants foresees a rapid trunk road connection from Lhamoizingkanorth towards a connection with the Wangdue‐Punakha highway atSunkosh Bridge. Impacts related to this road would be: Landtransformation; Limited loss of Government Reserve Forests along andadjacent to the alignment; generation and disposal of spoils due to thecutting and construction process; Waste generated by constructioncrews; Incidence of waste following commissioning of the road includinglitter increases; Increased incidence of wood cutting and wildlifedepletion in areas adjacent to or made accessible by the trunk road;Pollution of surface waters, tributaries and streams as a result of wasteoils and fuels disposal (roadside repairs); Incidental spills of chemical andtoxic wastes (accidents); Increased prevalence of HIV/AIDS in areasserviced by the infrastructure; Possibility of ribbon type development inareas adjacent to the infrastructure.b. Feeder Roads: Impacts generated by the construction and expansion ofthe National network of feeder roads in the area of influence are similarto those described above for trunk roads.c. Farm Roads: Impacts related to farm roads are again similar to thoseabove but limited primarily to the disposal of spoils generated duringconstruction and later during periodic maintenance. Ribbondevelopment in areas adjacent to farm roads will be unlikely given thatthe end purpose of these roads is to provide access to markets and basicservices (health, education) to distant settlements/communities notservices by higher‐grade infrastructure.4. Future Infrastructure Types/Options: The prospective developmentscenario constructed by process participants forecasts a number ofinfrastructure developments that could be realised within the temporalframework of the assessment. Impacts that could be expected fromthese are listed below:a. Road Tunnels: Rapid economic development of the Wangdue‐Punakha conurbation will require fast and efficient transport links toThimphu and Paro airport. Participants considered that the most80

appropriate solution would be to construct a road tunnel linkingThimphu valley to the Punasangchu River valley. The tunnel would beconstructed from a point east of Lobesa to a point west of Thimphu.Tunnelling distance would be between 10‐15 kms. A feasibilitydistance given technologies currently applied to the construction oftunnels in “run of the river” hydropower projects.Impacts expected from tunnel construction would be a significantvolume of spoils that would require innovative disposal. Localised airpollution from the concentration of vehicle emissions being ventedfrom the tunnel; limited land transformation and loss of Governmentforests in cleared areas at either extremity of the tunnel (parkingareas, safety/administration infrastructure, truck inspection andweigh stations, rest areas). The tunnel would be the preferred routingof most vehicles. As such there will be reduced impact to sensitiveareas adjacent to the present “over the top” road. The existing roadwould be maintained and used when the tunnel is closed formaintenance or for oversized vehicles or vehicles carrying dangerousor volatile cargos.b. Water based Transport: Construction of the Sunkosh 4000 andSunkosh Lift hydropower and reservoir projects will lead to thecreation of two large reservoirs extending from a point 14 kms northof the border with India to a point near the confluence of theDagachu River with the Punasangchu River. Together the tworeservoirs will result in navigable reservoirs extending 13 kms. And 52kms respectively (in a rough north‐south alignment).Process participants considered that water based transport should beconsidered as a future multimodal transport solution in the area ofinfluence. Constructed scenarios envisaged several transportopportunities:1. East‐West ferry Crossings: Several ferry crossing would beestablished between the eastern and western Banks of thereservoir. These would be barge type ferries capable of carrying anumber of cars and/or trucks. Terminals and settlements wouldbe established on either bank. Ferry crossing would enhance East‐West connectivity and transit times.Impacts would include but not be limited to: Solid wastegeneration from settlements and terminals; Waste water;construction spoils (road beds, loading ramps, construction of thesettlement and its infrastructure; natural resource depletion(wood cutting, limited habitat loss, impacts to biodiversity); Waterpollution (dumping of waste and refuse into the reservoir, oil and81

fuels spillage); Limited displacement of populations resident atselected crossing sites.2. North South scheduled services (passengers and goods): Impactswould be similar to those described above for ferry crossings. Thenumber of landing stations constructed on the reservoir wouldmultiply identified impacts.3. North‐South cruises (tourism); Cruise services on the reservoirwould operate differently and would not result in increasedincidence of waste and refuse disposal (collected and disposed onshore); there would be no waste water disposal from the vessels(equipped with holding tanks); oil and fuel spillage would also belimited with the existence of on‐board holding and disposalreservoirs. Impacts related to the construction ofloading/offloading facilities would still require management andmitigation. Likewise, disposal of wastes and spent oils wouldrequire special consideration.Water based transport, regardless of the type envisaged would requirecommon support facilities that would have to be constructed orestablished at suitable locations on the banks of the reservoirs. Theseinclude ship repair facilities, fuelling facilities and waste disposal andmanagement facilities.Boatyards can generate significant waste including fine particulates(metal, paint, anti‐fouling paint); waste oil and grease; oil contaminatedwater (bilge water); scrap of various types (metal, wood, electricalwiring; plastics; etc.); Waste generated by boatyard workers.Fuelling facilities can result in chronic spillage into reservoirs. Specificmitigation and management techniques will have to be developed (seeSection‐7 of this Report).c. Regional Airports: Development of the airport at Gelephu has beenannounced since the completion of the participant discussions. Thisairport will require an EIA that will identify all likely environmentalimpacts and measures for their mitigation.Process participants did identify an option to construct a regional airportat Lhamoizingka. This airport would complement transportinfrastructures and also service Phuntsholing via the new road viaManitar.Construction of an airport at Lhamoizingka would be inscribed in aStructural Plan for the development of Lhamoizingka including: Itssupport infrastructure; Special Economic Zone; Urban expansion areas;82

Recreational areas; Industrial Estates; etc. Impacts directly attributed toa future airport will include but not be limited to: Land take and landtransformation; Noise pollution; Air pollution due to aircraft emissions;Contamination of ground water supplies in the event of fuel spillage oraircraft wash down; Building waste and spoils; Solid waste and wastewater.d. Railways: Participants in both the present Strategic Assessment and theStrategic Assessment to consider the likely development consequencesof proposed Industrial Estates in Samtse Dzongkhag considered thatBhutan would be well‐served by a railway connecting Sibsoo (westernSamtse Dzongkhag) to Jampani (Eastern Trashigang Dzongkhag). Theproposed railway would be constructed parallel to the border with Indiaand would traverse on a least cost direct routing. The routing wouldrequire transit through the Phibsoo Wildlife Sanctuary, the Royal ManasNational Park and the Khaling Wildlife Sanctuary. Transit through theseNational conservation assets is possible if construction and operationfollow strict guidelines (which will need to be defined in consultationwith RSPN)An electrical railway could be an optimal transport solution for southernBhutan. It requires limited land take, is easily controlled and managedand can serve to move goods and passengers (including trucks onflatbeds) to strategic connections to fast north‐south trunk roads. Theproposed option draws on ample power generated by current and futurehydropower projects in Bhutan.Impacts related to a rail option would be primarily related to theconstruction phase and limited to land take, construction spoils andlimited deforestation of conservation assets. A railway would not pose athreat to wildlife as a result of speed restrictions within conservationareas. The railway would be single track with double track at intervals toallow safe passing of opposing trains. Construction will be self‐containedfrom bed and rail construction rolling stock. The construction trainwould be provided with track and ballast from behind (already laidtrack). Ballast would come from existing quarries and rails (100 metresections) pre‐assembled on sleepers and laid by the construction train.A rail option in Southern Bhutan becomes an interesting option as fuelcosts for road transport increase and are reflected in the overall price oftransported goods.5. Agriculture and Fisheries SectorThe preferred alternative will lead to expansion and diversification ofagricultural production in the area of influence. There will be a83

significant increase in commercial farming practices and expansion ofagro‐based industrial output.Aquaculture (fish farms) could be established on or adjacent to theSunkosh reservoirs.Environment and Socio‐economic impact characterisation:Depletion of Natural Resource Inventories: Conversion of land toagricultural use; Increased settlement of areas with agricultural potentialwith a concomitant increase in deforestation through clearing and forfuel wood supplies; Fragmentation of critical habitats and ecosystemsincreases.Deforestation of critical basin catchments: Increased sedimentation ofstreams and rivers as a result of upstream erosion; ecosystem servicesexpected from catchments are diminished; Potable water resources(during periods of drought) are reduced.Pollution of surface waters: Chemical pollution due to increased use offertilizers and pesticides; Contamination of near surface drinking watersupplies;Fisheries: Depletion of wild stocks of commercial species in thePunasangchu River and its tributaries; Conversion of land for the purposeof aquaculture; increased charcoal production for treatment (smoking) ofwild and farmed fish products.6. Industrial SectorEconomic development priorities, trans‐boundary agreements and sitespecificadvantages of the Lhamoizingka area lead to the establishmentof a Special Economic Zone supported by satellite Industrial Estates.Investors benefit from locally available raw materials and produce goodsfor both national and international markets. The focus is on lightmanufacturing/industries, assembly and agro‐based industries.Service Industries and distribution centres are established in theWangdue‐Punakha area servicing the northern focal area, Thimphu, Paroand the Eastern Dzongkhags.Environment and Socio‐economic impact characterisation:Solid Waste: Disposal of building waste; disposal of by‐products,packaging, etc.; contaminated organic waste from abattoirs and meatprocessing facilities.84

Waste Water: Disposal of high BOD effluents. Effluents with highchemical and heavy metal concentrations (Tanneries).Emissions: Gaseous and particulate emissions that can be unpleasant anddangerous to populations in adjacent areas.Depletion of Natural Resources: Increased woodcutting for charcoalproduction in adjacent areas; Resource fragmentation due toconstruction of the infrastructure and designated industrial areas;deforestation resulting from increased timber extraction.Cultural Erosion: Rural to urban migration; Cultural dilution Ruralcommunities fragmented as a result of migration.Increased prevalence of HIV/AIDS in industrial areas with a significantinflux of foreign workers could become apparent.7. Mining Sector (Mines and Quarries)Development of the area of influence resulting from the preferredalternative together with ample generated power and an effectivetransport infrastructure will open up the area to exploration and laterinvestment to supply raw materials to industry established in thesouthern focal area.Environment and Socio‐economic impact: Expansion of the miningsector (assuming the existence of mineral resources) could lead toincreased environmental pollution and depletion of critical naturalresources. It is expected that these would be offset by the rigidapplication of existing/strengthened laws. Expansion of the mining sectorin the area of influence could lead to a significant contribution to the GDPand employment.Environment and Socio‐economic impact characterisation:Degradation of natural resource inventories: Damage to sensitive areasresulting from exploration; Increased hunting and poaching;Displacement of wildlife stocks away from natural habitats if these arebeing explored/exploited.Solid waste and Spoils disposal: Domestic, industrial and overburdencould be generated in significant quantities and will need proper andagreed disposal methods.Increased pollution of surface waters and air (if mining is operational):The type of environmental impact expected would be dependent on thetype of mining undertaken.85

Depletion and fragmentation of forest resources: Mining and thedevelopment of infrastructure to support mining will contributesignificantly to depletion and fragmentation of forest resources in thearea of influenceCultural Erosion: Cultural dilution; Immigration and migration; Ruralcommunities fragmented as a result of migration.8. Energy SectorThe Assessment recognises that the energy sector is the driver of changeand development of Basin‐2. The Assessment does not consider the directand construction based impacts of hydropower development on thePunasangchu River given that these are covered by Environmental ImpactAssessments specific to each hydropower project.For the purpose of this assessment we consider the wider developmentimpacts directly related to the hydropower projects on the area ofinfluence and over the temporal framework of the assessment.Environment and Socio‐economic impact characterisation:Impacts will be attributed to increasing population and settlement in thearea of influence (the economic drawing factor of the projects). Impactswill include but not be limited to: Expanding urban areas; investment inservice based industries to support the hydropower sector (Garages andrepair facilities; Die‐casting and small parts production; cleaning andlaundry services; catering services; Financial Services; vehicle sales andrentals; Recreational Services; etc.); increased import and consumption ofpackaged domestic goods; increasing demand for water; increasingpressure on existing services and utilities; Land take for hydro relatedsettlements, transmission lines and electricity distribution networks;depletion of natural resources; increased incidence of water, air and soilpollution; increased solid waste and waste water generation; culturaldilution and erosion in both urban and rural areas; increased andunstoppable rural to urban migration.9. Health Sector and Public HealthThe preferred alternative foresees the construction of new hospitals,clinics and dispensaries. Likewise it foresees the expansion of existingfacilities to cater for increasing population in the interim. This expansionwill be associated to impacts that will need to be mitigated and managed.Predicted impacts are detailed below.Environment and Socio‐economic impact characterisation:86

Construction of new health facilities or expansion of existing facilities willrequire land and access to infrastructure (electricity, sewerage, water andcommunication); During construction there will be building spoils andwastes that will need to be processed. Following completion, impacts willbe primarily related to the treatment of solid waste, wastewater andtoxic/hazardous waste. Of these the most difficult to handle will be thelatter which will require either on‐site incineration or safe transport to adesignated incineration facility. Transport of hazardous waste could leadto off‐site pollution incidents in the event of accidents or spillage.Expected impacts in the Health Sector can be summarised as follows:• Contaminated hospital waste requiring specific disposal methods:Contaminated waste, wastewater and sharps requiring specialdisposal criteria.• Increased incidence of communicable diseases as population densityincreases in areas serviced by the infrastructure.• Increased Prevalence of HIV/AIDS in areas serviced by healthinfrastructures.10. Finance SectorBarter system and cash trade is still in existence in the area of influence.As the area develops and roads infrastructures become available to allcommunities there will be expansion of the financial services sectorconcomitant with increasing household incomes and wealth.Environment and Socio‐economic impact characterisation:Impacts directly related to improved access to funds and to increasinghousehold incomes are likely to be:• Degradation and Fragmentation of natural resource inventories:increasing demand for forest and non‐forest resources linked toenhanced household incomes and increasing population density.• Increased levels of Waste Generated: a direct result of increasinghousehold incomes.11. Natural ResourcesAs population in the area of influence increases in line with rapid andfocused economic development, it is likely that there will be an initialsurge in the exploitation of natural resources (licensed and un‐licensed).The surge will be brought under control as National Laws and regulationsare but eventually laws will be enforced to protect natural resources. Therisk of overexploitation will remain and its control will require theconcerted efforts of all concerned administrations.87

Environment and Socio‐economic impact characterisation:Infrastructure development in the area of influence facilitates naturalresource management (the area is now easily accessible to managers andinspectors). The infrastructure also makes the resources easily available topotential users and, as such is likely to lead to increased demand, use andeventual localised depletion. Rural to urban migration will lead tolocalised depletion in areas adjacent to urban areas but, resources inpopulation depleted rural areas will be auto‐protected as a direct result ofdecreased demand.88

7. MANAGEMENT AND MITIGATION MEASURES7.1 PROPOSED MANAGEMENT AND MITIGATION MEASURES(NECES<strong>SA</strong>RY TO ACHIEVE SUB‐OBJECTIVES AND MEETNATIONAL STANDARDS)Environmental and socio‐economic impacts expected from the preferreddevelopment option and described in Section‐6 above were grouped intoimpact categories. Management measures necessary to mitigate theseimpacts are detailed in the table below.The recommended management and mitigation measures described beloware necessary to offset predicted impacts. As such, each identifiedmanagement and mitigation measure should be considered a pre‐conditionto licensing and must be embedded systematically into Dzongkhag andNational Development Plans (5‐Year Plans, Annual Plans, Spatial Plans,Structural Plans, etc.)PREDICTED IMPACTSIncreased Production of SolidWasteMITIGATION AND MANAGEMENTMEASURES• The preferred disposal technique shallbe in planned sanitary landfills;• Where land for sanitary landfills are notsuitable then alternative methods suchas: Baling; Incineration or new GasPlasma Incineration techniques can beconsidered.From the Tourism Sector:• Tourism operators and hotel owners arerequired to apply waste reductionpolicies;• Tourism operators are made responsiblefor separation and treatment of theirwastes.• Compositing of organic waste.• Disposal to designated waste disposalfacilities in each Dzongkhag orMunicipality;• Inspections to verify waste managementschemes are carried out periodically ateach property/operation.Urban and Industrial Waste:• State of the art sanitary landfills areconstructed in suitable areas adjacent orproximal to all urban areas;89

• Treatment and disposal according towaste characterisation in designatedDzongkhag or Municipal sanitarylandfills.• Industries are made responsible for pretreatmentof waste generated withintheir facilities;• Industries settling in the area should berequired to introduce clean productionmethods to minimise waste.• Waste recycling, where possible will bemade mandatory;• Periodic site and process inspections aremandatory and carried out by adesignated authority.Dzongkhags:• Dzongkhags should identify suitablelocations for sanitary landfill sites andcomposting sites on a high priority basis.• Sanitary landfills should be planned,financed and constructed.• Operation and maintenance should becontracted out to experienced operators.• Waste collection and treatment feesshould be introduced to encouragewaste minimisation at all levels.Geogs:• Solid waste management should alsobe introduced systematically;• Suitable long‐term solutions must beidentified for smaller settlements andrural areas;• Collection and consolidation schemescould be considered. Collected refusewould then be transferred periodicallyto designated landfill sites;• Waste from smaller settlements couldalso be collected and baledperiodically. Bales can be used to recontourvalleys to increase agriculturalpotential.Profit from Waste Initiatives:• National and Dzongkhag Authoritiesshould encourage and support theestablishment of waste recycling SME’s.• Residues from Gas Plasma Incineration90

Toxic and Hazardous WasteIncreased WastewaterVolume Generatedcan be recycled as tarmac aggregates (aglassy substance is all that remainsfrom tons of waste). No toxic emissions.From the Health Sector:• Disposal of all toxic and hazardouswastes from hospitals, clinics anddispensaries shall be according to agreedand licensed procedures.• The NEC will issue licenses and beresponsible for periodic monitoring.• Disposal shall not be permitted insanitary landfill sites or any othercommon licensed disposal site;• Illegal disposal shall be tracked andsanctioned severely;• High temperature incineration shall bethe preferred disposal technique.From the Industrial Sector:• Industries shall be responsible for pretreatmentof their hazardous waste orthe proper and legal disposal of thematerials. Disposal shall be according tobest international practice;• All toxic and hazardous waste resultingfrom any industrial or commercialprocess shall be signalled prior tolicensing,• Standing control regulations shall applyand shall be enforced by the relevantauthority;• The NECS shall verify compliance andenforce regulations (which may includesuspension of a license in the event ofrepeat irregularities)Increasing population in the area ofinfluence, increasing investment in tourism,light industry, and service industriesincreases demand on water with aconcomitant increase in generatedwastewater in both the northern andsouthern focal areas.Urban and Industrial Waste:• Suitable locations for tertiary wastewater treatment facilities are identifiedin each urban area and in the Wangdue‐Punakha conurbation;91

• When possible, wastewater treatmentfacilities shall be located away fromresidential and tourism areas.• Treatment plants shall be located downslopeto minimise the need for pumping(added cost);• All urban areas shall be connected towaste water treatment facilities throughdedicated sewerage networks;• Soak‐away pits and open latrines will bediscontinued and replaced by septictanks in areas where connection totreatment facilities is difficult.• Industries should be required to pretreattheir effluents prior to discharge toofficial treatment facilities. Effluentsmust meet national standards (detailedin the Water Act of 2010) prior todischarge.• Discharges of untreated wastewater andsewage into receiving waters shall beprohibited.From the Tourism Sector:• Lodges, Camps and Resorts located inareas distant to Municipal/Districtwastewater treatment facilities will berequired to have on‐site treatment tonational standards.• Mini‐treatment plants shall be thepreferred treatment method;• Wastewater treatment shall be specifiedand agreed prior to licensing. The NECSshall be responsible for monitoring andinspection following commissioning ofeach self contained treatment plant;• Discharges of untreated wastewater andsewage into receiving waters shall beprohibited. Discharges will be trackedand the responsible party will besanctioned heavily (fines, penaltiesclean‐up and restoration costs);• All wastewater treatment facilities(regardless of size) shall be subject toregular inspection by a designatedauthority.Dzongkhags:92

Increased Volume ofConstruction WasteIncreased Volume of Spoils• Dzongkhags should identify suitablelocations for wastewater treatmentfacilities on a high priority basis.• Land for the facilities should be securedon a high priority basis;• Wastewater treatment facilities shouldbe planned, financed and constructed.• Operation and maintenance should becontracted out to experienced operators.• Water treatment and sanitation feesshould be introduced to offset operatingcosts.• All discharges of untreated effluents toreceiving waters should be suppressedwithin an agreed period of time.Economic growth in the area of influencewill result in increased physicaldevelopment (construction, buildingrehabilitation, infrastructure development).There will be significant volumes of buildingwastes generated that will need eitherrecycling or adequate disposal.Districts:• Areas designated to receive buildingwastes should be identified on a highpriority basis;• Building waste should be crushed andrecycled as building aggregates if suitablefor that purpose;• Fiscal incentives should be provided towaste recycling enterprises;• Crushed building waste should be usedfor construction of roadbeds to offsetcost and reduce damage due to theproliferation of aggregate quarries.The principal source of spoils requiringhandling and proper disposal will be: Roadworks; Tunnels; Hydropower projects;Excavations; Site preparation works; andothers.Treatment and disposal:• Disposal in valleys, on riverbanks andother natural areas is not feasible. Spoildisposal from the Punasagchu‐1Hydropower project is already a majorissue with inadequate disposal altering93

LandConversion/Transformationriverbeds, increasing downstreamsiltation and destabilising banks.Disposal in lateral valleys leads tobiodiversity loss, alteration and blockageof smaller watercourses and damage tocritical forest resources.• Efforts should be crushed, sorted and reusedas building materials andaggregates.• Spoils can generate a profitableaggregates business.• Spoils re‐use policies can significantlyreduce damage to forests and naturalresource depletion likely to result fromincreased number of quarries andaggregate businesses.Current land use in the area of influencewill be significantly altered as demand forland to accommodate urban expansion;infrastructure development, industrialdevelopment and others increase over thetemporal framework of the StrategicAssessment.Management and Mitigation:• The National Land Commission, togetherwith Dzongkhag administrations shouldcarry out or update their land and landuse inventories;• Land management priorities should bedefined within the area of influence andin particular in the northern andsouthern focal areas;• Currently ongoing cadastral surveys todevelop a National Digital Cadastreshould be carried out in the area ofinfluence and its focal areas on a prioritybasis;• Land for specific development types(tourism, residential, industry,recreation, agriculture, forest,conservation, etc.) should be identifiedand reserved for that purpose only.Developments incompatible with thedesignated use must be prohibited as ameans of stimulating and protectinginvestment and quality of life;• GLOF risk areas identified by the94

Pollution of Surface Waterand Potable Water SuppliesDepartment of Geology and Mines mustby delineated and kept free of allstructural development. Identified riskareas can be maintained in their currentuse or converted to green recreationalareas (parks, cycle paths, picnic areas,trails, etc) when located within an urbanor urban expansion area.• Existing Structural Plans will need to berevised in light of the findings andrecommendations of this Assessment;• A Spatial Development Plan for the areaof influence and the focal areas shouldbe prepared. The Spatial Plan shouldincorporate Structural Plans,Infrastructure Master Plans and otherrelevant Sector specific Plans.• The resultant Plan will identify alldesignated development zones anddescribe (in detail) the type of activitypermitted and the conditions requiredfor establishment of each developmenttype.• Legislation should be strengthened (asneeded) to regulate unplannedsettlements and unlicensed landconversion/transformation.• A register of industries, effluents(sources and types) should beestablished. The register should be usedto track back to polluters shouldcontamination be detected. The Registerwill be cross referenced to the digitalcadastre;• A register of fertilizers and pesticidesshould be established with reference touse relative to each plot registered onthe digital cadastre;• Regulate use of pesticides and fertilizers;• The quality of surface and groundwatersupplies should be monitored on aregular basis.• National enforcement detailed in theWater Act and standing NationalEnvironmental Regulations should befollowed and enforced;95

• The NECS should support Dzongkhag andGeog Authorities through capacitydevelopment, technical expertise andsystematic monitoring.Disposal of Waste Oil andFuelsAccidental Spills (fuels, oils,chemicals and other toxicmaterials)National Level:• Directives should be issued to designateand plan areas designated for theestablishment of garages and vehicleservice centres.Dzongkhags:• Criteria for the establishment of vehicleservice facilities should be prepared(relative to National Directives). Thecriteria will include regulations for theproper disposal of waste oils and fuels;• Inspectors will ensure that garage andservice centres respect establishedoperating standards.• A system of fines should be introducedand applied;• Dzongkhag authorities will organisecollection of waste oils and fuels on aregular basis. Arrangements should bemade to consolidate collections andtransfer them to reprocessing facilities.Districts should be paid for each deliverymade to the reprocessing facility. Thecollection and sale of waste oils and fuelsto a reprocessing facility will be auditedand the results shall be made public.• The waste oil and fuels collection systemcan be contracted out to suitablyqualified enterprises;• Inspectors will patrol the roadinfrastructure network regularly toensure that oils are not dumped on theroadside. Appropriate fines should beconsidered and applied as needed.• Accidental spills (due to road accidentsand other unforeseen incidents) areunavoidable. Clean up and restorationunits should be established andmobilised to respond in the event ofaccidents. (In most countries the RoadsDepartment supported by the96

Depletion of NaturalResource InventoriesDegradation andFragmentation of ForestResourcesEmergency Services have thisresponsibility).• Accidental spills shall always be reportedto the NECS. The NECS shall monitor thesite for possible contamination ofsurface and ground waters.• An updated map and inventory ofnatural resources in the Area ofInfluence must be prepared (on apriority basis) to enable effectivemonitoring of natural resourcedepletion.• Capacity development of theresponsible authority will be required.Capacity refers to numbers of availablepersonnel and their technical expertise.• Regular monitoring of the resourcebase will need to be carried out.Contingency plans will be prepared andcorrective measures shall be triggeredby the results of monitoring.• Introduction of concerted publicawareness campaigns to reducedemand on natural resources.• Introduction of modern and efficientwood burning stoves to reduce demandfor fuel wood. Introduction ofpelletizing processes using waste woodas part of a wood stove conversion andmodernisation process.• Reinforcement of community basednatural resource management schemes(Community forests, delegatedresource management, communityspecies protection schemes, etc.).• Improved cross border wildlifemonitoring in the southern andnorthern areas of the geographic area.• Coupling resource managementobjectives to expansion of the tourismsector and supported by benefit sharingschemes and direct employment.• Conservation forest areas should bemapped and legally designated.• The routing/location of proposedinfrastructures (roads, railways,97

Depletion of BiodiversityInventories and Animal‐Human Conflictsairports, ports, terminals, etc) shouldbe delineated and conditions set forestablishment of their rights of way.• Timber cutting for the rights of wayshould be licensed to a commercialoperator and the revenue used formanagement of forest reserves in thearea of influence.• Fragmentation should be mitigatedthrough designation of conservationcorridors.• The Forest Department together withforest officers at the Dzongkhag andGeog levels must continue todesignate areas where licensedcutting for charcoal production wouldbe permitted.• The capacity of the ForestDepartment to monitor and manageforest resources should be enhancedthrough recruitment and training.• Awareness campaigns targeting forestconservation should be designed andimplemented.• Plantation forests for charcoalproduction and local use should beestablished in collaboration with localresident communities.Increased human activities in the area ofinfluence will lead to a reduction in baselinebiodiversity inventories. Management andcontrol measures should include but not berestricted to:• Planned human settlement in areasdistant from known biodiversity hotspotsor areas of concentration;• Habitat and ecosystem integrityshould be considered in alldevelopment planning;• Urban expansion areas are planned tomaintain habitat integrity andprevent fragmentation;• Speed restrictions and speed controldevices applied to sections of theinfrastructure known to be in theproximity of or bisecting known98

migration routes and/or knownbiodiversity concentration areas;• Game fencing in areas that areparticularly prone to animal‐humanconflicts (proximity to the PhibsooWildlife Sanctuary and the RoyalManas National Park.Economic growth, migration from rural anddistant areas and the influx of migrants tourban centres are likely to lead to socialconflict, and a gradual erosion of social andcultural values specific to Bhutan.Management will require the concertedeffort of National and Sub‐NationalAuthorities and the visible presence of theMonarchy (as protector of cultural andtraditional values).Erosion of Social and CulturalHeritageMigration and UnplannedSettlementThe magnitude of the problem should bemonitored at the Geog level and followedby social services (schools, clinics,dispensaries) in rural areas.A “State of Bhutan’s Rural Areas andCultural Heritage” should be prepared priorto the preparation of each 5‐YearDevelopment Plan. Recommendedcorrective measures should then beintroduced to the National DevelopmentPlan.Management measures to avoid theestablishment of unplanned settlements inurban areas or ribbon type developments inareas adjacent to the planned infrastructurerequires:• Identification and cadastral planningof urban expansion areas in allexisting urban centres of theconcerned Districts.• Identification of sites suitable for theestablishment of settlements in keyareas along the routing of theproposed infrastructure.• Cadastral planning of identified sites.• Definition of clear mechanism for theallocation of plots to migrants.99

Increase in HIV/AIDSPrevalenceMitigation measures targeting an expectedincrease in HIV/AIDS prevalence rates as aconsequence of increased mobility of thepopulation, improved roads infrastructureand increased presence of foreignconstruction workers can include: to roadrehabilitation can include:• HIV/AIDS education and preventionmessages (radio, billboards) along theroute, and prevention activitiesat truck stops (drama, educationsessions, etc).• Health posts at truck stopsor outreach health services from thelocal health centers at truck stops, forthe provision of condoms, counselingand testing services, STItreatment, and other basic healthservices.• Free Condom distribution at truckstops and at hotels7.2 PRIORITISED DEVELOPMENT ACTIONS IN THE AREA OFINFLUENCEProcess participants considered the likely development outcomes resultingfrom their preferred development alternative and structured these in alogical sequence in their prospective scenario presented in Section‐5.5above. The sequence of activities required to plan, execute and monitor eachidentified development action will be similar in each case and will bepreceded by a generic set of actions, which should be carried out between2010 and 2015.1. Revision of existing Structural Plans to introduce developmentpriorities identified through this Assessment.2. Elaboration of a detailed Spatial Development Plan for the Area ofInfluence and the forecast focal development areas.3. Identification of GLOF risk areas and systematic developmentprohibition in all current and future development plans.4. Promulgation of a Law prohibiting construction and physicaldevelopment in GLOF risk areas.100

5. Preparation of a digital cadastre for the area of influence.6. Agreement on development macro‐zones in the areas of influencewhere only certain types of compatible development will bepermitted.7. Delineation of identified macro‐zones on the digital cadastre.8. Elaboration of information folders describing the developmentconditionality that must be met (environmental, physical,structural and social) prior to approval to proceed and licensing.9. Prepare and make available detailed natural resource andbiodiversity inventories for the area of influence and the focalareas.10. Determine the current state of the environment in the area ofinfluence to include: water quality of surface and ground water;air quality and current emission levels; potential risk areas(landslides, GLOF, flood risk, etc.); current noise pollution levels;present use of fertilizers and pesticides; current volumes of wasteand wastewater generated; location and type of wastemanagement in the area of influence.11. Define limits of change for environmental parameters that cannotbe exceeded. The limits shall be structured on internationalstandards adjusted to the Bhutanese context (example: Euro‐4,Euro‐5 emission standards for vehicles).12. Prepare a specific development Plan and Strategy for theestablishment of a Special Economic Zone in Lhamoizingka,complete with urban expansion areas and the location of criticalinfrastructure and services (roads, waste management, sewerage,power transmission and distribution, residential areas, greenareas, recreation areas, rail links and terminals to India, hospitals,schools, etc.)13. Commission a study to analyse (in detail) the option and feasibilityof constructing a railway from Sibsoo to Eastern Trashigang. TheRailway, as described in this Report would follow an alignmentproximal to the border with India and traverse both the Phibsooand Manas conservation areas.14. Convene a public hearing to present the findings of the Railwaystudy (11) and agree on the future of the proposal.101

15. Identify suitable locations for sanitary landfills and wastewatertreatment facilities to service the future Wangdue‐Punakhaconurbation. Reserve the location and issue directives to assurethey are not allocated to other purposes.16. Revise the existing Roads Development Master Plan in line withthe findings and recommendation of this Report. The Plan shouldbe revised to include the construction of a fast trunk road linkingLhamoizingka to Wangdue‐Punakha following the shortest andmost appropriate alignment adjacent to the future PunasangchuRiver reservoirs. The Alignment should allow for development oftourism facilities and services (ferry boat, water transport,terminals) on suitable land between the highest high water markon the shore and the road.17. Develop a time‐based Strategic Plan for infrastructureimprovement and upgrading in the area of influence.18. Commission a detailed study and feasibility study to determinethe most appropriate alignment for a road tunnel linkingWangdue‐Punakha to Thimphu. The analysis must include apreliminary social and environmental impact profile of thepropose works.19. Identify and reserve an area suitable for construction of a regionalairport in Lhamoizingka.20. Immediately identify alternatives to spoils dumping on riverbanks,valleys or other natural area. Ensure that future hydropower,road, infrastructure, tunnelling, urban expansion activities are notpermitted to dump spoils. The preferred spoils treatment optionmust be some form of re‐use and recycle process with in‐builtrevenue generation opportunities.21. Initiate marketing and promotion campaigns to attractinvestment to the focal areas following completion of thePlanning processes and the preparation of conditionalityinformation/instruction folders.22. Agree on Institutional Arrangements for the technical review andapproval of license applications for all development types in thearea of influence.23. Agree on the institutional Arrangements for subsequentperformance monitoring, state of the environment monitoringand Dzongkhag Performance Audits.102

Specific development actions, identified through the above preparatoryactivities, should be introduced into the 11 th Five Year Plan (2014‐2019),subsequent Five‐Year Development Plans and Annual Plans and budgetsderived from these Plans. Introduced actions will be fully mainstreamedthereby reducing their environmental and social impact, enhancing theirdevelopmental benefits and reducing downstream corrective andrestoration costs.103

8. INDICATORS AND MONITORINGThe Royal Government of Bhutan gauges its development through a NationalIndicator set structured on International sustainable development indicatorsets defined by international development targets such as the MillenniumDevelopment Goals. The Gross National Happiness Commission is currentlyworking on a national set of indicators to measure progress towards its GNHgoals and objectives. To these the GNH will add a set of performanceindicators to measure the level of achievement, efficiency and continuedpertinence of its development programmes detailed in NationalDevelopment Plans and Annual Plans derived from these.During the course of this Strategic Assessment it was found that there wasconsiderable confusion regarding indicators among Process Participants. Assuch, it was proposed (and unanimously accepted) that a different but linkedapproach be adopted to measure progress in the execution of Plan activitiesat the Dzongkhag and Geog levels of government. The proposed approach isbased on the principles of “Benchmarking” a tool used effectively in thebusiness and industrial sectors and increasingly used to measure progresstowards objectives in a variety of different settings (including spatial andsocio‐economic development).8.1 BENCHMARKINGThe Oxford Dictionary of Human Resource Management 2benchmarking as:describes“The technique of comparing organizations in order to identify 'best practice'.Managers might benchmark their organization in order to assess how it isperforming, to identify areas for improvement, and to look for new ideas. Thepurpose is to identify best practice and to transfer all or part of this to one'sown organization. Invariably the transfer process involves adapting the ideasand techniques to industry‐specific or organizational‐specific circumstances.In theory, any aspects of the organization's operation can be benchmarked,including human resource policies and practices (training methods, equalopportunities policies, remuneration packages, etc.), providing they can bemeasured in a consistent manner across all organizations being compared.”“Benchmarking can be applied to many different areas and at many differentlevels, ranging from the manufacturing industry to public serviceadministration, at individual department or company level, as well assectoral or policy level. Benchmarking has already been successfully2 A Dictionary of Human Resource Management (2008): Edited by Edmund Heery andMike Noon. Second Edition. Oxford University Press. ISBN 0‐19‐829618‐5104

implemented as a tool to improve performance in the private sector and,more recently, in the public sector by government administrations and otherpublic institutions”.The principal steps involved in Benchmarking are:1. The ability to self‐assess through a clear understanding of anadministrations processes and performance in minute detail;2. To analyse implementation, execution and processes relative toagreed development objectives, sub‐objectives and targets. Toanalyse an Administrations performance relative to others(Dzongkhag to Dzongkhag or Sector to Sector) successful processesand performance;3. To compare measured performance against those of others whichmight have been analysed. To compare measured performanceagainst pre‐agreed targets (water quality will not exceed fixed values;health services will be delivered to x% of the population; etc.)4. To identify and implement changes to assure that targets are met orperformance deficiencies corrected.Figure‐x: Benchmarking would permit National and Sub‐nationaladministrations to set targets according to their Annual or Five‐YearDevelopment Plans. The Benchmarks could be specific to planned activities(kilometres of road constructed; number of hospitals constructed ormodernised; sector specific Developments; Employment; Education; or anyactivity specified in the Plan or introduced as a Benchmark).105

Since each activity has been mainstreamed to mitigate and manage anypredicted negative environmental, socio‐economic or GNH impact, then abenchmark audit should show that there has not been any deterioration incondition as measured at the “zero‐state” (the baseline or reference level forany given parameter).If during a benchmark performance audit, it is found that there has beendeterioration of any reference condition, then it is obligatory to track thesource (reason) and introduce corrective measures.As noted in Figure‐x above, benchmarks cannot be separated from agreedNational Indicators sets. Benchmarking is an opportunity to introducemeasurement systems that are transparent and subject to public scrutiny tocreate an atmosphere conducive to continuous improvement.8.2 DZONGKHAG AUDITSThe Concept of Dzongkhag Audits was presented and discussed onconclusion of the second <strong>SA</strong> process workshop. The purpose of an auditprocess was detailed and generally accepted by process participants as aneffective means of assessing performance relative to benchmarks and targetsdefined by each Dzongkhag and Geog.Audits would be carried out by multi‐sector teams representing differentadministrations. Teams must include a representative from the NationalEnvironment Commission Secretariat and the National Land Commission.Representatives from Sector Ministries or Administrations would be selectedfrom a roster of certified auditors.Audit results will be discussed with Dzongkhag and Geog officials in a publicsession in which local communities are encouraged to participate. Resultswill: Report performance relative to targets; Identify weaknesses; Identify allcases where targets have deteriorated relative to their reference values andpropose remedial actions.Audit results will be submitted to the GNHC as part of National performancemonitoring procedures relative to Annual and Five‐Year Development Plans.The GNHC will then confirm receipt of the Audit Report, confirm therecommendations of the Auditors and inform the concerned Dzongkhagaccordingly.Dzongkhag Audit procedures should be agreed b all concerned parties. TheAudit process should be tested and refined prior to its systematic application(to be agreed by Dzongkhags in a joint statement).106

9. RECOMMENDATIONSOn conclusion of the Strategic Assessment Process, participants shaped thefollowing recommendations to the Joint Commissions based on theircollective experience gained from the Process:1. Stakeholders recommend that all future development planning oranalysis of the development consequences of complex investmentprojects should be subject to Strategic Assessments to ensure thatthese deliver optimal development outcomes with minimalenvironmental, and social impacts.2. Stakeholders recommend that Strategic Assessment Processes bedesigned and implemented to ensure that all Dzongkhags areprovided with the Technical skills to apply the Process systematicallyto their development planning and to inform their decision‐makingprocesses.Opportunities to expose Eastern Dzongkhags to the <strong>SA</strong> Process couldbe: Proposed hydropower development on Basin‐3 and thedevelopment of an International airport and Industrial Estate in theGelephu region3. Furthermore, Stakeholders recommend that the 11 th Five‐Year Planbe elaborated on the basis of systematic Strategic Assessmentscarried out at Sub‐National levels to ensure that each constituentelement of that Plan is consistent and coherent to NationalDevelopment objectives, contributes to local development objectives,is fully mainstreamed to mitigate against predicted point source orcumulative impacts.4. Stakeholders agree that the principal National Institutional driver forensuring a systematic application of Strategic Assessments (as amainstreaming instrument of choice) should be the Gross NationalHappiness Commission. Stakeholders encourage the Commission todraw on experience gained by participants and, in particular theNational Environment Commission Secretariat to facilitatedissemination of the Process to Sub‐National Administrations, LineMinistries and other concerned parties.5. Stakeholders recommend that the Gross National HappinessCommission, together with the National Environment CommissionSecretariat issue a directive and prepare an <strong>SA</strong> Process methodologyto enable and monitor the systematic application of the Process, or avariant of it, to all complex development projects.107

Complex development projects shall include but not be limited to:Transport infrastructure; Strategic infrastructure; HydropowerDevelopment; Urban Expansion; Industrial Developments; NationalParks and Conservation Areas; Mines and mineral extraction areasand others.6. Stakeholder participants strongly recommend that the RoadsDepartment consider designing a new Highway to link Lhamoizingka(Kalikhola) to the Sunkosh Bridge junction on the Eastern bank of thePunasangchu River. The Recommendation is based on the outcome ofthe Process and the need for a fast North‐South Trunk Road link toWangdue‐Phodrang, Punakha, Thimphu and the Eastern Dzongkhags.7. Stakeholders recommend that the Tourism Board of Bhutan initiate asurvey and product development initiative to identify and promotetourism opportunities in the vicinity of the Punasangchu River and inparticular in areas adjacent to the highway recommended as item‐5above.Through the process Stakeholders have identified a significant futuretourism resource adjacent to the reservoirs established by theSunkosh Hydropower Projects, the Phibsoo Wildlife Sanctuary andother natural assets in the region.8. Stakeholders strongly recommend that all identified GLOF risk areason the Punasangchu River Basin be categorised as development andinvestment exclusion areas. Furthermore, Stakeholders recommendthat risk areas be designated as “Green Recreation Areas” anddeveloped for that purpose. Development could include: Park‐land;Footpaths; Bicycle paths; Nature Trails; Water recreation areas;Planned picnic sites with fire pits; etc.108

10. NEXT STEPSThe Strategic Assessment Process has reached an advanced state ofcompletion. The next stages are critical to its successful outcome andvalidation of its results and recommendations. The steps necessary tocomplete the process are detailed below:1. Circulate and adjust this draft Report:The Draft <strong>SA</strong> report is completed and circulated within the NationalEnvironment Commission Secretariat, the Gross National HappinessCommission and the National Land Commission for review, comment andadjustment relative to received comments.2. Deliver the adjusted <strong>SA</strong> Draft Report to NECS:The Revised and adjusted Draft <strong>SA</strong> Report is delivered to the NECS, theGNHC, the NLC and the Liaison Office Denmark (LOD).3. Prepare and National Consultation Workshop.NECS Officers together with partners in GNHC and NLC prepare a NationalConsultation Workshop to be held during the month of March 2010. Thepurpose of the Consultation will be to present findings andrecommendations to a broad and representative platform (Line Ministries,Stakeholder Administrations, Dzongkhag representatives, Private SectorInterests, NGO’s and Associations and other interested parties).The National Consultation workshop is an event where Process outcomesand recommendations are discussed, detailed and defended. Participantcomments are received, recorded and introduced to the Draft Report asrequired.4. Adjust the Draft Report following National ConsultationWorkshop and circulate to participants to ensure that itcontinues to represent their consensual choice.The National Environment Commission Secretariat supported by theirProcess Consultant prepares the Final Draft Report and circulates to theReport to Process participants to ensure that the Final Version stillrepresents their views and consensual choice.Once validated by Process participants, the <strong>SA</strong> Report (Final Draft) issubmitted to members of the NEC, GNHC, NLC Commissions in preparation109

of a joint Commission meeting to discuss, validate and endorse the Report,its outcomes and its recommendations.5. Prepare a joint GNHC, NLC, NEC meeting to present thedocument and process for endorsement:The NECS prepares and joint NEC prepares a joint NEC, GNHC, NLC meetingand presents the <strong>SA</strong> Report (Final Draft) to the members.6. Final Adjustments of the Draft <strong>SA</strong> Report to prepare the FinalReport:The Final <strong>SA</strong> Report is prepared following introduction of comments frommembers of the Joint Commissions.The Final Report is presented to the NECS representing the Chairman of theJoint Commissions. The NECS confirms that recommended adjustments havebeen introduced to the Report and issues a Note recommendingEndorsement.7. Prepare a Statement of Endorsement (to be approved by theChairperson presiding over the joint meeting):A “Formal Statement of Endorsement” is prepared and signed byrepresentatives of the Chairman of the NEC, the GNHC, NLC and submittedto the proper Authority for action.8. Publish the final Endorsed Report:The Report detailing the outcome and recommendations of the StrategicAssessment Report of development expected from hydropowerdevelopment in Basin‐2 (The Punasangchu River Basin) is published andmade available to: National and Sub‐National planning and developmentAuthorities; Line Ministries; NGO’s and Associations; and the General Public.The Report should then contribute to inform Development Planning andpermit the introduction of GNH mainstreamed priority actions to thosePlans.9. Prepare a Process Manual describing the <strong>SA</strong> processdeveloped for the Royal Government of Bhutan:A tailored and operational Strategic Assessment Process Manual to be usedfor subsequent Strategic Assessment Processes is drafted and introduced toLocal Government Planning Guidance.110

11. REFERENCESRoyal Government of Bhutan: National Environment CommissionSecretariat, 2002. Regulation for Environmental Clearance ofProjects and Regulation on Strategic Environment Assessment.Royal Government of Bhutan: Ministry of Agriculture, 2008.Biodiversity Action Plan.Royal Government of Bhutan: National Environment Commission,1998. The Middle Path: National Environment Strategy forBhutan.Royal Government of Bhutan: National Statistics Bureau, 2008.Infrastructure Mapping of Bhutan.Royal Government of Bhutan: National Environment CommissionSecretariat, 2009. Waste Prevention and Management Act ofBhutan..Royal Government of Bhutan: National Environment CommissionSecretariat, Bhutan Water Vision 2025 and Bhutan Water Policy.Royal Government of Bhutan: National Environment Commission‐UNDP‐GEF. Bhutan National Adaptation Programme of Action.Royal Government of Bhutan: National Environment CommissionSecretariat. Bhutan Environment Outlook 2008.Royal Government of Bhutan: Planning Commission. Ninth Plan:Main Document. 2002‐2007Royal Government of Bhutan: Gross National HappinessCommission. Tenth Five‐Year Plan: 2008‐2013. Volumes 1‐2.Royal Government of Bhutan: Gross National HappinessCommission (2009). Interim Guidelines for MainstreamingEnvironment in Policies and Programmes. 26pp.111

Royal Government of Bhutan: Gross national HappinessCommission Thimphu Dzongkhag Tenth Plan (2008‐2013).Royal Government of Bhutan: Gross national HappinessCommission Wangdue‐Phodrang Dzongkhag Tenth Plan (2008‐2013).Royal Government of Bhutan: Gross national HappinessCommission Dagana Dzongkhag Tenth Plan (2008‐2013).Royal Government of Bhutan: Gross national HappinessCommission Sarpang Dzongkhag Tenth Plan (2008‐2013).Royal Government of Bhutan: Gross national HappinessCommission Punakha Dzongkhag Tenth Plan (2008‐2013).Royal Government of Bhutan: Gross national HappinessCommission Chukha Dzongkhag Tenth Plan (2008‐2013).Royal Government of Bhutan: Gross national HappinessCommission Gasa Dzongkhag Tenth Plan (2008‐2013).112

12. ANNEXES1. THE STRATEGIC ASSESSMENT PROCESS2. MACROZONING OF SELECTED FOCUS AREAS3. LEGAL FRAMEWORK FOR THE STRATEGIC ASSESSMENT4. LIST OF PARTICIPANTS (WORKSHOPS 1 AND 2)5. THE (ZERO OPTION) SCENARIO6. PROCESS ACTION PLAN113

12.1 ANNEX‐1: THE STRATEGIC ASSESSMENT PROCESSThe Strategic Assessment Process carried out to assess environmental, social,economic and overall GNH impacts expected from investments in hydropowerprojects on the Punasangchu River basin (Basin‐2). The Process was specificallytailored to the Bhutanese context and designed to:1. Deliver a rapid assessment based on a consultative process involving allinstitutional stakeholders of concerned Dzongkhags, Line Ministries, privatesector interests and civil society.2. Consider various development alternatives that could result from the currentand proposed hydropower investments.3. Consider the wider development impacts over a pre‐defined and agreed areaof influence that far exceeded the actual impact footprint of eachinvestment.4. Extend the scope of EIA’s carried out for the investment projects required bythe Environmental Assessment Act of 2007, the Regulations on theEnvironmental Clearance of Projects and the Regulation on StrategicEnvironmental Assessment of 2002.A: KEY STAGES IN THE STRATEGIC ASSESSMENT PROCESSThe stages of an SEA/<strong>SA</strong> process are similar to the stages of an Environmental ImpactAssessment (EIA) process. Though the stages are similar, the <strong>SA</strong> process is verydifferent from the internationally agreed format of an EIA.The distinguishing attributes of an SEA/<strong>SA</strong> are that: They are tailored to each specificcase; They have inherent flexibility; They require the continued and activeparticipation/consultation of all concerned stakeholders; They consider impacts overa large geographic area and over an agreed and temporal scope that far exceeds theanalytical cover of an EIA; They are shaped and contained by an agreed set ofObjectives and Sub‐Objectives; They consider a number of viable alternatives ordevelopment options; They are rapid and require low levels of detail (low dataresolution) and finally, their mainstreamed results are the product of consensus andserve to effectively inform planning and decision making processes.

SEA/<strong>SA</strong> PROCESS STAGESIt should be noted that an SEA/<strong>SA</strong> process is a “learning” process in which the resultsof monitoring serve to improve the resolution of outcomes with each cycle. Theprocess should be repeated prior to each planning cycle (prior to each 5‐yearplanning cycle).Each stage of the process detailed in the graphic above is detailed in the sectionbelow.SCREENINGdetermine whether:Policies, programmes, plans, developmentproposals and complex investments projects(the object) are screened by theEnvironmental Authority or by the proponentAuthority responsible to determine the needto subject the object to an SEA/<strong>SA</strong> process.The screening process requires that theEnvironmental Authority, the proponentAuthority or similar question the object to• The Policy, Plan, Programme, Development Proposal or Complex InvestmentProject is likely to have significant environmental, social or economic impactsthat could be reduced by subjecting it to the SEA/<strong>SA</strong> procedure.• The Policy, Plan, Programme, Development Proposal or Complex InvestmentProject sets an enabling framework or catalyses further projects that willrequire an EIA according to national legislation.115

• The Policy, Plan, Programme, Development Proposal or Complex InvestmentProject is likely to have significant impacts on societal activities whichthemselves are likely to result in significant environmental, social oreconomic impacts (e.g. Expansion of infrastructure, urbanisation, transport,special development zones, settlement in the affected area, etc.).• The Policy, Plan, Programme, Development Proposal or Complex InvestmentProject is exempt from the SEA/<strong>SA</strong> process following a clear demonstrationthat it will not have any environmental consequences.The National Environment Commission, together with its partners the Gross NationalHappiness Commission and the Land Commission considered that proposedhydropower developments planned or currently being implemented on Basin‐2 werelikely to have significant development, environmental, social and economic impacts.As such, the three Commissions requested that a Strategic Assessment Process beinitiated to:- Identify and mitigate environmental, social and economic impacts;- Inform development planning processes at both the Dzongkhag and Centrallevels of Government and- Assure optimal development outcomes from proposed investments.SCOPINGThis phase of the <strong>SA</strong> defines the informationthe <strong>SA</strong> report should provide. It concentrateson relevant impacts and possible alternativesand includes:1. The environmental objectives andindicators (if any at this stage) thatshould be considered by the <strong>SA</strong>2. The environmental impacts to beconsidered by the <strong>SA</strong> including cumulative impacts.3. A decision on the alternatives to be considered by the <strong>SA</strong>. Scoping will resultin a listing of alternatives that will be considered and assessed by theprocess.4. An approach to the assessment (baseline studies and surveys, forecasting,back‐casting, scenario building, expert judgement, etc.)5. A full justification for leaving issues out of the <strong>SA</strong> that might have beenproposed during the scoping phase.116

IDENTIFICATION, SELECTION AND ASSESSMENT OF ALTERNATIVESStakeholder participants identified four (4) alternative development alternatives,including a “business as usual” or no site development alternative during the Scopingstage of the <strong>SA</strong> Process. Each alternative was analysed by participants on the basis ofexpert judgment through scenario construction and forecasting. Preliminary impactand issue analysis was carried out for each of the alternatives proposed.The Assessment Phase considered the environmental, social, economic anddevelopmental impacts of the proposed industrial estate at the proposed site and analternate site. The Assessment Phase effectively contributed to:• The identification of: Natural assets; Risk areas; Development constraints:Planning conflicts; Conflicting resource demands; Predicted resourcedemand; Predicted urban expansion and investment areas; Demographictrends and settlement patterns, etc. Impacts (point source and cumulative)are identified and analysed (all considered relative to site visits, ancillarystudies, interviews, expert inputs and documentary evidence);• The identification of Sectoral synergies and inconsistencies and led to theidentification of options and opportunities;• The identification of suitable and targeted impact mitigation for eachidentified development action.• Recommendations to National and Dzongkhag administrations on the needto introduce outcomes to future planning and development of theDzongkhags directly and indirectly affected by hydropower development onBasin‐2 (including all support infrastructures and expansion areas).It should be noted that, as a direct result of its participative nature, the assessmentstage proved itself as a valuable integration and consensus‐building instrument vitalto the outcome of the <strong>SA</strong> process.SELECTION OF PREFERRED ALTERNATIVE<strong>SA</strong>nalysis and discussion of the four (4) proposed alternatives permitted participantsto evaluate the merits and demerits of each proposed development option. On thebasis of this analysis, participants arrived at a consensual decision regarding whichalternative(s) would be retained for further detailing and which would be rejected.The results of this analysis are presented in Section‐5 of this Report117

The results of the Assessment Phase are complied to prepare this Draft <strong>SA</strong> Report.The Report is then subjected to a further stakeholder consultation and validationprocedure and adjusted as necessary to prepare the Final <strong>SA</strong> Report.IMPACT EVALUATIONImpact evaluation normally relies on theavailability of suitable data sets andenvironmental baselines determined for thedefined area to be considered in theassessment. In the absence of robust datasets and baselines, the <strong>SA</strong> can be effectivelycarried out on the basis of expert judgement,rapid surveys and existing data sets.The National Environment Commission Secretariat has an environmental andbiodiversity baseline for the target area drawn from the Bhutan EnvironmentOutlook (2008), Environmental Impact Assessments carried out for thePunasangchu‐1 Hydropower project, and various other documentary sources. Theimpact assessment of development expected from the Basin‐2 hydropower projectsand its variants were assessed on the basis of scenario building and impactforecasting relative to a do nothing‐or zero option scenario. Forecasting was carriedout on the basis of expert judgement.SETTING PLANNING AND DEVELOPMENT PRIORITIESThe detailed outcome of the Strategic Assessment provides opportunities forNational and Sub‐National administrations to define development and investmentpriorities structured on a sequential development framework elaborated over a 20‐year time frame.Each identified development action is coherent to the overall development objectiveand its expected impacts (point source and cumulative) have been mitigated.Regular monitoring throughout their implementation periods will ensure that bothmitigation and management are adequate and effective.Prioritisation and sequencing should be reconsidered at regular intervals through theReview process described below in Item‐F of this chapter of the Report.INTRODUCING GNH MANAGEMENT AND MITIGATION MEASURESEach identified development action will have direct and indirect social,environmental, economic and “well‐being” (GNH) impacts. Taken individually, theimpact footprint of each development action would normally be mitigated andmanaged through EIA regulatory procedures.118

In an <strong>SA</strong> process, the expected/predicted impacts of development actions areconsidered jointly, over a large geographic area and over a significant period of time(20‐years). As such, the process considers direct and indirect point source andcumulative impacts and introduces consequent management and mitigationmeasures to address these.The effectiveness of introduced mitigation and management to offsetexpected/predicted impacts is also monitored at regular intervals through protocolsspecific to the <strong>SA</strong> Process and its future cycles.DEVELOPMENT CONDITIONALITYThe outcomes of the <strong>SA</strong> process provides development, planning and regulatoryauthorities with the means to define investment and development conditionality foreach development/investment type.Development conditionality serves multiple purposes:• Provides development authorities and private sector interests with a clearlydefined set of conditions that must be included in their proposal, design oractivity to ensure that predicted impacts are mitigated and managed prior toany agreement/license to proceed.• Ensures that incompatible development activities are not located in such away as to detract value and opportunity from existing or proposedinvestments (tourism areas are not located adjacent to industrial areas ornoxious service facilities such as waste treatment and processing).• Reduces the need for costly EIA’s and, as such, serves as an investmentpromotion tool.• Provides guarantees and assurance to investors and ensures that alldevelopment proposals or actions are treated in the same manner.• Conditionality can be applied to an area identified for similar developmenttypes.• Conditionality is an effective mechanism to manage expected cumulativeimpacts.B: THE STRATEGIC ASSESSMENT REPORTThe <strong>SA</strong> Report is written to informdecision‐makers on the environmental,social and economic ‐ GNH impacts of theprogramme, policy, plan or developmentproposal.119

• The Report is the outcome of the process. It is a document intended toinform National, Sectoral and Dzongkhag planning processes and introduceenvironmental management and mitigation measures.• The SEA Report is a concise document supported by Annexes that presentsthe findings of the Process and serves to inform National Planning Agencies(GNHC) and relevant Sector Planning bodies on the need to introduceadjustments, mitigation or other relevant recommendations;• The report informs future planning, programming and decision‐makingprocesses targeting the Dzongkhags within the projected area of influence ofthe proposed development actions.• The report provides the means to monitor progress against agreed baselines.The Report also describes: monitoring requirements; over whatperiod/frequency monitoring should be carried out; and, who shall beresponsible• The Strategic Assessment Report is a living document that should be revisedregularly to ensure that it remains pertinent to the national, regional andlocal development landscape.C: TECHNICAL REVIEWThe Technical Review of the <strong>SA</strong> process andReport is normally carried out by an externalneutral body and provides a means for qualityassurance of both the report and the process.The review determines whether the Reporthas addressed the issues raised during thescoping phase and determines and whetherall options and alternatives have been fullydiscussed, forecasts accurately presented anddetermines whether the level of participation has been adequate. The reviewprocess concentrates heavily on the Executive Summary that must accurately reflectthe contents of the Report.In the case of the current Strategic Assessment, the Draft <strong>SA</strong> Report will becirculated for comment and presented to a National Consultation Workshop forcomment and adjustment as required.120

D: ADOPTION, ENDORSEMENT AND RECORD OF DECISIONOn completion of the Technical Review, theapproved final <strong>SA</strong> report is submitted to ajoint meeting of the National EnvironmentCommission, the Gross National HappinessCommission and the National LandCommission.On receipt of the Draft <strong>SA</strong> Report, the JointCommissions consider: the integrity andcompleteness of the Report; whether the report represents a balanced and unbiasedrecord of the consensual opinion of Stakeholders; to what extent comments fromconsultative meetings have been taken into account and introduced to the Report;the relevance of impact management and mitigation measures; coherence withother Plans, Programmes or Strategies and the methods proposed to monitorsignificant environmental and socio‐economic impacts. Comments from the JointCommissions are introduced to the Report to produce the Final and definitive <strong>SA</strong>Report. Once finalised, the Commissions approve/accept to formally receive the <strong>SA</strong>report and their Chairman (the Prime Minister) endorses the document.Endorsement consists of a document known as the “Record of Decision” thatinstructs National and Sub‐National Administrations to introduce the outcomes totheir future planning, informs lower tiers of government on implementation andmanagement modalities; recommends the adoption of development conditionality,establishes impact and performance monitoring procedures and instructs on themeans to formalise Process Recommendations.E: IMPLEMENTATION AND MONITORINGThe <strong>SA</strong> Report has identified developmentpriorities and impact‐monitoring modalitiesto ensure that proposed management andmitigation measures are effective and areimplemented systematically. Systematicmonitoring will also identify unforeseenimpacts and allow the proponent orconcerned authorities to introduceappropriate mitigation at an early stage.Monitoring also gauges to what degreeprocess recommendations and outcomes are introduced to planning andmanagement processes at the Provincial, District and Local levels of government.Section‐8 of this Report details monitoring modalities and identifies the relevantNational, and Sub‐National Authorities that could assume monitoring121

esponsibilities. Actual monitoring responsibilities should be clearly attributed withinthe National, Provincial and District Plans (Annual Plan and Five‐year Plan).F: REVIEWThe Review Stage of an <strong>SA</strong> process is bothcritical and essential to subsequent planningcycles. It is during the review stage that theprincipal difference between an EIA and an<strong>SA</strong> is realised. An EIA is a one‐timeassessment followed by monitoring to ensurethat prescribed mitigation has beenintroduced and is effective. An <strong>SA</strong>/SEA is acontinuous and cyclic process where resultsof monitoring are re‐introduced tosubsequent <strong>SA</strong> process cycles thereby improving the resolution and effectiveness ofthe process itself.The <strong>SA</strong> Review Stage is carried before the initiating a subsequent cycle (the Processis initiated prior to a 5‐year or Annual planning cycle). The Review:• Contributes effectively to a critical assessment of development prioritiesidentified during the previous <strong>SA</strong> Process cycle.• Tests whether the prioritised development action is still relevant and considersits position relative to new actions that may now be required given an evolutionin the overall development landscape.• Test the overall effectiveness of mainstreamed of impact management andmitigation measures;• Allows for recommendations to be made regarding the introduction of newdevelopment actions during the subsequent Process cycle;• Identifies the need for the introduction of more robust impact management andmitigation.• Identifies weaknesses in the previous Process cycle and makes recommendationson corrective measures to be introduced to the subsequent cycle.In conclusion: The quality and effectiveness of an SEA/<strong>SA</strong> process improves each timethe process cycle is carried out to support and inform a particular planning cycle orinform development planning (the present case).122

12.2 ANNEX‐2: MACROZONING OF SELECTED FOCUS AREASPURPOSE:The purpose of macro‐zonation of the Area of influence or the focal areas identifiedby process participants is to describe a physical representation of prospectivedevelopment expected from their preferred alternative. As such, macrozoningserves to:• Identify the physical location of development type on a defined territory (areaof influence or selected focal area for development) and to fit in adjustmentsexpected from a Plan, Programme or Complex Development Project.• To assess the compatibility of proposed activities relative to the physicalcharacter of the site; adjacent social and economic activities, nature ofexpected impacts (environmental and socio‐economic), the nature of expectedcumulative impacts, future development options, infrastructure and proximityto areas with incompatible development or economic activities,METHODOLOGY:Within the context of this Strategic Assessment, process participants were asked toconsider the likely development impact of hydropower investments on Basin‐2relative to current land use and settlement patterns. They were then requested toproject future land use and settlement patterns over the 20‐year temporalframework of the assessment and to plot these as broad macro‐Zones on theterritory likely to be affected.Broad macrozoning presented in figures 12.2.3 and 12.2.4 below represent theopinion and choice of process participants. The macro‐zoning exercise would have tobe repeated to introduce greater precision to enable the National Land Commissionto introduce results to their National Digital Cadastre.Macro‐zones represent a consensual opinion on optimal use of available land andresources to accommodate forecasted development in any given geographic area.POLYGON (ZONE) CONDITIONING:For the purpose if this Strategic Assessment, “Polygon Conditioning” refers to theintroduction of development principles and parameters to development Zonesidentified by process participants and physically located on the territories likely to beaffected by hydropower development mega‐projects on the Punasangchu River.Conditioning describes: The type of development expected in each of identifiedZones; Acceptable development or investments in each Zone; unacceptable orincompatible development that would be excluded for a Zone; Requisite123

development planning; Recommended environmental mitigation and managementneeds for each Zone to offset possible point source or cumulative impacts and, ifrequired specific compliance monitoring needs.Conditioning has three principal purposes:1. Informs Municipal, Dzongkhag and Central planning and developmentAuthorities on territorial planning options and conditions attached to eachZone proposed in the option. Conditioning would then serve to informcoherent territorial planning and ensure that identified environmentalmitigation and management measures are systematically introduced(mainstreamed) to all future plans;2. Protects developers and investors against the possibility of incompatibledevelopment on adjacent or proximal land (example: an industrialdevelopment activity adjacent to a tourism development site);3. Promotes investment and development by: Guiding interested parties tolocations compatible to their proposed activity; informing interested partiesof development conditionality that must be met prior to approval of anydevelopment proposal; introducing transparent and clear procedures forapproval of each stage of any development action (concept approval, EIA,conditional license, final approval and license on inspection of completedworks).Development Zones identified by Process Participants are presented and describedin the figures below. Figure 12.2.1 is intended to demonstrate how the results andoutcomes of a Strategic Assessment process “fits” to the National Digital Cadastrebeing developed by the National Land Commission and how these will benefitenvironmental management and monitoring on local, regional and national scales.Figure 12.2.2 Details the salient features of the northern (Wangdue‐Punakha)Development Zone likely to be influenced by the development of mega‐Hydropowerprojects on the Punasangchu River. Figure 12.2.3 details macrozoning carried out byprocess participants for the northern development area. Figure 12.2.4 detailsmacrozoning carried out by process participants for the proposed Lhamoizingkadevelopment area.MANAGING, MONITORING AND MITIGATING DEVELOPMENT IMPACTSManagement and impact mitigation measures attached to each development zoneare attached to each plot described on the digital cadastre relative to any identifiedzone.Registered plot owners or prospective investors interested in acquiring a plot areprovided with documents detailing obligatory conditions that must be met prior toissuance of any license to develop. In the case of existing owners, these are provided124

with instructions on how to introduce adjustments to satisfy agreed impactmanagement and mitigation norms.Once this procedure has been completed, institutions such as the NEC caninterrogate any plot on the cadastre and retrieve information detailing the: Name ofthe owner; Nature of the licensed activity; Expected impacts from the activity;Agreed mitigation measures described in the development EIA; Date the EIA wasapproved; Agreed reporting schedules; Dates reports were received; Monitoringschedules and outcomes; Details on future monitoring needs which will informDzongkhag Environment Officers and NEC monitoring teams; Use of restrictedproducts (fertilizers and pesticides); Nature and volume of wastes generated;Compliance to agreed treatment of generated waste and other information asrequired by the regulating authority..Other sectors will also be able to interrogate plots to determine whether sectorspecific obligations have been met.125

Digital Cadastre‐based DevelopmentManagement System.Figure (12.2.1)LAYERSDESCRIPTIONThe 1st layer would normally be a base map describing a national, regional or local1 territory to be subjected to a territorial plan. The layer would detail salient geographicfeatures, settlements, natural assets, etc.A 2 nd layer could describe the area of influence of a particular development action (megaprojector plan). The layer would include details on administrative boundaries,2infrastructure, economic activities, environmental hotspots, national statistical data(settlements, demography, services, etc.) and other information common to all sectors.A 3rd layer could describe the physical, environmental and socio‐economic profile of a3 development focal area likely to be directly affected by the development action. This layerwill describe a baseline situation prior to implementation.A 4th layer could describe a territorial organisation of the development focal area. Itdetails development macro‐Zones to which is attached development conditionality that4 detail environmental, structural, architectural and social conditions that must be met byinterested parties (the State, Investors and developers). Incompatible activities to anyidentified development Zone are excluded and directed to an appropriate Zone.Development and conditioned macro‐Zones are delivered to the National LandCommission (NLC). The NLC will then prepare a digital cadastre of the macro‐Zone5 including details of: existing properties; current land use; identification and subdivision ofplots to be developed; existing infrastructure; planned infrastructure; natural features tobe protected; green areas; etc.A 6th layer could describe details of the digital cadastre within an identified macro‐Zone.6Plot numbers, occupant, use, demarcation points, references, etc.A 7 th layer could describe Sector specific information. In the case of NECS it woulddescribe: The licensed activity and details of the license holder; details of the EIA; Natureof Impacts or possible impacts; Reporting schedules; Monitoring schedules; Dischargeand emissions criteria; information on solid waste produced; details of any approved7reuse and recycling schemes; etc. This layer of information would significantly focus andimprove environmental management capacity (at central and decentralised levels) andserve as an effective means to ensure that mainstreamed management and mitigationmeasures are appropriate, effective and monitored continuously (in real time).An 8 th layer could provide other sectors with the necessary means to managedevelopment actions (detailed in National and Sub‐National Development Plans) to verify8that mainstreamed mitigation measures are effective and contribute to the delivery ofplanned development outcomes.The Cadastre based information system should be centralised and made available to allsectors and levels of government. As such, the system will contribute to: Coordination andcoherence amongst all levels and tiers of government; Good governance; Transparency;Future development planning; Environmental management; Monitoring and enforcement.126

NORTHERN FOCAL AREA: WANGDUE, PUNAKHA, GA<strong>SA</strong> DEVELOPMENT ZONE (Figure: 12.2.2)127

NORTHERN DEVELOPMENT ZONE: DEVELOPMENT MACROZONING (Figure: 12.2.3)128

POLYGON (ZONE) CONDITIONING:1 Pochhu Mixed Agriculture ZoneCONDITIONING:The zone extends from the confluence of the Pochu and Mochu rivers northwards tothe source of the Pochu River. The zone is delineated on both banks of the PochuRiver extending laterally along both banks of its tributaries.• Agricultural areas adjacent to the Pochu River are mapped and inventoried. Plotsand title‐holders entered to the national digital cadastre.o The limits of the zone are plotted on the cadastre. All properties within thezone are subject to comply to the same impact management regulationso Updated property titles complete with environmental managementconditions are delivered to each registered owner.o Available plots and abandoned plots are identified and made available toprospective interested parties.• A register of fertilizer use in the zone is established.o Title‐holders keep an updated log of fertilizer use.• A register of pesticide use in the zone is established.o Title‐holders keep a log of pesticide use.• Plot activity and waste profile is entered into an environment layer of the digitalcadastre information system.• Waste management infrastructure (relative to each plot) is entered into thecadastre information system (mains connection, septic tank, pit latrine, solid wastecollection, composting, burning, etc)• Discontinue the use of pit latrines and soak‐away pits for domestic sewage• Define limits to structural development including: height restrictions; architecturalstyle; colour; density; earthquake resistance; proximity to watercourses and GLOFrisk areas.Compatible development:• Tourism developments;• Tourism Services (not including laundry services);• Farm‐stay holiday facilities;• Nature trails;Incompatible development in this zone:• Industrial development and manufacturing;• High‐density residential development;• High‐rise structures;• Sanitary landfill sites;• Structural developments in GLOF risk areas.2 Mochu Mixed Agriculture and Tourism ZoneCONDITIONING:The zone extends from the confluence of the Mochu and Pochu rivers northwards tothe source of the Mochu River. The zone is delineated on both banks of the MochuRiver extending laterally along both banks of its tributaries.129

• Agricultural and Tourism areas adjacent to the Mochu River are mapped andinventoried. Plots and title‐holders entered to the national digital cadastre.o The limits of the zone are plotted on the cadastre. All properties within thezone are subject to comply to the same impact management regulationso Updated property titles complete with environmental managementconditions are delivered to each registered owner.o Available plots and abandoned plots are identified and made available toprospective interested parties.• Agricultural areas adjoining the Mochu River are subject to the same conditionalityas those described for the Pochu Mixed Agricultural Zone above.• Tourism developments/investments in the zone are mapped and inventoried. Plotsand title‐holders are entered into the national digital cadastre.o The nature and type of tourism establishment is recorded on the cadastre.This information will include the number of rooms and beds, public facilities(dining rooms, conferencing, recreational services, waste managementsystems in place, annual occupancy, number of staff, number of vehicles andtype of vehicle, energy sources, water sources and others.o Plots available for tourism development are identified on the cadastre andmade available to prospective investors/developers.• Formulate tourism development guidelines to include:o Density and height of built structures. No structure should exceed two floors.o Architectural character of built structures. Structures should be consistentwith local/national architectural vocabularies.o Standards for internal infrastructures including: waste water treatment; solidwaste management; standards for discharged effluents; external lighting;standards for access roads and internal roads;o Spoils disposal. Spoils generated during construction stages of tourismdevelopment shall be disposed of in registered spoils dump areas designatedby the proper Dzongkhag or Geog authority. Developers found to bedumping spoils randomly shall be fined and/or made liable for clean‐upcosts.o Fertilizer and pesticide use. The use of fertilizers and pesticides shall beregulated as per conditions applied to adjacent agricultural areas andtourism establishments shall maintain a logbook detailing pesticide andfertilizer use.o Waste disposal. Solid waste shall not be incinerated on site. All solid wasteshall be disposed of in municipal waste disposal facilities.o Wastewater treatment. Distant properties shall be equipped with selfcontainedcompact biological treatment systems (Secondary treatment).Treated water should be used for irrigation purposes. When possible,properties shall be connected to mains sewer lines.• Privatisation of common property resources such as: riverbanks, watercourses,protective green belts and others shall be prohibited.• No tourism structures shall be permitted in designated GLOF risk areas.Compatible Development:• Farm and home stay facilities;• Tourism compatible small and medium scale enterprises (restaurants, shops,130

handicrafts, adventure sports, bicycle rental, nature trails, guiding services, etc.);• Expansion of villages and settlements;• Market gardeningIncompatible Development:• Heavy and Medium Industries;• Visible quarries and mines that detract from the scenic character of the area;• High rise (+4 floors) urban development or urban expansion;• High density urban development;• Sanitary landfill sites;Polluting activities. Any development likely to generate noxious or particulate airemissions or potential noxious wastewater discharges. These could include:industry, manufacturing, brick works, pulp and paper, vehicle maintenance, etc.)3 Gasa Low Impact Tourism ZoneCONDITIONING:The low impact tourism zone encompasses Gasa Dzongkhag and northern PunakhaDzongkhag. The zone is integral to the Jigme Dorji National Park (JDNP). As aterritory integral to the National Park, its development options are severely curtailedby current Protected Area Management principles and practice. Park managementprinciples also ensure that impacting development cannot be considered.• All land use types must be recorded, mapped and entered into the national digitalcadastre. These include: settlements, cultural sites and values, administrativefacilities, monasteries, natural values, trekking routes, campsites and others.• Future development options include:o Low Impact Tourism including but not limited to: Farm and home stay holidayaccommodation; Lodges and Resorts catering to national and internationaltourism and in particular the trekking market segments; Serviced campsites;Activity/Adventure tourism products (climbing, white water rafting,hydrospeed, canyoning, canopy walks; Interpreted Nature Trails);o Tourism support and guiding services;o Market Gardening;o Organic farmingo Expanded production and marketing of certified of non‐wood forestproducts.o A full feasibility study detailing options, opportunities and optimal numbers ofdevelopment types should be carried out prior to any decision on permissiblefuture development in JDNP.• Expansion of potential economic and social development opportunities indesignated JDNP territories requires that Park management principles be revisedto enable resident populations to benefit from development opportunitiesavailable to peoples residing in areas not limited by Park Management principlesand objectives. The Nature Conservation Division of the Department of Forestscould consider revising Park Zonation to describe development zones andcorridors. Areas adjacent to the new road linking Punakha and Gasa town couldbe considered a development zone. An area defining a development perimeteraround Gasa town could also be declassified.131

Conditions for development:• Design criteria detailing structural development must be formulated. Criteriamust address: permissible density and height of structures; architectural styles;preferred materials; source of building materials; obligatory waste managementregulations; use of toxic or noxious materials.• All developments must comply with strict EIA regulations imposed on allproposed developments and investments.Wastewater treatment:• All tourism facilities shall be required to install state of the art compact biologicaltreatment units of sufficient capacity to treat wastewater generated from allsources (at full occupancy);• Villages shall be supplied with appropriate treatment facilities and provided withthe means to connect all properties to the facility.• Licenses for construction of individual septic tanks shall be discontinued.• The use of soak pits and pit latrines shall be discontinued.• Discharges of raw sewage to any receiving water shall be prohibited and strictlyenforced.• Dzongkhag Environment Officers will establish a regular water‐monitoringschedule.Solid waste management:• Appropriate facilities shall be made available to Gasa Dzongkhag.o Incineration shall not be permitted.o All tourism establishments shall practice re‐use and recycling. Arrangementsmust be made to transport sorted material to collection points in Punakha orWangdue.o Dumping of waste oils (all sources) is prohibited. Waste oils must betransferred out of the area to registered collection points.o Gasa Dzongkhag should evaluate and select the most appropriate option forthe treatment of municipal and consolidated waste (from distant tourismfacilities). These could include: Baling systems; Waste reduction, recyclingand composting; External treatment.Spoils management:• Prepare a spoils management plan. Spoils originating from building, road works,demolition, construction of electrical transmission infrastructure, or any otherengineering work shall be disposed of in agreed locations that do not interfere withany natural system. Dumping in micro‐valleys, watercourses or liable to slip shallnot be prohibited.o Spoils re‐use and recycling procedures shall be developed and enforced.Agriculture:• Agricultural areas in Gasa Dzongkhag are mapped and inventoried. Plots and titleholdersentered to the national digital cadastre.o The limits of each identified agricultural area is plotted on the cadastre. Allproperties within any agricultural area is required to comply to the sameimpact management regulationso Updated property titles complete with environmental managementconditions are delivered to each registered owner.132

o Available plots and abandoned plots are identified and made available toprospective interested parties.• A register of fertilizer use agricultural areas is established (on a plot by lot basis).o Title‐holders must keep an updated log of fertilizer use.• A register of pesticide use agricultural areas is established (on a plot by lot basis).o Title‐holders must keep a log of pesticide use.• Plot activity and waste profile is entered into an environment layer of the digitalcadastre information system.4 Punakha Cultural Heritage and Tourism ZoneCONDITIONING:The zone describes the area adjacent to and in line of sight of Punakha Dzong. Thecultural and historical character of the site precludes adjacent development thatwould detract from its character. As such, any development likely to impact the sitewould be excluded and redirected to a more appropriate site.All land use types must be recorded, mapped and entered into the national digitalcadastre.• Install waste collection at all parking areas used by visitors to the Dzong.• Construct toilet facilities with wastewater holding tanks (if not connected to mainssewers) adjacent to all parking areas used by visitors.• All structural development shall be designed to standards fully compatible with thearchitectural style of the Dzong.• Construction in GLOF risk areas shall be prohibited.• Commercial facilities (shops, restaurants) in the vicinity of the Dzong shall besubject to site‐specific regulations. Regulations shall instruct on:o Sign posting: identification of all commercial business shall be discreet andunique to this site. Carved or sand blasted wood signposting of specificdimensions could be considered. Natural wood with painted highlights shouldbe the norm. The standard blue and white sign is not appropriate to this site.• Punakha Dzongkhag officers should carry out regular visitor surveys to monitor sitemanagement effectiveness. Service adjustments should be made regularly ifrequired from results of visitor surveys.5 Khuruthang New Town and Expansion ZoneCONDITIONING:The zone comprises the current limits of Khuruthang new Town and an area adjacentto it that has been designated an urban expansion area by process participants. Thenew town was developed according to agreed town plans. Further expansion of theurban footprint should be subject to the following conditions:• Development of the urban expansion area should be detailed in a new urban plan.o The local population must agree to the proposed urban plan.o The plan will detail the: Physical layout of future expansion areas; density,maximum permissible height; infrastructure layout; location of publicservices; location of public areas and parks; location of recreational areas;areas available for commercial development; and others.o All subdivided plots must be recorded, mapped and entered into the national133

digital cadastre.o The digital cadastre shall be updated as plots are assigned. The cadastre shallrecord the title holder, type of structure to be constructed, end use of thestructure, number of people residing in or using the structure, volumes ofwaste and type of waste generated, water consumption, source of the watersupply to the property, connection to mains sewer or details of otherwastewater infrastructure, electrical consumption, type of heating, etc.Environmental Management:• Wastewater shall be channelled from all properties to a proposed wastewatertreatment facility adjacent to Lobesa (see Zone 11 below).o Discharge of untreated wastewater to the Punasangchu River is prohibited.o The use of septic tanks and soak pits shall be discontinued.o Contaminated wastewater (hospital waste, hydrocarbon pollutedwastewaters, wastewater polluted by other chemical substances) shall besubject to specific treatment regimes to be elaborated by Dzongkhag officialsand approved by the NECS.o Waste oils and fuels (from garages and vehicle service facilities) shall betransported to collection points. Source and volume shall be recorded at thecollection point and revenues generated through reprocessing distributed(according to volume delivered) to respective sources.• Solid Waste/Municipal Waste: Waste shall be collected and treated in facilitiescommon to Punakha, Khuruthang, Lobesa and Wangdue. Consideration should begiven to alternatives to a common sanitary landfill site.o Khuruthang Municipality shall introduce obligatory waste sorting, re‐use andrecycling practices to all households and businesses.o The Municipality shall require that all new investments/developments, likelyto generate significant volumes of waste, introduce demonstrable wasteminimisation practice to their operations.o Composting of organic waste could be viable treatment alternative butrequires efficient sorting at the source.o Discussions should be initiated with central authorities to explore thepossibility of transferring municipal solid waste to a central treatment facility.A central treatment facility such as an arc plasma incineration plant couldeffectively treat waste generated in Punakha, Khuruthang, Lobesa, Wangdue,Thimphu, Paro and Haa. Arc Plasma incineration does not produce emissionsand burn gas can be used to generate electricity to offset costs. The byproductis a vitrified material that can be used as an aggregate in roadconstruction.• Potable water supplies: water sources for Khuruthang town and its futureexpansion area shall be mapped and entered into the national digital cadastre.Information in the cadastre shall include: maximum and minimum flow; number ofplots supplied by any given source; treatment required (by source); regularlyupdated water quality data; water quality criteria that should not be exceeded(NECS National Standards for drinking water).o NECS, together with the relevant Dzongkhag authorities shall be responsiblefor regular monitoring and quality checks on drinking waters supplied toKhuruthang residents134

o In view of the forecast future expansion of Khuruthang it is advisable toidentify and secure additional potable water sources and supplies.• Emissions: emissions shall be regulated through the strict implementation ofnational regulations and management practice. The National EnvironmentManagement Council shall make its staff available to Dzongkhag officers to providetraining (as needed) to Dzongkhag and Geog officialso Investments and developments likely to generate emissions shall not bepermitted in the Khuruthang area unless they demonstrate verifiableemission control mechanism in their project/investment proposal.Spoils management:• Prepare a spoils management plan. Spoils originating from building, road works,demolition, construction of electrical transmission infrastructure, or any otherengineering work shall be disposed of in agreed locations that do not interfere withany natural system. Dumping in micro‐valleys, watercourses or liable to slip shallnot be prohibited.o Spoils re‐use and recycling procedures shall be developed and enforced.Compatible Developments:• Tourism services;• Small and medium scale non‐polluting enterprises• Commerce.Incompatible Developments:• Emission generating industrial development;• Mineral processing;• Abattoirs.6 GLOF Risk ZonesCONDITIONING:• GLOF risk zones identified by the Department of Geology and mines shall berevised and included in the digital cadastre as development exclusion areas.• Structures present in GLOF risk zones should be relocated (if possible) to safe areas.• GLOF risk zones can be developed as public parks, green belts and recreationalareas (footpaths, cycle trails, picnic areas, etc).• GLOF warning systems must be introduced and the population instructed onresponse relative to predicted danger levels.• Contingency (GLOF response) plans must be prepared by the relevant Dzongkhagadministration and made known to both government officials and the population.7 Conservation and Recreation ZoneCONDITIONING:The zone designates the Toepi Rongchhu River valley and catchment basin. Processparticipants have described the area as a development exclusion zone and natureconservation zone. As such, only soft developments should be permitted in thedelimited zone. These include:• Interpreted nature trails;• Picnic sites equipped with picnic tables, BBQ pits, waste disposal receptacles;• Parking area;135

• Field toilets;• Fire control and management facilities.Site management should be responsibility of Lobesa Municipality on behalf of theNature Conservation Division of the Department of Forests‐Ministry of Agriculture.Zones8, 9 and10Lobesa Town, Lobesa Urban Expansion Zone and Lobesa Servicesand Manufacturing ZoneCONDITIONING:Implementation of the Punasangchu‐1 hydropower project has led to a rapid andunplanned expansion of Lobesa Town. The proposed expansion zone has beendescribed on the assumption that the strategic location of Lobesa (on the main East‐West‐North and South highways) will continue to drive growth and expansion. It hasbeen forecast that Lobesa will become the business and commercial hub of theWangdue Punakha conurbation. The proposed expansion zones would be availablefor residential purposes (Zone 9) and (Zone‐10) primarily for commercial and servicepurposes.Planning: Lobesa town should be precision mapped. Plots, parcels, commercialentities, religious sites, services, infrastructure layout and others must be enteredinto the digital cadastre.• The limits of future urban (9) and commercial/services expansion areas (10) shouldbe identified and plotted on the digital cadastre.• The expansion area should then be planned and the plan presented to the generalpublic for comment and endorsement.• Plots can be made available once land within the expansion area has been secured.o Alternatively, plot owners within the expansion area can place theirproperties on the market and receive market value at a time of theirchoosing.• The town plan and plan for future expansion areas must detail all physical planningaspects. These would include but not be limited to: Roads; electricity distributioninfrastructure; telecommunications infrastructure, individual plots; green areas;commercial use areas (shops, markets, restaurants, hotels and inns, etc);recreational areas; services (schools, hospitals, police stations, etc.); garages andothers.oooThe consolidated town plan will also detail environmental managementinfrastructure. This will include but not be limited to: Water distributioninfrastructure; wastewater collection infrastructure; solid waste collectionpoints; solid waste sorting facilities; waste water treatment facility describedas Zone 11 below.The plan will detail a zoning plan for the commercial/services expansion zoneto ensure that like activities are clustered. Social service facilities must beclustered in an area that is both easily accessible to town residents but alsodistant from any incompatible activity (noise generating activity would not beplaced adjacent to a school or hospital).The consolidated town and expansion area plan will be mainstreamed toembed environmental and socio‐economic safeguards designed to mitigateexpected impacts.136

o The plan will be screened to test the level of mainstreaming by NECS andGNHC.The digital cadastre shall be updated as plots are assigned. The cadastre shall recordthe title holder, type of structure to be constructed, end use of the structure,number of people residing in or using the structure, volumes of waste and type ofwaste generated, water consumption, source of the water supply to the property,connection to mains sewer or details of other wastewater infrastructure, electricalconsumption, type of heating, etc.Environmental management conditionality will be the same as that described forKhuruthang. The purpose is not to introduce management variants, but to try tostandardise under the principle that Punakha, Khuruthang, Lobesa, Bajo, andWangdue will become a conurbation and will be managed/administered under asingle Municipal structure.Environmental Management:• Wastewater shall be channelled from all properties to a proposed wastewatertreatment facility adjacent to Lobesa (see Zone 11 below).o Discharge of untreated wastewater to the Punasangchu River is prohibited.o The use of septic tanks and soak pits shall be discontinued.o Contaminated wastewater (hospital waste, hydrocarbon pollutedwastewaters, wastewater polluted by other chemical substances) shall besubject to specific treatment regimes to be elaborated by Dzongkhag officialsand approved by the NECS.o Waste oils and fuels (from garages and vehicle service facilities) shall betransported to collection points. Source and volume shall be recorded at thecollection point and revenues generated through reprocessing distributed(according to volume delivered) to respective sources.o The quality and character of wastewater generated in the commercial andservices zone will be monitored by Municipal Environment Officers,Dzongkhag Environment Officers and by NECS monitoring teams.o Provisions for pre‐treatment prior to discharge to main sewer lines must beestablished and enforced during the design approval and licensing process(EIA). NECS will ensure that agreed conditions have been met and are beingmaintained by the license holder.• Solid Waste/Municipal Waste: Waste shall be collected and treated in facilitiescommon to Punakha, Khuruthang, Lobesa and Wangdue. Consideration should begiven to alternatives to a common sanitary landfill site.o Lobesa Municipality shall introduce obligatory waste sorting, re‐use andrecycling practices to all households and businesses.o The Municipality shall require that all new investments/developments, likelyto generate significant volumes of waste, introduce demonstrable wasteminimisation practice to their operations.o Composting of organic waste could be viable treatment alternative butrequires efficient sorting at the source.o Discussions should be initiated with central authorities to explore thepossibility of transferring municipal solid waste to a central treatment facility.A central treatment facility such as an arc plasma incineration plant couldeffectively treat waste generated in Punakha, Khuruthang, Lobesa, Wangdue,137

Thimphu, Paro and Haa. Arc Plasma incineration does not produce emissionsand burn gas can be used to generate electricity to offset costs. The byproductis a vitrified material that can be used as an aggregate in roadconstruction.Spoils management:• Prepare a spoils management plan. Spoils originating from building, road works,demolition, construction of electrical transmission infrastructure, or any otherengineering work shall be disposed of in agreed locations that do not interfere withany natural system. Dumping in micro‐valleys, watercourses or liable to slip shallprohibited.o Spoils re‐use and recycling procedures shall be developed and enforced.• Potable water supplies: water sources for Lobesa Municipality including its futureexpansion area shall be mapped and entered into the national digital cadastre.Information in the cadastre shall include: maximum and minimum flow; number ofplots supplied by any given source; treatment required (by source); regularlyupdated water quality data; water quality criteria that should not be exceeded(NECS National Standards for drinking water).o NECS, together with the relevant Dzongkhag authorities shall be responsiblefor regular monitoring and quality checks on drinking waters supplied toLobesa residentso In view of the forecast future expansion of Lobesa it is advisable to identifyand secure additional potable water sources and supplies.• Emissions: emissions shall be regulated strictly according to established nationalstandards. The NECS shall make its staff available to Dzongkhag officers to providetraining (as needed) to Dzongkhag and Geog officialso Investments and developments likely to generate emissions shall not bepermitted in the Lobesa area unless they demonstrate verifiable emissioncontrol mechanism in their project/investment proposalCompatible Developments:• Tourism services;• Small and medium scale non‐polluting enterprises• Commerce (shops, restaurants, financial services, taxi services, etc)• Managed market area.• Bus terminal• Professional vehicle repair facilities.Incompatible Developments:• Emission generating industries;• Any industry or manufacturing enterprise likely to generate toxic waste and/or dust• Mineral processing;• Abattoirs and commercial meat processing facilities.11 Lobesa Region Wastewater Treatment Facility and ForestCONDITIONING:The zone identified for construction of Lobesa, Punakha, Khuruthang, Bajo andWangdue wastewater treatment facility has been located on apparently vacant landsouth of the Chimi Lhakhang Monastery. The site has been selected on the principle138

that it is of sufficient size to accommodate both a closed biological treatment stationand a plantation forest to serve as a final filter for treated effluents.The facility will receive gravity flows from Lobesa, Khuruthang, Punakha, settlementsalong the Lobesa to Wangdue highway and the Natural Resources College.Wastewater from Bajo and Wangdue would need to be pumped to the treatmentfacility.• The precise location of the treatment facility and its adjacent forest must beplotted on the digital cadastre.o Sewer networks must be planned and plotted on the cadastre.o Pumping stations will be plotted on the cadastreo Plots excluded from the sewerage network must be identified and plotted onthe cadastre. The plot will identify the type of wastewater system being used(septic tank, soak pit, pit latrine, or other). Alternative plot specificwastewater treatment will be discontinued as the mains sewerage networkexpands.• NECS will participate in station design and process selection.o NECS will approve and oversee monitoring of the treatment plant and itseffluent.o A contingency plan will be elaborated in the event the plant should fail.o All discharges of untreated wastewater effluents are prohibited. Dischargeevents must be reported to NECS.o NECS, Dzongkhag Environment Officers and Municipal Environment Officerswill design a robust monitoring system complete with fixed (geo‐referenced)monitoring stations both upstream and downstream of a point on thePunasangchu River perpendicular to the treatment facility.• Treated water could be used for irrigation purposes if deemed to be clear of allpathogens and other toxic elements.o Treated water cannot be used for drinking purposes unless treated to tertiarylevels and tested safe.12 Monastery and Cultural Heritage SiteCONDITIONING:Chimi Lhakhang has been built on a hilltop adjacent to the Punasangchu and ToepiRongchhu Rivers. The base of the hill describes the limits of the Zone.As a religious, cultural heritage and national heritage site the zone is considered as adevelopment exclusion zone.The Lhakhang shall be serviced by Lobesa Municipality: Solid waste collection anddisposal; Connection to the Lobesa wastewater treatment facility.Compatible development:• Service facilities to improve and regulate visitor access to the site. All facilitieswould be located the adjacent mixed agricultural zone at the base of the hill.These could include: Parking areas; toilet facilities; serviced rest area.o Toilets shall be connected directly to the Lobesa Waste water treatmentfacility.Incompatible development:139

• All structural development incompatible with the nature of the religious site;• Residential areas;• Commercial developments;• Industrial developments• Polluting industries.13 Armed Forces Relocation ZoneCONDITIONING:Zone‐19 describes the limits of the current armed forces base and training centre.This large zone is now located on prime land that will be required for the futureexpansion of Wangdue town. As such, it is strongly recommended that an alternatesite for the base and training facility be identified, reserved for future use andplotted on the digital cadastre.As a national security facility, information regarding specific internal developmentshall not be made available to the national digital cadastre. The cadastre will onlydetail the external limits of the site and any no‐build setback that could beestablished around its perimeter.• The armed forces facility will be connected to the mains sewer and theLobesa wastewater treatment facility.• Armed forces vehicles will deliver solid wastes to a designated Municipaltreatment facility.• Dangerous materials and time‐spent ordnance (shells, munitions, explosives)shall be disposed of according to armed forces regulations in safe conditions.14 Mixed Agriculture ZonesCONDITIONINGThe mixed agriculture zones are located on both the eastern and western banks ofthe Punasangchu River. The zones are primarily agricultural but also contain villagesand individual residential/farm building units.• Identified Agriculture Zones are critical to the social fabric of the area of influenceand are vital to the protection of rural landscapes of vital importance to expansionof a local tourism economy.All plots, properties or agricultural service enterprises in designated MixedAgricultural zones must be mapped and fully inventoried. Plots and title‐holdersentered to the national digital cadastre.o The limits of the zone are plotted on the cadastre. All properties within thezone are subject to comply to the same environmental and socio‐economicimpact management regulations.o Updated property titles complete with environmental managementconditions are delivered to each registered owner.o Available plots and abandoned plots are identified and made available toprospective interested parties.• Mixed Agricultural zones are subject to the same conditionality as those describedfor the Pochu Mixed Agricultural Zone (described above).• Describe a critical area needed for production of rice, cereals and produce for local140

consumption. This is the area that cannot be compromised in favour ofdevelopment.o Identify measures to combat property speculation that could lead to areduction in designated mixed agricultural areas.o Consider introduction of compensatory fiscal instruments to reduce revenuegaps between agriculturalists and other commercial activities.Compatible Development:• Tourism: hotels, resorts, restaurants.• Farm and home stay facilities;• Tourism compatible small and medium scale enterprises (restaurants, shops,handicrafts, adventure sports, bicycle rental, nature trails, guiding services, etc.);• Expansion of villages and settlements;• Market gardeningIncompatible Development:• Any activity that reduces the area available to agriculture• Heavy and Medium Industries;• Visible quarries and mines that detract from the scenic character of the area;• High rise (+4 floors) urban development or urban expansion;• High density urban development;• Sanitary landfill sites;Polluting activities. Any development likely to generate noxious or particulate airemissions or potential noxious wastewater discharges. These could include:industry, manufacturing, brick works, pulp and paper, vehicle maintenance, etc.)15 Mixed Commercial and ResidentialCONDITIONING:The mixed commercial and residential zones describe areas that are already settledalong the Lobesa to Wangdue highway and existing settled areas in Wangdue Town.The zone includes limited expansion possibilities to accommodate future growth.Conditioning relative to these zones is identical to that described for Lobesa (Zones8,9 and 10) and reflects a needs to introduce coherent and consistent design,development, management and regulatory frameworks in view of a future where alltowns, settlements, commercial activities and services are managed as a unifiedMunicipal structure – The Punakha –Wangdue conurbation.16 College of Natural ResourcesCONDITIONING:The limits of the plot assigned to the College of Natural Resources must be enteredinto the digital cadastre together with a detail of all its component structures andinfrastructures. The digital cadastre will identify end‐use of each building, thenumber of people it can accommodate, water use, on‐site waste water treatment,maximum and minimum volumes and nature of solid waste generated, energyconsumption, any use of renewable energy sources, and others.• The College will be required to connect to the mains sewerage network anddiscontinue using any on‐site treatment systems.• Additional structural development will be subject to the same regulatory141

frameworks as those described for adjacent urban, residential or mixed residentialand commercial zones.17 Tourism ZoneCONDITIONING:A tourism zone has been delineated on the western banks of the Punasangchu River.The zone is located above GLOF risk areas identified by the Department of Geologyand Mines. The zone includes existing tourism properties such as the Dragon NestHotel and the Punasangchu Cottages. The zone could accommodate other propertiesupstream of the Punasangchu Cottages property.• Tourism developments/investments in the zone are mapped and inventoried. Plotsand title‐holders are entered into the national digital cadastre.o The nature and type of tourism establishment is recorded on the cadastre.This information will include the number of rooms and beds, public facilities(dining rooms, conferencing, recreational services, waste managementsystems in place, annual occupancy, number of staff, number of vehicles andtype of vehicle, energy sources, water sources and others.o Plots available for tourism development are identified on the cadastre andmade available to prospective investors/developers.• Formulate tourism development guidelines to include:o Density and height of built structures. No structure should exceed two floors.o Architectural character of built structures. Structures should be consistentwith local/national architectural vocabularies.o Standards for internal infrastructures including: waste water treatment; solidwaste management; standards for discharged effluents; external lighting;standards for access roads and internal roads;o Spoils disposal. Spoils generated during construction stages of tourismdevelopment shall be disposed of in registered spoils dump areas designatedby the proper Dzongkhag or Geog authority. Developers found to bedumping spoils randomly shall be fined and/or made liable for clean‐upcosts.o Fertilizer and pesticide use. The use of fertilizers and pesticides shall beregulated as per conditions applied to adjacent agricultural areas andtourism establishments shall maintain a logbook detailing pesticide andfertilizer use.o Waste disposal. Solid waste shall not be incinerated on site. All solid wasteshall be disposed of in municipal waste disposal facilities.o Wastewater treatment. Distant properties shall be equipped with selfcontainedcompact biological treatment systems (Secondary treatment).Treated water should be used for irrigation purposes. When possible,properties shall be connected to mains sewer lines.• Privatisation of common property resources such as: riverbanks, watercourses,protective green belts and others shall be prohibited.• No tourism structures shall be permitted in designated GLOF risk areas.Compatible Development and Land Use:• Agricultural activities;• Low rise, low density residential areas;142

• Restaurants;• Souvenir shops.Incompatible Development:• Any type of industry;• Waste water treatment facility;• Sanitary landfill;• Any noise generating activity including amusement parks;• Garages and other types of vehicle servicing facilities.18 Bajo, Bajo New Town and Expansion ZonesCONDITIONING:The Bajo New Town and adjacent expansion zones describe areas that are eitheralready settled on the Eastern banks of the Punasangchu River, are beingconstructed (Bajo New Town) or are likely to be planned and constructed as demandfor housing and commercial units increases over the 20‐year temporal framework ofthe assessment.Conditioning relative to these zones is identical to that described for Lobesa (Zones8,9 and 10) and reflects a needs to introduce coherent and consistent design,development, management and regulatory frameworks in view of a future where alltowns, settlements, commercial activities and services are managed as a unifiedMunicipal structure – The Punakha –Wangdue conurbation.• A detailed analysis of potential risks associated to a “worst case” GLOF emergencyshould be carried out. The study should focus on potential loss of property in BajoNew Town and other riverside properties and facilities.• A disaster preparedness contingency plan should be elaborated and tested.19 Military Area. Proposed Future Wangdue Town Expansion ZoneCONDITIONING:Zone 19 describes the current area occupied by the armed forces base and trainingcentre in Wangdue Town. The zone occupies approximately 40.5 hectares ofprimarily flat or minimal slope land. The zone bisects Wangdue Town and the NewTown being constructed on Bajo. Likewise, the military area fragments opportunitiesto plan infrastructure (roads, underground electrical and telecoms distribution, cablesystems and water supply and wastewater collection and pumping facilities.Process participants analysing future expansion options for Wangdue Townconcluded that: The Armed Forces Base and Training Centre would either have to berelocated; or that some of its land would have to made available for Wangdue city’sexpansion sometime over the 20‐year temporal framework of the Assessment.In either case the following issues would need to be considered during the designand planning stages of the expansion area.Planning Principles: The site provides a unique opportunity to prepare a ModelTown Plan that is both forward looking and effective. The Plan could Plan the area toservice the tourism focus of Wangdue. It proximity to the Wangdue Dzong makes the143

site ideal for a low‐rise residential and hotel area. The site would also contain shops,restaurants and entertainment centres (cinemas, parks, etc.). Sections of the Oldtown due to be demolished should be retained to give the city a unique historicfabric.Social and Environmental Management Principles: Site control and managementprocedures would be identical to those described for the other urban developmentareas in the future Wangdue‐Punakha conurbation (See Zones 5, 8, 9, 10, 17 and 18).20 Bajo Secondary School, Agricultural College and VocationalTraining InstituteCONDITIONING:The limits of the plots assigned to the Agricultural College, the Bajo SecondarySchool and the Vocational Training Institute (all located on the Eastern Bank of thePunasangchu River must be entered into the digital cadastre together with a detailof all their component structures and infrastructures. The digital cadastre willidentify end‐use of each building on each plot or parcel. In addition, the number ofpeople they can accommodate, water use, on‐site waste water treatment, maximumand minimum volumes and nature of solid waste generated, energy consumption,any use of renewable energy sources, and others will be recorded for each plot onthe digital cadastre.• The Secondary School and Agricultural College will be required to connect to themains sewerage network and discontinue using any existing on‐site treatmentsystems.Additional structural development will be subject to the same regulatoryframeworks as those described for adjacent urban, residential or mixed residentialand commercial zones.21 Punasangchu‐1 Reservoir Recreation ZoneCONDITIONING:A reservoir extending from the Punasangchu‐1 hydroelectric dam upstream to aforecast location north of the Punasangchu Cottages Resort will be created oncompletion of the building works. It is expected that the reservoir will be fullyestablished at the time of commissioning.• The reservoir will reduce winter flow rates (the river will become docile) andprovide opportunities for the reservoir to be used for recreational purposes.• During the monsoon period it is likely that river flow will approximate thoseexperienced at present without the existence of the Dam. As such, during themonsoon period, the reservoir would not be available for water‐based recreationalactivities.• The reservoir and all related infrastructure should be recorded on the digitalcadastre.o Maximum and minimum reservoir water levels should be clearly identified inthe cadastre.o The projected GLOF risk zone should be recorded on the cadastre.o A no build setback of at least 100m relative to the GLOF risk zone and linedescribing the maximum allowable reservoir level must be surveyed andmapped.144

Recreational use:Hydropower and other dammed reservoirs are commonly used for recreationalpurposes in most countries. Recreation is permitted according to strict rulesdesigned to assure the safety of persons and service providers using the resource.• A flagged chain will be suspended from bank to bank 1/2metre above the water todescribe a point beyond which no activity is permitted. The chain is the closestpoint any reservoir user can approach the Dam and its infrastructure.• Safe swimming areas must be identified and delimited using surface floats.o Bathing water quality must be tested on a regular basis. Bathing will beprohibited in the event that water quality falls below an agreed standard forbathing waters.o Either the Dzongkhag Environment Officer or a designated person from theMinistry of Health should carry out regular monitoring of the quality of bathingwaters.o Boating within a swimming area must be forbidden.• During minimal flow periods it will be possible for recreational users to use nonmotorisedvessels (canoes, pedal boats, sail boats, kayaks, row boats, windsurfsand others)o Motorised vessels should be permitted on condition that the operator haspassed a full training programme and is licensed to operate a motorised vesseland to carry passengers (family and friends).o Operators of commercial motorised vessels would have to pass a differenttesting procedure permitting them to operate a vessel with passengers (payingguests).o In both cases the license is intended to test the operators response in theevent of any emergency.• A response contingency plan should be elaborated to respond effectively in case ofoils, fuels or chemical spillage.Access Points: access to the reservoir could be from suspended jetties frontingtourism properties, water taxi stops, emergency response facilities and designatedswimming areas.• All access points will have to be agreed by the hydropower authority and Municipalofficers responsible for reservoir development and use.• Activities permitted from each designated access point must be clearly identifiedon the license.• Safety measures specific to each access point must be clearly identified on thelicense.• The relevant reservoir authority must approve construction techniques and designof any access point.• Suspended jetties should be the preferred option. A suspended jetty consists of afixed extremity on shore, a suspended platform and a hinged ramp and floatingplatform on the reservoir. This arrangement permits the jetty to adjust to thevarying water levels of the reservoir. The arrangement also permits the owner toquickly remove the jetty from the reservoir in the event of a flood or extremeflows.Safety measures: The reservoir authority must recruit and train safety personnel topatrol the reservoir, control its use and rescue vessels or individuals in distress.145

Commercial Uses: Commercial users wishing to establish water‐taxi businesses coulduse the reservoir. Other commercial uses could include: Dzong cruises, Water‐skiing;Gravel barging services and others. In all cases, commercial use must be compatiblewith recreational use and must always be controlled and licensed.146

SOUTHERN FOCAL AREA: LHAMOIZINGKA DEVELOPMENT ZONE (Figure: 12.2.4)147

POLYGON CONDITIONING:1 Punasangchu RiverCONDITIONING:The Punasangchu River will be altered radically as a result of planned hydropowerdevelopments. The proposed Sunkosh Dams will create two reservoirs extending 65kilometres from a point approximately 14 kilometres from the border with India atLhamoizingka.• Changes are likely to result in the loss of existing wetlands, riverbank habitats andexisting fish spawning and nursery areas. Changes are expected to be temporaryas wetlands, spawning and nursery become re‐established in other locations oncethe reservoirs reach their optimal levels.• River management plans will have to be adjusted to become reservoirmanagement plans.• Reservoirs will have to mapped, zoned and all risk areas identified. Risk areas willinclude but not be limited to: Areas prone to landslides; Surge risk areas to beavoided; Critical habitats; Critical watersheds; and others.o A development setback of at least 100m from surge and flood risk areas willbe delineated. No structural or infrastructural development should bepermitted within the setback.o Lands adjacent to the river and at risk from overtopping or breach must beclearly identified (for a worst‐case scenario). Development within these areasshould be limited to agriculture or other uses that do not require builtstructures.• Fish migration: The dams are likely to have a significant impact on fish migration.Though dam design does include provisions for the construction of fish ladders,there is no proof that these will be effective. As such, it is likely that themanagement of fish resources will shift from the management of resident andmigrating species to management of resident species within the reservoirs.• Spoils dumping: Spoils dumping into the reservoir basin, micro‐valleys andwatercourses must be strictly prohibited.• Discharges: All discharges of untreated wastewaters must be strictly prohibited.• Monitoring: The reservoir management body together with NECS and DzongkhagEnvironment Officers will be responsible for defining a reservoir‐monitoring plan.o The plan will identify fixed and geo‐referenced monitoring stations.o The position of each monitoring station will be entered into the digitalcadastre and linked to a publicly accessible database of monitoring results.o Monitoring will include species monitoring.• Contingency planning in event of oil spills: Use of the reservoir for commercialand recreation purposes will demand that the reservoir authority together withNECS and Dzongkhag officials elaborate an oil spill contingency plan.2 Sunkosh Dam and ReservoirsCONDITIONING:Two reservoirs would be created (13 and 52 kilometres respectively) if the Sunkosh4000 and Sunkosh lift dams are constructed. The reservoirs will create significant

water bodies that will significantly alter water current and flow patterns. Issuesrelated to the reservoirs have been described in Zone‐1 above. This section willdetail additional measures that should be taken into consideration in thepreparation of any reservoir use and management plan.• The reservoirs and all related infrastructure should be recorded on the digitalcadastre.o Maximum and minimum reservoir water levels should be clearly identified inthe cadastre.o The projected surge risk and flood risk zones should be recorded on thecadastre.o A no build setback of at least 100m relative to the GLOF risk zone and linedescribing the maximum allowable reservoir level must be surveyed, mappedand entered into the cadastre as a no‐development zone.• The sheer size of the proposed reservoirs will reduce both summer and winter flowrates and provide opportunities for the reservoir to be used for recreational andcommercial purposes.Recreational and Commercial use:Hydropower and other dammed reservoirs are commonly used for recreationalpurposes in most countries. Recreation is permitted according to strict rulesdesigned to assure the safety of persons and service providers (commercial users)using the resource.• A flagged chain will be suspended from bank to bank 1/2metre above the water todescribe a point beyond which no activity is permitted. The chain is the closestpoint any reservoir user can approach the Dams and their infrastructure.• Safe swimming areas must be identified and delimited using surface floats.o Bathing water quality must be tested on a regular basis. Bathing will beprohibited in the event that water quality falls below an agreed standard forbathing waters.o Either the Dzongkhag Environment Officer or a designated person from theMinistry of Health should carry out regular monitoring of the quality of bathingwaters.o Boating within a swimming area must be forbidden.• Recreational users will be permitted to use non‐motorised vessels (canoes, pedalboats, sail boats, kayaks, row boats, windsurfs and others). Users must be requiredto abide by strict safety regulations.o Motorised vessels should be permitted on condition that the operator haspassed a full training programme and is licensed to operate a motorised vesseland to carry passengers (family and friends).o Operators of commercial motorised vessels would have to pass a differenttesting procedure permitting them to operate a vessel with passengers (payingguests).o In both cases the license is intended to test the operators response in theevent of any emergency.• A response contingency plan should be elaborated to respond effectively in case ofoils, fuels or chemical spillage.• Commercial use shall include but not be limited to: Water taxis, reservoir cruise149

oats (overnight accommodation and guest services); Ferry boats; Freight barges;Bulk carriers (aggregates) and others. Commercial use must be compatible withrecreational use and must always be controlled and licensed.Access Points: access to the reservoir could be from suspended jetties frontingtourism properties, water taxi stops, emergency response facilities and designatedswimming areas.• All access points will have to be agreed by the hydropower authority and Municipalofficers responsible for reservoir development and use.• Activities permitted from each designated access point must be clearly identifiedon the license.• Safety measures specific to each access point must be clearly identified on thelicense.• The relevant reservoir authority must approve construction techniques and designof any access point.• Suspended jetties should be the preferred option. A suspended jetty consists of afixed extremity on shore, a suspended platform and a hinged ramp and floatingplatform on the reservoir. This arrangement permits the jetty to adjust to thevarying water levels of the reservoir. The arrangement also permits the owner toquickly remove the jetty from the reservoir in the event of a flood or extremeflows.Safety measures: The reservoir authority must recruit and train safety personnel topatrol the reservoir, control its use and rescue vessels or individuals in distress.3 Phibsoo Wildlife SanctuaryCONDITIONING:The zone described the current declared limits of the Phibsoo Wildlife Sanctuary.The Nature Conservation Division of the Department of Forests manages andadministers the Sanctuary.• Western limits of Phibsoo WS may need to be adjusted if Sunkosh reservoir levelsimpinge on its current declared boundaries.• PWS is a valuable natural asset that will contribute to long‐term economicdevelopment of the southern focal area.• Accessible form Lhamoizingka and Sarpang Town• The Regional airport at Gelephu and the proposed North‐South trunk road linkingLhamoizingka to Wangdue, Thimphu and the Eastern Dzongkhags will furtherenhance access to the site.Management Needs:• Prepare a comprehensive living and non‐living resource inventories.• Revise and update inventories, descriptions and physical locations of criticalhabitats.• Identify sensitive areas to be avoided by any future infrastructure and visitoraccess plan.Support to Local and Regional Economic Development:• The assessment proposes to define a tourism development zone (Zone 4) in anarea adjacent to the Sanctuary. As such, Sanctuary Management Plans should beadjusted to reflect a predicted increase in visitor numbers.150

• Access roads, entry gates, a visitor centre, a network of nature trails, wildlifeviewing stations, viewing blinds, field toilet facilities and others should bedesigned and entered into the revised Management Plan.• Elaborate and implement a waste management plan as and when required.• Anti‐poaching units will need to be reinforced and trained.• Sanctuary management personnel and anti‐poaching units must be supported byadequate equipment inventories.• The regulatory frameworks will need to be revised.• Elaborate a benefit sharing strategy and plan through participatory processesinvolving local populations.4 Tourism Development ZoneCONDITIONING: A tourism zone has been delineated East of the presentPunasangchu River and North of the Phibsoo Wildlife Sanctuary. The Zone is onelevated land and will be fronted by the Sunkosh reservoir once the Sunkosh 4000and Sunkosh Lift Dams have been constructed. The site has the potential to becomeBhutan’s premier tourism destination built on its unique mix of water‐based tourism,nature‐based tourism, proximity to cultural heritage sites and proximity to efficientair and road transport infrastructures. The proposed site is flood proof and itsconfiguration makes it safe from landslide induced reservoir surge.Immediate needs:• The proposed site should be delineated and secured for future development onceconstructions of the proposed Sunkosh Dams have been approved. Thedelineated site and proposed end‐use must be entered into the digital cadastre.o The site is subdivided into large development plots. Plots are registered in thecadastre.o Development principles are formulated.o Marketing material is prepared and made available to prospective investors.Marketing material makes reference to development conditionalityelaborated from the items detailed below.Development conditionality: The unique nature of this site must be protectedthrough a rigid adherence to development standards designed to protectprospective investors from ad‐hoc and inappropriate development.• The area should open to investors willing to develop substantial properties aimedat providing a unique nature based tourism product.o Properties will be aimed at high‐end market segments and will focus onhealth, wellness, wildlife and biodiversity, water‐based activity experiences,cultural tourism.o The properties will all be low‐rise and low density.o The architectural character of built structures should be unique to the siteBuildings should reflect the national architectural style but this should beadjusted to a humid forest environment.o All structures will have to employ the best available technologies to minimiseimpacts, increase environmental efficiency and maximise visitorcomfort/safety.o All structures must be certified earthquake resistant. Proximity of the site tothe Indian Plate subduction zone coupled to the inherent risk from reservoirinduced earthquakes obliges investors to design and construct to the strictest151

standards.o The largest structure on any plot will be the common facilities (reception,services, restaurants, kitchens and stores).o All properties will be permitted to construct private access to the SunkoshReservoir. This will include, jetties, boat ramps, artificial beaches, boatmoorings, fuelling station and others. Access points will be approved andlicensed by the relevant authorities and the reservoir management body.As Site Development is Initiated: Tourism developments/investments in the zoneare mapped and inventoried. Plots and title‐holders are entered into the nationaldigital cadastre.o The nature and type of tourism establishment is recorded on the cadastre.This information will include the number of rooms and beds, public facilities(dining rooms, conferencing, recreational services, waste managementsystems in place, annual occupancy, number of staff, number and type ofboats, number and type of vehicles, energy sources, water sources andothers.o Standards for internal infrastructures including: waste water treatment; solidwaste management; standards for discharged effluents; external lighting;standards for access roads and internal roads;o Spoils disposal. Spoils generated during construction stages of each tourismdevelopment shall be disposed of on site. Disposal shall include re‐use andrecycling, landscaping, contouring, and other non‐intrusive options. Disposalthat damages or threatens natural systems should be prohibited.o Fertilizer and pesticide use. The use of fertilizers and pesticides shall beregulated as per conditions applied to agricultural areas. Each tourismestablishment shall maintain a logbook detailing pesticide and fertilizer use.o Waste disposal. Solid waste shall not be incinerated on site. All solid wasteshall be disposed of in municipal waste disposal facilities in Lhamoizingka.• Wastewater treatment. Each property shall be equipped with a self‐containedcompact biological treatment system (Secondary treatment). Treated water shouldbe used for irrigation purposes.• No tourism structures shall be permitted in designated flood, surge or landsliderisk areas.Compatible Development and Land Use:• Market gardens• Low rise, low density residential areas (staff housing colonies);Incompatible Development:• Any type of industry or commercial activity adjacent to the designated area;• Garages and service facilities (adjacent trunk road)• Noise generating developments.5 Proposed North‐South Trunk RoadCONDITIONING:A new north‐south trunk road connecting Lhamoizingkha to Wangdue via Sunkoshbridge has been proposed by Process Participants. The proposed road would tracknorthwards along the Eastern bank of the Sunkosh reservoirs at a safe distance fromall possible flood and surge risks.152

The proposed trunk road replaces the planned Lhamoizingka to Daga road. ThePlanned road would eventually be declassified from a Highway to a Feeder road.The proposed road would also service the tourism area proposed as zone‐4.Road construction must be carried out to best environmental standards. Spoils shallbe re‐used as ballast for road construction or transported away from roadconstruction sites.NECS and Dzongkhag Officials will collaborate with the Roads Department to designthe most appropriate safeguard measures to minimise impacts due to roadconstruction.The proposed road will be subject to an EIA that will also describe social andenvironmental impact mitigation measures as well management and responseprocedures once the road has been commissioned.6 Lhamoizingka TownCONDITIONING:Zone‐6 describes the current footprint of Lhamoizingka Town. Recent information(available following completion of Process workshop‐2) suggests that the Ministry ofHome Affairs is currently assessing territorial options available for construction of aNew Town. As such, it is suggested that environmental management procedures forthe existing Town be upgraded as needed to effectively service its residentpopulation. Service improvement should focus on solid waste management,protection of potable water supplies, register and management of fertilizers andpesticides in adjacent agricultural areas and green areas within the town and aninventory of all current sources of pollution that could be mitigated throughenhanced management and control measures.7 Mixed Forest and Fruit Orchard ZoneCONDITIONING:The limits of the area should be entered into the digital cadastre.All existing plots must be entered into the cadastre and plot titles should be revisedand updated as necessary.The cadastre should register how the plot is being used, Volume and type of wastegenerated, on site waste treatment type, size and location of any structures on theplot and others.• The mixed forest and orchard zone should be treated in a manner similar tomixed agricultural zones (Zone‐8 below).• Forested areas should be managed to preserve forest cover while permittinglicensed harvesting to support local wood‐based small‐scale industries.• Local inhabitants could use Forest litter and fallen trees as fuel wood.Compatible development:Market gardening and certified organic fruit and produce.Small‐scale value addition wood industries.Incompatible development:Any type of emission and waste generating processing industry.Sanitary landfill.8 Mixed Agricultural Zone153

CONDITIONING:The mixed agriculture zones are located adjacent to Lhamoizingkha in an areabounded by the Thimphu River to the West and Punasangchu River to the East. Asecond area is located north of the proposed Special Economic Zone andIndustrial/Manufacturing Area on the western bank of the Thimphu River. The zonesare primarily agricultural but also contain settlements and individualresidential/farm building units.• Identified Agriculture Zones are critical to the social fabric of the area of influenceand are vital to the protection of rural landscapes of vital importance to expansionof a local tourism economy.All plots, properties or agricultural service enterprises in designated MixedAgricultural zones must be mapped and fully inventoried. Plots and title‐holdersentered to the national digital cadastre.o The limits of the zone are plotted on the cadastre. All properties within thezone are subject to comply to the same environmental and socio‐economicimpact management regulations.o Updated property titles complete with environmental managementconditions are delivered to each registered owner.o Available plots and abandoned plots are identified and made available toprospective interested parties.• A register of fertilizer use in the zone is established.o Title‐holders keep an updated log of fertilizer use.• A register of pesticide use in the zone is established.o Title‐holders keep a log of pesticide use.• Plot activity and waste profile is entered into an environment layer of the digitalcadastre information system.• Waste management infrastructure (relative to each plot) is entered into thecadastre information system (mains connection, septic tank, pit latrine, solid wastecollection, composting, burning, etc)• Discontinue the use of pit latrines and soak‐away pits for domestic sewage• Define limits to structural development including: height restrictions; architecturalstyle; colour; density; earthquake resistance; proximity to watercourses and GLOFrisk areas.• Describe a critical area needed for production of rice, cereals and produce for localconsumption. This is the area that cannot be compromised in favour ofdevelopment.o Identify measures to combat property speculation that could lead to areduction in designated mixed agricultural areas.o Consider introduction of compensatory fiscal instruments to reduce revenuegaps between agriculturalists and other commercial activities.Compatible Development:• Tourism: hotels, resorts, restaurants.• Farm and home stay facilities;• Tourism compatible small and medium scale enterprises (restaurants, shops,handicrafts, adventure sports, bicycle rental, nature trails, guiding services, etc.);• Expansion of villages and settlements;• Market gardening154

Incompatible Development:• Any activity that reduces the area available to agriculture• Heavy and Medium Industries;• Visible quarries and mines that detract from the scenic character of the area;• High rise (+4 floors) urban development or urban expansion;• High density urban development;• Sanitary landfill sites;Polluting activities. Any development likely to generate noxious or particulate airemissions or potential noxious wastewater discharges. These could include:industry, manufacturing, brick works, pulp and paper, vehicle maintenance, etc.)9 Lhamoizingka Flood Proof Urban Expansion ZoneCONDITIONING:The Government of Bhutan, Dagana Dzongkhag Officials and local inhabitants arecurrently considering possible locations for the New Lhamoizingka town. Severaloptions close to the border with India have been considered.The Prospective Strategic Assessment considered possible locations for a NewLhamoizingka Town. Sites were analysed relative to: The proposed location of futuretransport infrastructures; Locations of bridges across the Thimphu River and thePunasangchu River. In addition, the analysis considered the target area relative toflood risk due to a major GLOF event, or to a catastrophic failure of the Sunkosh4000 or Sunkosh Lift dams.The proposed site has been selected on the basis that it provides effective floodproofing against all flood events noted above. The site is elevated and is providedprotection by undeveloped areas that will tend to deflect floodwaters to the southand east.Relevant authorities should critically evaluate the proposed site.Management and mitigation measures that should be taken into account whenpreparing a design and development Plan for New Lhamoizingka Town include butare not limited to:Planning: Lhamoizingka New Town should be precision mapped within the areadesignated for its different stages of development. Plots, parcels, commercial areas,religious sites, services, parks and recreation areas, infrastructure layout and othersshould be clearly identified and entered into the digital cadastre.• The limits of future residential, commercial/services areas should be identified andplotted on the digital cadastre.• Residential areas should be separated from commercial and services areas bygreen areas or parks.• Urban development plans should be presented to the general public for commentand endorsement.• Plots can be made available once land within the development area has beensecured.o Private land should be converted to the use specified by the Plan for anygiven location. Owners should be provided with the opportunity to retain andsubdivide their land according to the proposed plan. Properties should bevalued and sold in an open and transparent market.o The New Lhamoizingka Town plan should detail environmental management155

infrastructure. This will include but not be limited to: Water distributioninfrastructure; wastewater collection infrastructure; solid waste collectionpoints; solid waste sorting facilities;o The plan will detail a zoning plan for commercial and service enterprises toensure that like activities are clustered. Social service facilities must beclustered in areas that are both easily accessible to town residents but alsodistant from any incompatible activity (noise generating activity would not beplaced adjacent to a school or hospital).o The New Lhamoizingka town will be mainstreamed to embed environmentaland socio‐economic safeguards designed to mitigate expected impacts.o The plan will be screened to test the level of mainstreaming by NECS andGNHC.The digital cadastre shall be updated as plots are assigned. The cadastre shall recordthe title holder, type of structure to be constructed, end use of the structure,number of people residing in or using the structure, volumes of waste and type ofwaste generated, water consumption, source of the water supply to the property,connection to mains sewer or details of other wastewater infrastructure, electricalconsumption, type of heating, etc.Environmental management conditionality will be the same as that described forother Towns in the area of influence (Khuruthang, Lobesa, Wangdue, Punakha andBajo). The purpose is not to introduce management variants, but to try tostandardise Municipal environmental management. It is evident that each city orTown will have specific needs according to the physical character of its surroundingsand the nature of its economic activities. But, in general, the principles presentedbelow are sound and should be treated as standard requirements of future urbandevelopment.Environmental Management:• Wastewater shall be channelled from all properties to a wastewater treatmentfacility adjacent to Lhamoizingka New Town.o Discharge of untreated wastewater into the Punasangchu River, the ThimphuRiver or any other watercourse must be strictly prohibited.o The use of septic tanks and soak pits should be discontinued.o Contaminated wastewater (hospital waste, hydrocarbon pollutedwastewaters, wastewater polluted by other chemical substances) shall besubject to specific treatment regimes to be elaborated by Dzongkhag officialsand approved by the NECS.o Waste oils and fuels (from garages and vehicle service facilities) shall betransported to collection points. Source and volume shall be recorded at thecollection point and revenues generated through reprocessing distributed(according to volume delivered) to respective sources.o The quality and character of wastewater generated in the commercial andservices zone will be monitored by Municipal Environment Officers,Dzongkhag Environment Officers and by NECS monitoring teams.o Provisions for pre‐treatment prior to discharge to main sewer lines must beestablished and enforced during the design approval and licensing process(EIA). NECS will ensure that agreed conditions have been met and are being156

maintained by the license holder.• Solid Waste/Municipal Waste: Waste shall be collected and treated in facilitiescommon to all settlements. Villages and towns in the vicinity of New LhamoizingkaTown. Consideration should be given to alternatives that would replace sanitarylandfill sites.o Lhamoizingka Municipality shall introduce obligatory waste sorting, re‐useand recycling practices to all households and businesses.o The Municipality shall require that all new investments/developments, likelyto generate significant volumes of waste, introduce demonstrable wasteminimisation practice to their operations.o Composting of organic waste could be viable treatment alternative butrequires efficient sorting at the source.Spoils management:• Prepare a spoils management plan. Spoils originating from building, road works,demolition, construction of electrical transmission infrastructure, or any otherengineering work shall be disposed of in agreed locations that do not interfere withany natural system. Dumping in micro‐valleys, watercourses or liable to slip shallprohibited.o Spoils re‐use and recycling procedures shall be developed and enforced.• Potable water supplies: water sources for Lhamoizingka New Town and adjacentsettlements should be mapped and entered into the national digital cadastre.Information in the cadastre should include: maximum and minimum flow; numberof plots supplied by any given source; treatment required (by source); regularlyupdated water quality data; water quality criteria that should not be exceeded(NECS National Standards for drinking water).o NECS, together with the relevant Dzongkhag authorities shall be responsiblefor regular monitoring and quality checks on drinking waters supplied toLhamoizingka residents• Emissions: emissions shall be regulated strictly according to established nationalstandards. The NECS shall make its staff available to Dzongkhag officers to providetraining (as needed) to Dzongkhag and Geog officialso Investments and developments likely to generate emissions shall not bepermitted in the Lhamoizingka urban zone unless they demonstrate verifiableand effective emission control mechanisms in their project/investmentproposalCompatible Developments:• Tourism services;• Small and medium scale non‐polluting enterprises• Commerce (shops, restaurants, financial services, taxi services, etc)• Managed market area.• Bus terminal• Future railway station• Professional vehicle repair facilities.Incompatible Developments:• Emission generating industries;• Any industry or manufacturing enterprise likely to generate toxic waste and/or dust157

• Mineral processing;• Abattoirs and commercial meat processing facilities.10 Special Economic Zone and Manufacturing AreaCONDITIONING:An area destined for development as a Special Economic Zone (SEZ) focussed onindustry and manufacturing businesses has been located on the Western Bank ofThimphu River adjacent to the international border with India.The area is slightly elevated and apparently protected from extreme flooding events.As an SEZ the site would be treated as a semi‐autonomous economic developmententity subjected to a tailored fiscal structure and free of customs and import duties(when exporting its products outside the national territory of Bhutan.The Lhamoizingka SEZ would be part of a series of such entities established atstrategic border locations in southern Bhutan.Development Planning: Site boundaries would be surveyed, mapped and enteredinto the digital cadastre.The site should then be subdivided and each plot entered into the cadastre togetherwith infrastructure plans (roads, electrical distribution, water supplies, wastewatercollection; on‐site waste water treatment facilities; telecommunication distributionnetwork; green areas; administration block and zones for specific industry types,services and others.Environmental Management:o Wastewater shall be channelled from all properties to a proposed (on‐site)wastewater treatment facility.o Discharge of untreated wastewater to the Thimphu River or any otherwatercourse must be strictly prohibited.o The use of septic tanks and soak pits shall not be allowed under anycircumstance. This exclusion also applies during construction phases(contractors will have to install temporary biological treatment systems)o Contaminated wastewater (hydrocarbon polluted wastewaters, wastewaterpolluted by other chemical substances or heavy metals) shall be pre‐treatedby the generating industry to standards acceptable for introduction to normalwastewater streams and treatment. Provisions for pre‐treatment prior todischarge to main sewer lines must be established and enforced during thedesign approval and licensing process (EIA). NECS will ensure that agreedconditions have been met and are being maintained by the license holder.The NECS will monitor compliance.o Waste oils and fuels (from garages and vehicle service facilities) shall betransported to collection points/transfer stations. Source and volume shall berecorded at the collection point and revenues generated throughreprocessing distributed (according to volume delivered) to respectivesources.o The quality and character of wastewater generated in industrial, commercialand services zone will be monitored by Municipal Environment Officers,Dzongkhag Environment Officers and by NECS monitoring teams.• Solid Waste/Municipal Waste: Waste shall be collected and treated in facilities158

servicing Lhamoizingka New Town and adjacent settlements. Consideration shouldbe given to alternatives to a common sanitary landfill site.o The SEZ administration shall introduce obligatory waste sorting, re‐use andrecycling practices to all investors. This requirement shall be included in eachlicense/contract.o The SEZ administration shall require that all new investments/developments,likely to generate significant volumes of waste, introduce demonstrablewaste minimisation practice to their operations.Spoils management:• The SEZ administration together with Dzongkhag and NECS Officials shall prepare aspoils management plan. Spoils originating from building, road works, demolition,construction of electrical transmission infrastructure, or any other engineeringwork shall be disposed of in agreed locations that do not interfere with any naturalsystem. Dumping in micro‐valleys, watercourses or any landslide prone area shallprohibited.o Spoils re‐use and recycling procedures shall be developed and enforced.• Water supplies: Water sources available to the SEZ shall be identified, mapped andentered into the national digital cadastre. Information in the cadastre shall include:maximum and minimum flow; number of plots supplied by any given source;treatment required (by source); regularly updated water quality data; water qualitycriteria that should not be exceeded (NECS National Standards for drinking water).o NECS, together with the relevant Dzongkhag authorities shall be responsiblefor regular monitoring and quality checks on waters supplied for humanconsumption or for use in a food processing industry.• Emissions: emissions shall be strictly regulated according to established nationalstandards. The NECS shall make its staff available to Dzongkhag officers to providetraining (as needed) to Dzongkhag and Geog officialso Investments and developments likely to generate emissions shall bepermitted only if they demonstrate verifiable emission control mechanism intheir project/investment proposal159

12.3 ANNEX‐3: LEGAL FRAMEWORK SUPPORTING THE STRATEGICASSESSMENTThe Strategic Assessment carried out to determine the wider development impactsexpected from the establishment of an Industrial Estate at Dhamdum and aproposed model Industrial Development in the Sibsoo area is founded on theConstitution and Laws of the Kingdom of Bhutan, commitments related toInternational Conventions to which Bhutan has acceded and Sectoral Acts andRegulations.The principal legal instruments are described below.The Constitution of the Kingdom of BhutanThe Constitution of the Kingdom of Bhutan, which was formally adopted in July2008, features environmental conservation as a constitutional mandate. Article 5 ofthe Constitution stresses that:“Every Bhutanese is a trustee of the Kingdom’s natural resources andenvironment for the benefit of the present and future generations and it is thefundamental duty of every citizen to contribute to the protection of the naturalenvironment, conservation of the rich biodiversity of Bhutan and prevention ofall forms of ecological degradation including noise, visual and physical pollutionthrough the adoption and support of environment friendly practices andpolicies.”The Article mandates the government to protect, conserve and improve the pristineenvironment and safeguard the biodiversity of the country; prevent pollution andecological degradation; secure ecologically balanced sustainable development; andensure a safe and healthy environment. It further stipulates that the governmentshall maintain at least 60 percent of the country under forest cover for all time andthe Parliament may enact environmental legislation to ensure sustainable use ofnatural resources, intergenerational equity and the sovereignty of the State over itsown biological resources.Article 22 of the Constitution is dedicated to Local Governments. The first and fourthparagraphs of this Article state the following visionary, clear and supportivestatements on Local Governments:“Power and authority shall be decentralized and devolved to elected LocalGovernments to facilitate the direct participation of the people in thedevelopment and management of their own social, economic andenvironmental well being.160

The objectives of Local Government shall be to: (a) provide democratic andaccountable government for local communities; (b) ensure the provision ofservices to communities in a sustainable manner; (c) encourage theinvolvement of communities and community organizations in matters oflocal governance; and (d) discharge any other responsibilities as maybeprescribed by law made by Parliament.”With regards to local level capacity, the Article stipulates that local governmentsshall be supported by the central government in the development of administrative,technical and managerial capacities and structures, which are responsive,transparent, and accountable (Section 18a).Bhutan 2020:The Bhutanese development philosophy of ‘Gross National Happiness’ advocates amulti‐dimensional development approach that seeks to maintain harmony andbalance between economic, emotional and environmental well‐being of the peopleand nation. Bhutan 2020, the country’s vision document to maximize GNH, outlineshuman development, cultural preservation, balanced and equitable economicdevelopment, good governance, and environmental sustainability as the maindevelopment objectives. These objectives are elucidated with considerable foresightin the following Bhutan 2020 statements:“(Happiness) is to be achieved within the framework of traditional values andethics, and through concerted efforts to achieve sustainable improvements inthe standard of living, the quality of life, and levels of well‐being and welfare.Future development that not only recognizes, promotes and instils anappreciation and awareness of the nation’s rich cultural heritage and itscontinued value as a rich fund of social philosophy, but also its role inmeeting spiritual and emotional needs, in maintaining our distinctiveidentity, and in cushioning us from some of the negative impacts ofmodernization.The benefits of development are (to be) shared equitably between differentincome groups and regions and in ways that promote social harmony,stability and unity and contribute to the development of a just andcompassionate society.Development of our institutions, human resources and systems in ways thatenable us to reduce our dependence on others, to manage an increasinglycomplex process of development, and to enlarge opportunities for people atall levels to participate more fully and effectively in decisions that have abearing on their lives and livelihoods and the future of their families,communities and the nation.The (development) choices made in response to the many challenges thatconfront the nation embody the principle of environmental sustainability and161

do not impair the biological productivity and diversity of the naturalenvironment.”Tenth Five‐Year Plan (2008‐2012):The Tenth Five Year Plan (FYP) provides the development framework for the financialyears 2008/09 to 2012/13. The central objective of the Tenth FYP is povertyreduction, with the emphasis to reduce the proportion of the population livingbelow the national poverty line from 23.1 percent to about 15 percent. The TenthFYP can be viewed as Bhutan’s poverty reduction strategy. It stresses pro‐poor socialand economic development approaches such as expanding infrastructure and roadconnectivity in rural areas where majority of the country’s poor live, andstrengthening of agricultural production and productivity that will help raise ruralincomes and improve food security.Six key strategies have been identified to achieve poverty reduction in the TenthFYP. These are: (1) vitalizing industry; (2) national spatial planning (includingsustainable urban development and housing); (3) synergizing integrated rural‐urbandevelopment; (4) expanding strategic infrastructure; (5) investing in human capital;and (6) fostering an enabling environment through good governance.The Tenth FYP addresses environment as a crosscutting theme. It recognizes thatprotecting and conserving the environment will require greater attention thanbefore as the accelerating pace of socio‐economic development accompanied byincreased infrastructure development, urbanization, industrialization, andconsumption patterns is expected to create additional stress on the naturalenvironment. At the same time, it emphasizes the need to use the country’senvironmental resources as a development asset for economic growth and povertyreduction within the limits of sustainability.The Tenth FYP identifies clear national development and investment priorities.Within these, the document identifies both hydropower development on thePunasangchu River Basin and the development of an Industrial Estate at Dhamdum,Samtse Dzongkhag, as priorities to be either initiated or completed during the periodof the Tenth Plan.Bhutanese laws that provide for environmental management:There are several laws in the country that provide for environmental management.The key ones are outlined below:National Environment Protection Act 2007: The Act is an umbrella law, whichrequires all other laws and regulations governing the use of land, water, forests,minerals and other natural resources to be consistent with it. It specifically laysdown principles and directives for the protection of environmental quality and themaintenance of forest, biodiversity and ecosystem integrity.162

Environmental Assessment Act 2000: The Act establishes procedures for theassessment of potential effects of strategic plans, policies, programmes, and projectson the environment, and for the determination of policies and measures to reducepotential adverse effects and promote environmental benefits. The Act requires theRoyal Government of Bhutan to ensure that environmental concerns are fully takeninto account when formulating, renewing, modifying and implementing any policy,plan or programme.Regulation Environment Impact Assessment and Strategic EnvironmentalAssessment: The Regulation, issued by the National Environment Commission,details the responsibilities and procedures for implementation of EnvironmentalAssessment and clearance procedures of projects as required by the NationalEnvironmental Protection Act of 2000.The Regulation also refers to the need to introduce Strategic EnvironmentalAssessment procedures to ensure that the environmental and social impactsexpected from Plans, Policies and Programmes are considered and mitigated prior tofinalisation of the PPP formulation process. The regulation furthermore instructs thatthe SEA process shall be a participatory and consultative process.Guidelines for Mainstreaming Environment in Policies and Programmes: TheNational Environment Commission and Gross National Happiness Commission haveproduced an interim set of “Guidelines for Mainstreaming Environment in Policiesand Programmes”. The Draft Guidelines have been distributed for comment to allrelevant stakeholders and will now be consolidated to similar guidelines aimed atmainstreaming environment for pro‐poor growth and development in Policies,Strategies and Plans of the Government of Bhutan.The consolidated guidance document has not yet been prepared. It is foreseen thatthe current Strategic Assessment Process detailed in this Report will contributesignificantly to the consolidated guidance document.Furthermore, it is envisaged that the process outcome of this Report and theconsolidated guidance document will be integral to the Guidance documentsdelivered to Local Government as part of the National Decentralisation Process.Forest and Nature Conservation Act 1995: This law provides for the protectionand sustainable use of forests, wildlife and related natural resources of Bhutan, andcovers sustainable forest management, protection of government reserved forests,social and community forestry, transport and trade of forestry produce, protectedareas, wildlife conservation, soil and water conservation, and forest fire prevention.Mines and Mineral Management Act 1995: This Act recognizes the preservation,protection and setting of environmental standards and conservation of naturalresources as critical for sustainable mining practices, and stipulates variousprocedures and requirements to ensure that mining projects are planned and carriedout with full consideration of environmental management needs.163

Pesticides Act 2000: This legislation was enacted with the objective to ensure thatintegrated pest management is pursued, thereby limiting the use of pesticides as alast resort; assuring that appropriate types and quality of pesticides are introducedinto the country; and that pesticides are effective when used as recommendedwhilst deleterious effects on human beings and the environment are minimized.Biodiversity Act of Bhutan 2003: This law asserts the sovereignty of the countryover its biodiversity resources and lays down the conditions for the grant of accessto biodiversity resources, benefit sharing, and protection, and describes variousrights, offences and penalties related to biodiversity use.Road Act 2004: The Act accords the Department of Roads the mandate to adoptand promote environment friendly practices and techniques in the implementationof road activities. It requires that all road construction and maintenance worksconform to environmental considerations, geological stability considerations andpreservation of agricultural land.Waste Prevention and Management Act 2009: This is the most recentenvironmental law ratified by the Parliament. The purpose of the Act is to protectand sustain human health through protection of the environment by reducing thegeneration of waste, promoting the segregation, reuse and recycling of wastes,disposal of waste in an environmentally sound manner, and effective functioningand coordination among implementing agencies.The Water Act (draft 2009): The Act is currently under final revision. The purposeof the Act is to ensure that water resources are protected, used, developed,conserved and managed in an economically efficient, socially equitable, andenvironmentally sustainable manner.Local Governments’ Act of the Kingdom of Bhutan, 2009 (LG Act)The LG Act is anticipated to become effective during the second half of 2009 and willthus provide the overall legal framework for local governance to which SESP and PEIPhase 2 will be aligned. Local government elections are planned to take place duringthe fourth quarter of 2009 – resulting in elected councils being established asfollows:• Dzongkhag Tshogdu (DT)• Gewog Tshogde (GT)• Thromde Tshogde (TT)• Thromde Yenlag Tshogde (TYT)The Dzongkhag Tshogdu will – in its area of jurisdiction – comprise two electedrepresentatives from each Gewog (Gup and Mangmi), one elected representativefrom the Dzongkhag Thromde, and one elected representative from the Dzongkhag164

Yenlag Thromdes. The LG Act provides increased powers and expanded functions tothe local governments, which among others include: promotion of holistic andintegrated area‐based development/ land use planning; conservation andenhancement of the environment; regulation of natural resource uses; regulation ofpollution; and organisation of relief measures in case of natural disasters andemergencies. The local government functions are operationalised through five‐yearand annual plans and budgets, which respectively are accumulated in RGoB’s fiveyearand annual plans and budgets. The Dzongkhag Tshogdu will monitor andevaluate the Gewogs’ implementation performance, whereas the Thromdes willconduct their own monitoring and evaluation.The Local Government Act, which is designed enable effective decentralisation,provides a unique platform and opportunity to introduce operational GNHmainstreaming requirements to facilitate and/or inform: The preparation of Five‐Year and annual plans; the identification of consensus based development priorities;the preparation of budgets; introduction of performance based monitoring of theeffectiveness of development actions/investments; and others.International Conventions ratified by the Kingdom of Bhutan:In addition to National Legislation, Bhutan has become Party to a number ofConventions of relevance to both the Strategic Assessment and developmentchoices that will be made by the Government in the area of influence considered inby this assessment. The Conventions are described in general terms below:United Nations Convention on Biological Diversity (CBD): The Convention onBiological Diversity was signed at the Rio “Earth Summit” of 1992. It included twobinding agreements, the Convention on Climate Change, which targets industrial andother emissions of greenhouse gases such as carbon dioxide, and the Convention onBiological Diversity, the first global agreement on the conservation and sustainableuse of biological diversity.The Convention has three main goals:• The conservation of biodiversity,• Sustainable use of the components of biodiversity, and• Sharing the benefits arising from the commercial and other utilization of geneticresources in a fair and equitable wayThe Convention recognizes that the conservation of biological diversity is "a commonconcern of humankind" and is an integral part of the development process. Theagreement covers all ecosystems, species, and genetic resources. It links traditionalconservation efforts to the economic goal of using biological resources sustainably. Itsets principles for the fair and equitable sharing of the benefits arising from the useof genetic resources, notably those destined for commercial use. It also covers therapidly expanding field of biotechnology, addressing technology development andtransfer, benefit sharing and bio‐safety. Importantly, the Convention is legallybinding.165

The Kingdom of Bhutan acceded to the Convention on Biological Diversity in 1995.Cartagena Protocol on Biosafety to the Convention on Biological Diversity: TheCartagena Protocol on Bio‐safety is an international treaty governing the movementsof living modified organisms (LMO’s) resulting from modern biotechnology from onecountry to another. It was adopted on 29 January 2000 as a supplementaryagreement to the Convention on Biological Diversity and entered into force on 11September 2003.The Protocol’s aim is to protect biological diversity from the potential risks posed byLMO’s and establishes an advance informed agreement procedure to ensure thatcountries are able to make informed decisions prior to importing or introducingLMO’s into their territory. The Protocol adopts the precautionary approach detailedin Principle 15 of the Convention on Biological Diversity.The Kingdom of Bhutan Acceded to the Cartagena Protocol August 2002.United Nations Framework Convention on Climate Change (UNFCCC): The UnitedNations Framework Convention on Climate Change sets an overall framework forintergovernmental efforts to tackle the challenge posed by climate change. Itrecognizes that the climate system is a shared resource whose stability can beaffected by industrial and other emissions of carbon dioxide and other greenhousegases. Under the Convention, governments:• Gather and share information on greenhouse gas emissions, national policies andbest practices• Launch national strategies for addressing greenhouse gas emissions and adaptingto expected impacts, including the provision of financial and technological supportto developing countries• Cooperate in preparing for adaptation to the impacts of climate changeThe Convention entered into force on 21 March 1994. The Kingdom of BhutanAcceded to the Convention in 1995The Kyoto Protocol: Is an international agreement linked to the United NationsFramework Convention on Climate Change. It was adopted in Kyoto, Japan, on 11December 1997 and entered into force on 16 February 2005. The Protocol setsbinding targets for 37 industrialized countries and the European community forreducing greenhouse gas (GHG) emissions. The Protocol lapses in 2012 and itsbinding replacement to the Protocol remains elusive at present.The Kingdom of Bhutan Acceded to the Kyoto Protocol in 2002 and became amember in 2005.166

United Nations Convention to Combat Desertification: The Convention to CombatDesertification was adopted on 17 June 1994 and entered into force on 26December 1996. The kingdom of Bhutan Acceded to the Convention in 2004.The principal purpose of the Convention is "to combat desertification and mitigatethe effects of drought in countries experiencing serious drought and/ordesertification" To achieve this goal, the Convention calls for action involvinginternational cooperation and a partnership approach. It focuses on improving landproductivity, rehabilitation of land, conservation and sustainable management ofland and water resources. Such actions are intended to prevent the long‐termconsequences of desertification, including mass migration, species loss, climatechange and the need for emergency assistance to populations in crisis.Basel Convention on the Control of Trans‐boundary Movements of HazardousWastes and their Disposal: The Basel Convention is an International treaty designedto reduce the movements of hazardous waste between nations and, moreimportantly, to prevent the transfer of hazardous waste from developed to lessdeveloped countries (LDC’s). The Convention other purpose is to minimise theamount and toxicity of wastes generated and to ensure that their management iscarried out close to the source of generation and is environmentally sound.The Convention entered into force in 1992 and the Kingdom of Bhutan acceded in2004.Vienna Convention for the Protection of the Ozone Layer: The Vienna Conventionestablishes a framework for international cooperation aimed at the development ofpolicies and the formulation of suitable measures to protect human health and theenvironment against adverse effects resulting or likely to result from humanactivities, which modify or are likely to modify the ozone layer (art. 2[1][2]).Specific obligations relating to the control and elimination of ozone‐depletingsubstances (ODS) are contained in the Montreal Protocol on Substances that Depletethe Ozone Layer.The Kingdom of Bhutan Acceded to and ratified the Convention in 2004.Montreal Protocol on Substances that Deplete the Ozone Layer: This Protocol to theVienna Convention for the Protection of the Ozone Layer is an international treatydesigned to protect the ozone layer through the phasing out of production ofsubstances identified as the likely causative agents of ozone depletion. The principalcausative agents are halogenated hydrocarbons containing either chlorine orbromine.The Protocol entered into force on the first of January 1989 and Bhutan Acceded tothe Protocol in 2004.167

12.4 ANNEX‐4: LIST OF PARTICIPANTS (WORKSHOP‐1 AND 2)S.No Name Designation, Organization Workshop‐1 Workshop‐2 Email Address1 Tandin Tshewang ADAO, Punakha tansee_09@yahoo.com2 Kaka ADzFO, Punakha kaka_tshering@druknet.bt3 Dorji Gyeltshen AFO, Tsirang4 Namgyel Dorji LRO, Tsirang5 Kuenzang LRO, Punakha6 Tawchu DYT Chair., Punakha7 Sahadev Thapa DCPO, Wangdue sthapa@druknet.bt8 Sarita Gurung GAO, Daga, Wangdue saritaleo63@yahoo.com9 Inchu Dolkar GAO, Gaselo, Wangdue inchudolkar@hotmail.com10 Kuenzang Wangmo GAO,Guma, Punakha kuenzawangmo@yahoo.com11 Rebecca Pradhan Ecologist, RSPN Rebecca@druknet.bt12 Pema Lakshey GAO, Sarpang pemshet@yahoo.com13 Lobzang Dendup GAO, Sarpang ldendup@yahoo.com14 Ugyen Samdrup DYT Secretary, Sarpang yensam25@gmail.com15 Tashi Dendup Ranger, Wangdue denduptashi_moa@yahoo.com16 Kinley Tshering Ranger, Wangdue toebgyemkha@yahoo.com17 Pema Rinzin Ranger, Wangdue pema_rnzn@yahoo.com18 Tshering Wangdi Forest Ranger twangdi38@yahoo.com19 Sonam ADAO, Wangdue namsowangdi@yahoo.com20 Tikaram Thapa AEO, Dagana21 Tshering Choden DEO, Officer,Wangdue tsheringchoden@nec.gov.bt22 Tshering Penjor APO,GNH Commission tsheringp@ghnc.gov.bt23 Jigme Choki Dz Env Officer,Punakha jimiechoki@gmail.com24 Ugyen Tshomo Ghaley APO, Punakha ughaley@yahoo.com

25 Ngawang Dorji Dz Env Officer, Chukha ngawa123@yahoo.com26 Dorji Tshering Chief Survey Engineer,National Land27 Sonam Dhargay Sr. GIS Officer, Nationaldhargay@gmail.comLand28 S. K Bhujel AE, Tsirang29 Sonam DAO, Tsirang30 Sonam Rabten GAO, Dagana ragu_rabten@hotmail.com31 Lhawang Dorji Chirman, Dagana32 Kelzang Tenzin LRO,Dagana33 Sonam Tshering DE, Dagana34 Sachin Limbu Dz. Env officer,Dagana sachin.limbu@gmail.com35 Sonam Tobgay Dz. Forest officer,Dagana tobgays76@yahoo.com36 Chewang Gyeltshen ADAO,Gasa chewanggyeltshen@yahoo.com37 Karma P.Dorji NPM, MOEA38 Abilal Baskota CFO, Wangdue abilalbas@gmail.com39 Sonam Desel Env Officer, MOWHS sonamdesel@gmail.com40 Chencho Dorji DEO, Gasa chencho_dorji@hotmail.com41 Tashi Dendup DEO, Tsirang tas_dens@hotmail.com42 Kinga Wangmo APO, Chukha kingaeco@hotmail.com43 Sherab Chophel GAO, Gasa chophelsherab_@yahoo.com44 Yeshey DYT Chairman,Tsirang45 Nima Dorji Gyeltshen GAO,Rangthangling,Tsirang46 Ngawang Norbu GAO,Barshong,Tsirang47 Thinley Dorji NECS thinleydorji@nec.gov.bt48 Tenzin Khorlo NECS tkhorloo@nec.gov.bt49 Tshewang Dorji NECS dorji.tshewang@nec.gov.bt169

50 Tshewang Chaskar NECS tchaskar@yahoo.com51 Kumbo Dukpa NECS kdukpa@nec.gov.bt52 Karma C. Nyedrup NECS kc@nec.gov.bt53 Pema Lhazom NECS54 Sonam Dargay NECS55 K.B Rai DCPO,Wangdue57 Ngawang Chophel Planning, Tsirang58 Sangay Dorji DzFO,Gasa59 Galey Dorji ADFO,T/phu60 Sonam Dorji DYT,Thimphu61 Tshering Gyeltshen EE,DOR62 Passang Engineer,DOR63 Sonam Tobgay DzFO,Dagana64 Tashi Gyeltshen Dy EE65 Yeshey DYT,Tsirang66 Tenzin Wangchuk ICTO,Tsirang67 Leki SrFR,Wangdue68 Kezang Uden GAO,Tsirang69 Needup Gyeltshen GAO,Sarpang70 Langa Dorji DEO,Sarpang71 Dorji Tenzin GAO,Gasa29 PARTICIPANTS ATTENDED BOTHTOTAL PARTICIPANTS 54 45 WORKSHOPS AND HAVE BEENEXPOSED TO THE FULL PROCESS170

12.5 ANNEX‐5: THE (ZERO OPTION) SCENARIOSTATE AT TIME‐0 (2009)GROUP‐1 GROUP‐2 GROUP‐3 GROUP‐4 GROUP‐5Economic development &financial servicesExistence of natural resources(minerals deposits, forestproducts, NWFP etc.), privatesector at infant stage, few/noFDI. Existing small industriesusing out dated technologies,low profit, proprietor ownbusiness & access to market islimited.Limited financial institutions,monopoly & high interest rateand non‐existence in rural areas.Transport and InfrastructureRoad network along the basinnarrow and not infiltratedlatitudinal, traffic flow ismoderate with less accident,non‐existence of mass urbantransport system & frequentroadblocks. Most remote areasnot accessible by road, mode oftransport is only road.Strategic InfrastructureInadequate infrastructure withlow standards/quality, low lcoverage, pressure on theexisting infrastructure, nonexistenceof infrastructures likeBRIEF DESCRIPTION OF THE SCENARIOEconomic development andfinancial servicesSubsistence farming prevailing.Seasonal tourism.Cottage industries.Sand and stone quarries.Limited financial institutions.Transport and InfrastructureAdequate transport facilities(expensive).Road connectivity limited tomajor towns.Strategic InfrastructureSufficient basic facilities(education, VTIs, health).Partial coverage oftelecommunication & e‐communication facilities.80% electrified.Emerging urbanization.Tourism and RecreationSeasonal tourism.Shortage of recreationfacilities.Natural AssetsExistence of natural resources(National Parks, timber, river,flora, fauna).Existence of undisturbed1. Economic developmentThe entire area of interest is at alow level of economicdevelopment.Mainly agricultural and livestockactivities. Paddy, cash crops(apple, orange, and cardamom)in the valleys. Yak‐herding andcattle rearing are also commonon the present slopes.A few numbers of stone andsand quarries is supplyingrequirements of minorconstruction and to feed thesmall factories.The tourist facilities are not fullydeveloped, mainly catering totransit type of tourist duringpeak season. Emerging hotelindustry with improvingfacilities. One high‐end hotel:Aman Kora Punakha.Chukha,Tala and Basochhuhydro power is operationalgenerating 60MW power. Twoindustrial estates in Pasakha,one in P/ling, Wood‐basedindusty in Darla/Gedu. Localtextile industry in Chukha.Foreign trade is mainly throughEconomic and FinancialservicesThe trade limits to themarketing of surplus farmproducts from the farm to theurban centres and basicnecessity items from urbancentres to the farm. Thereexist two stone quarries andtwo sand and stone factories.Many business ventures likeshops, hotels, automobileworkshops, gas stations are inplaced.The financial needs are cateredby BoB and BNB branch officesin the focus areas. The BDFCcaters the financial needs ofrural communityTransport and InfrastructureThere are adequateinfrastructures and facilitieslike roads, communication,schools, health centres andtraining institutes. The modeof transport is only road waysand the roads are maintainedfrequently by the Departmentof Roads. . The WangdueECONOMIC DEVELOPMENTAND FINANCIAL SERVICES:‐ Currently DzongkhagAdministration and theCentral Government cater toall the developmentactivities in the area.‐No Financial Institutions‐ Existing BDFC‐ Mining in Dagana(quartzite, talc), Wangdue‐ Stone Quarrying‐Logging‐Army Welfare Project(Distillery)‐ Trade of cordycepsTRANSPORT:‐Existing Highways, Districtroads and farms roads‐Main form of transport issurface transport. Mostpeople still walk to schools,villages, office, medicalcentres, market, governmentoffices etc.INFRASTRUCTURE:- Pocket settlements anddeclared satellite towns,District Towns- Existing Government

airports/helipads, recreationalfacilities etc.Tourism and RecreationPotential for tourism (hiking,mountain biking, river rifting,bird watching, farm house stayetc), however tourist arrival arelow and are mostly culturalbased and there are limitedrecreational activities.Natural AssetsEnvironment status still pristine,natural habitats are undisturbedand intact, no watershedmanagement schemes, bufferzone for critical areas except forbiological corridors in protectedareas. The quarrying is carriedout randomly. Forest resourcesare able to meet publicdemands. Prevalence ofunsustainable harvest ofNWFP’sCultural AssetsFully intact but prone tovandalism, theft and damage bynatural hazards.Population, Employment andSocial ServicesLow population density, moreilliterate & employment issue ismanageable.Free basic social servicesprovided (health, educationetc.) Availing service servicestakes longer time.Climate and External Naturalpristine forest.Existence of protected areas.Numerous catchment areas.Cultural assetsMagnificent historicalmonuments.Numerous ancient templesand religious site.Population, Employment andSocial servicesLow population density in thearea.High rate of jobless schooldropouts.Adequate number of healthcentres and schools.Insufficient safe drinkingwater.No proper waste managementsystem.Climatic and external naturalfactorsUnpredictable weatherpatterns.Emerging issue of GLOF.Changing of cropping pattern.Agriculture and LandSubsistence farming withpartial mechanization.Scattered and limited landholdings.Legal, regional andinternational issuesStrict legal system in place.Insurgent militants.Sector and national policies,generation of revuenue throughexport of power to India fromDGPC (CHPC, BHPC, THPC).Some agricultural products esp.Orange, apple are exported toBangladesh and India.2. Strategic infrastructureApprox. 80% educational facilitycovered. Approx. 70% healthcoverage is achieved, with 30%remaining to be developed.Mobile coverage over 90% ofthe area. Electricity coveragehas reached less than 20%. Roadcoverage has reached almost in50% of the area of interest, butmany of the roads are notfunctional in rainy season.Bridge development needs totake place all over thedzongkhags of basin‐II. Plannedairport in Gelephu. Properlyplanned townships exist atKhuruthang, Tsirang, Gelephu.Bajothangtownshipconstruction has started. Majorbanks (BoB, BNB, BDFC)branches are estd. in manyplaces and only Gasa does nothave branch. GLOF Earlywarning system is alreadystarted implementation but noearthquake prediction orwarning system.3. Social servicesHuman resources developmentthrough improving quality ofbridge on East‐West NationalHighway connects the westernand eastern regions of Bhutanand there is proposal to widenEast‐West High Ways. Themodes of transport includepony‐porter, buses and taxiand goods are transportedmainly by trucks.Strategic InfrastructureThe education needs arecatered by CPS, LSS, MSS, HSSand private school. There areadequate health facilities tomeet the day to day healthcare of the people. The healthservices are catered by DistrictHospitals, BHUs and ORCs.Except for few pockets, thebasin is accessible by B‐mobileand Tashi cell. Few remoteareas are connected by solarphones. There exists at leastone urban centre in all thedistricts within the basin. Thedevelopment of Bajothangtownship in WangduePhodrang on‐going.Tourism and RecreationFew hotels and Resort werebuilt to cater to tourism. TheDzongs, lhakhangs, hot‐springsare the main tourist attraction.Tourists also visit the placeduring Domchoes and Tsechushosted in the Dzongs. Thenatural landscape is used byInstitutions, schools,BHUs and Hospitals- Cottage industries- Small hotelsBRIDGES:- Highway Bridges (approx.5 nos), DzongkhagBridges- Suspension BridgesSRATEGICINFRASTRUCTURES:- Basachu Hydro Power- Darachu Mini Hyropower,Power houseTOURISMANDRECREATION:- Tourists destinations(Gasa, Punakha,Gangtey, WangdueDzong)- Waters sports (rafting) inWangdue, Dagana &Punakha- Bird watching in Wagdue& Punakha- Camping and picnic spots- Tsechus- Eco‐trailNATURAL ASSETS:- JDNP, JSWNP, CentennialPark, Royal Botanical &Recreational Park, DikchuNP, Phipsoo Wild LifeSanctuary- Biodiversity/flora/fauna(blue poppy, red panda,Black necked crane, white172

FactorsHigh risk from GLOF, vulnerableto epidemics, disaster copingmechanisms limitedAgriculture and LandThought limited arable land,fully utilized foragriculture/subsistence farming(once a year), land degradation.There is high dependency onagriculture (rural economy).Legal, regional andInternational IssuesLocal/international conflict overrights to natural assets,manageable anti‐social issuesSector and National Policies,Plans and ProjectsConflicting Policies/legislationsplans and projectsGross National Happiness.Poverty alleviation.Sustainable development.Decentralization.Constitutional Monarchy.education, non‐formaleducation and vocationaltraining institute.The present health services isnot upto the standard required.There is shortage of doctors,nurses, medicines andequipment. Drinking watersupply coverage is available in90% of the dzongkhags. Still afew sources of water have driedup and new sources have to befound.Agricultural extension servicesare available in all gewogs butneed to be extended to all thechiwogs in order to promoteagricultural productivity.Forestry services needed to beextended upto the chiwog level.Postal services only available atdzongkhag and dungkhag levelbut not at gewog and chiwoglevel.Waste disposal is a not properlydone. No systematic collectionof waste even in urban areas.There are a few land‐fill siteswhich have to be improved insanitary standards, and thenumbers should be increased inother areas.Public transport servicesavailable in approx. 40% of thearea. Taxis and bus services areentirely privatised.Financial credit services,the picnic goers as picnic spot.The basin is also a attraction toshot Bhutanese movies.Natural AssetsThe basin is the habitat of wildlife like the endangered birdwhite –bellied heron, Goldenlangur and Takin and aquaticfauna like Migratory fish‐ Katleand Mashir. The basin is also asource of timber, sand andboulders and non‐wood forestproducts like mushroom, fernsand wild asparagus.The buffer zone of JDWNP alsofalls within the basin.Cultural AssetsFour historical dzongs arelocated in the Basin namelyGasa, Punakha, Wangdue andDagana Dzongs. In addition,one new Dzong meant only forAdministrative function isconstructed in Tsirang. Apartfrom Dzongs, many historicalmonuments like lhakhangs,gomdheys, shedras andchortens exist in the basin.Population, employment andsocial serviceOn an average 20% of thepopulation in every focus areaare settled within 0.5 kmradius from the river basin.Majority of the populationdepend on agriculture assource of livelihoods. Otherbellied heron, palas eagle,golden masher, Bengaltigers, etc.)- Punatsangchu- Hot springsCULTURAL ASSETS:- Dzongs, Lhakhags,monasteries, chortens- Tshechus- Religious ceremonies- Nyes (holy sites)POPULATION,EMPLOYMENT AND SOCIALSERVICES- Population as per thecensus 2005. Have lowpopulation density.Currently, the populationis manageable and insome areas still havepastoral/indigenouscommunity with uniquecultural and occupationalidentity.- Dominated by agrarianeconomy- Most people in theDzongkhags go toThimphu for employment(Rural – Urban Migration)- The jobs in Dzongkhagsnot seen to be attractive.Most people go to theCapital for medical,market and other servicesthat are not provided forin the Dzongkhags.173

farmer’s banking, mobilebanking should be madeavailable in the gewogs as it isonly available in dzongkag levelat present.Employment opportunities aremainly in small businesscontractors engaged inconstruction industry. Majorityof people are working on smallself‐owned farms.4. Natural assets/biodiversityThis area has good forestcoverage above approx. 70% ofthe area. None Wood Forestproducts like mushrooms, ferns,cane, cordyceps, medicinalherbs, should be harvested onsustainable basis. Commercialtimber extraction is carried outscientifically in designatedForest Management Units, forrural construction requirementscan be met from nearby forestto settlements.Critically endangered (

degradataion and therefore noland magnament campaignshave been carried out.There is no demarcation ofbuffer zones for any purposebut however there is strictenforcement of the rules andregulations of the country withregard to the protection of theforest (only forest line for forestfire control is cut).5. Climatic issues & risksGLOF is a serious climate‐changeinduced risk for the basin‐IIregion. Out of over 600identified glaciers around 25 areconsidered dangerous. An earlywarning system has been put inplace starting from Lunanaglacier to Sunkosh.The glaciers estimated to beretreating at rate of 25‐30meters annually in theHimalayan region.In last five years, there has beenperceptible rise in temperatureacross the region as well assome extreme rainfall events.6. Law and orderThe northern border is closedand there is regular BorderDistrict Coordination meetings(BDCM) to discuss southerntrans‐boundary issues andsecurity issues with the Indiancounterparts.There is significant number ofcenters like Bajo andKuruthang.Climate and External NaturalFactorsDue to global warming andgreen house effect the meltingrates of glacial have increasedand snow fall reduced anderratic rainfall experienced inthe recent years effectingvegetations growth and theiryield. Basin II falls underidentified high risk areas to beaffected by GLOF from lunana.Mitigation works are going onat the site at Lunana and at thesame time awarenesscampaigns.Agriculture and LandSubsistence farming – wet land& dry land production(production of paddy, rice,millets )Semi‐commercial production(oranges, vegetables,livestock). Farm roads arebeing constructed to provideaccess to the far flung villagesto market their farm produces.The land managementpractices plantation and bioengineeringare confined toprotect agriculture land. Theriver training works andembankment were carried outto protect urban centre andagriculture land.- Using semi mechanizedfarming technique- Growth of wild pests likewild boars, wolves,elephants etc. due tohuman encroachment onthe natural habitat (SevereHuman wildlife conflicts).- Land degradationincreasing- Increasing Land usechange in the projectedareas (changing the landpattern)- Increasing landfragmentationSECTOR AND NATIONALPOLICIES, PLANS ANDPROJECTS:- 10 th Five year Plans- Construction of GasaDistrict Road- Construction of farmroads, District Roads- Rural Waters SupplySchemes- Rural Electrificationprojects- Rural School expansion- Preparation ofPunatsangchu Project- Preparation Daga ChuHydro Power Project.- Plan for development ofrailway and airport inSarpang175

legal foreign workers in theconstruction industry, roadconstruction and other smallindustries.Some cultural dilution isgradually increasing or takingplace.7. Humanitarian/social issuesRight now there is no serioussocial issues like displacement,however there is someresettlement in the southernregion viz. In Dagana, Sarpangand Tsirang.Rural‐urban migration is takingplace and only old people areleft in the farms. Joblessnessand lack of employmentopportunities are on theincrease. The youth labouravailable often donot possessthe required qualifications andskills. There is not much youthrelated anti‐social issues.There is no noticeable urbanslums in this region.The national popn. Growth rateis around 3.1%, which is quitehigh. This region is rich innatural resources.HIV/AIDS, H1N1 and suchdiseases are not prevalent in theregion.There is a high percentage ofhuman‐wildlife conflict whichexists in this region.There is not much genderLegal, Regional andInternational IssuesWe share a close tie with theneighbouring country‐INDIAand also the situation all alongthe region is calm with vibrantsecurity positions. Our countryhas impermeable borbers inthe the south and in the northwhich therefore don’t allowany infusion of foreigners. Ourculture has also been intactand prevalent since timesunknown. Appropriate lawsand rules like Land Act 2007,GYT & DYT Chathrims were inplaced. Legislative bodies likeGYT & DYT were formed atGewog and District level toimplement Government plansand policies. The members ofthese legislative bodies areelected by the people. Thelegislative bodies areadequately supported by theexecutive arm‐ DistrictAdministration.Sector and National Policies,Plans and ProjectsThe 10 FYP is in the secondyear of implementation. TheDzongkhag and gewog basedactivities include farm roadconstruction, rehabilitationworks and other communitydevelopment works. The works- Awareness on DisasterManagementENVIRONMENTALDEGRADATION176

STATE AT+5 YEARS(2014)Economic development &financial servicesExistence of natural resources(minerals deposits, forestproducts, NWFP etc.), privatesector at infant stage, few FDI.Existing small industriesinvesting in technologies, lowprofit, proprietorship business.Limited financial institutions,monopoly & high interest rateand starts catering to ruralcommunities.Transport and InfrastructureRoad network along the basinwidened and series of minorroads connecting communitiesconstructed, traffic flowincreases with higher rates ofaccident. Introduction of massurban transport system in fewtowns. Frequent road blocks.Economic development andfinancial servicesSubsistence farming stillprevalent.Increased tourism.Cottage industries.Stone quarries.New financial institutionsestablished.Transport and InfrastructureImproved transport facilities.Better road conditions.Wider road network (farmroad constructions).Strategic InfrastructureEnhanced and accessible basicfacilities (education, VTIs,health).Coverageoftelecommunication & e‐communication facilities tomost of the Basin II areas.issues.The gap between rich and pooris not so noticeable.8. Enabling environmentThe local government capacityrequires to be strengthened.Disaster management is not yetfully implemented at the locallevel.Appropriate laws, rules, andregulations are sufficient for thepresent requirements.Effective implementation ofgovernment policies is takingplace.1. Economic developmentPrices of commodities haveincreased a lot due to the highworkers population on thePunatsangchu‐I project whichhas started in 2009.Commercial Farming productionwill get increased a lot asdemand increased due toincreased population.Revenue generated byChukha,Tala and BasochhuHydropower plants may helpand be used in fundingdevelopment of thePunatssangchu Hydropowerprojects.2. Strategic infrastructureLhamozingkha‐Dagana feederroad construction has started.More number of hospitals andschool at Wangdue dzonghagworks on Punstsangchu‐I is ongoingand many more hydroprojects are planned in thebasin. The widening ofPhuentsholing‐ThimphuNational Highways (NHW) ison‐going and there is proposalto widen Thimphu‐Trashigangand Thimphu‐Sarpang NHWs.In addition, there is alsoproposal to construct newHighway from Phuentsholingto Daga Pela viaLhamoizingkha.Economic and FinancialservicesWith good network of roadand market, farmers willcommercialize their farmingactivities. There will be moreexploitation of naturalresources like timber, sand andboulders. The financialinstitutes will open morebranch offices. New companymay venture into banking andinsurance business.Transport and InfrastructureThe mode of transport mayremain the roads only butinvestments may be done onexisting rural roads byproviding base course andstone‐pitched drainagethroughout the whole lengthThe widening works of Tsirang‐ECONOMIC DEVELOPMENTAND FINANCIAL SERVICES:‐ Geog Administration will bestrengthened.‐ Thromde Tshogde will be inplace‐ Local government elections‐ NGO and civil societiesincreased‐New Banks and its branchesand banking system in place‐Mining and Quarryingactivities intensified andincreased.‐ Increased number of touroperatorsTRANSPORT:‐Increased in vehiculartransport (two fold)‐ Decrease in pedestrian andanimal transport‐ Easy accessibility of people177

Most remote areas accessible byroad, mode of transport of onlyroad.Strategic InfrastructureAdequate infrastructure withlow standards/quality, no fullcoverage, pressure on theexisting infrastructure, nonexistenceof infrastructures likeairports/helipads, recreationalfacilities etc.Tourism and RecreationNew tourism productsintroduced and implemented.Limited recreational activities.Natural AssetsEnvironment status still pristine,natural habitats get disturbed,no watershed managementschemes or buffer zone forcritical areas. Forest resourcesare able to meet publicdemands. Sustainable harvest ofNWFP’sCultural AssetsFully intact but prone tovandalism, theft and damage bynatural hazards.Population, Employment andSocial ServicesPopulation grows, moreilliterate & employment issue ismanageable, displacement ofsettlement due todevelopmental activities andincrease in anti‐social activities.Basic social services provided95 % electrified.Increasing rate ofurbanization.Tourism and RecreationIncreased tourism.Few recreation facilities.Natural assetsWith a better road network,urbanization, developmentalactivities there will beexploitation of naturalresources (outside core zoneof protected areas).Decreased GRF.Existence of protected areas.Catchment areas protected.Human‐wildlife conflict.Cultural assetsMagnificent historicalmonuments.Numerous ancient templesand religious site.Population, Employment andSocial servicesIncreasing population(Migration, immigrantlabourers).Decreased jobless school dropouts(most will be recruitedbecause of upcomingPunatsangchhu Project &other development activitiesinduced by it).Upgraded health centres andschools.New water sources to beidentified.3. Social servicesHealth and education serviceswill be improved and upgradedto meet the requirements of thepeople.Farming population hasdecreased.Waste management facilitieswill be set up.Cultural heritage has beenmaintained.4. Natural assets/biodiversityForest cover in the basin‐IIregion will decrease. Naturalresources will deplete.Some habitat loss (white‐belliedheron Mahseer and GoldenLangur)5. Climatic issues & risksGlaciers retreat rate mayincreaseEarly warning system improved6. Law and orderLaw and order is maintainedwith adequate resources7. Humanitarian/social issuesRural‐urban migration hasaccelerated. New areas ofsettlement have come up.Displacement of affectedpopulation has taken place.Lot of employmentopportunities due to the project.Health hazards have increased8. Enabling environmentSarpang will begin. The preinvestmentstudies of P/ling‐Daga Pela NHW will start.Strategic InfrastructureUp gradation of few schoolsand construction of BHUs andORCs might take place. Thedevelopment of Bajo townshipwill be completed. Thecoverage of B‐Mobile andTashi Cell might increase.Tourism and RecreationTourism and recreationservices will more remain thesame.Natural AssetsThe volume of timber, sandand boulders and non‐woodforest products available in thebasin may reduce the wild lifeanimals found in the basin mayalso decline.Cultural AssetsFew lhakhangs may beconstructed.Population, employment andsocial servicePopulation in the focus areawill increase with the inflow offoreign workers forPunatshangchu project.Majority of the populationdepend on agriculture assource of livelihoods. Otheroff‐farm activities includeremittance, contract labourers,taxi‐driving and rental mayto the market and centresfor other basic facilities.‐ Increased oil distributors.INFRASTRUCTURE:- District towns developed(Sarpang)- The conditions of theNational Highway, districtroads improved.- More number of bridges,suspension bridgesconstructed.- Basic service facilities forthe public provided.- Increased number ofhigher, middle and lowersecondary schools- Increased number ofhotels.TOURISMANDRECREATION:- Increased number oftourists which needs to bemanaged and also basicfacilities services will be inplace.- Tourist’s destinationsincreased because of theincreasing number oftourists and identificationand development oftourist destinations.- More eco‐trail andmountain trails identified.NATURAL ASSETS:- Habitat of the whitebelliedheron disturbed.178

(health, education etc.) still free.Improvement in providingservice deliveryClimate and External NaturalFactorsRisk mitigation from GLOF,vulnerable to epidemics,disaster coping mechanismsvery less.Agriculture and LandSlight changes in land usepattern (agriculture and forestland being used for urbanizationandinfrastructuredevelopment).Legal, regional andInternational IssuesLocal/international conflict overrights to natural assets, antisocialsocial issues increases.Sector and National Policies,Plans and Projects.Conflicting Policies harmonizedthrough proper protocolWaste management systemstill prevalent.Climatic and external naturalfactorsUnpredictable weatherpatterns.GLOF risks still persist.Changing of cropping pattern.Agriculture and LandSubsistence farming still butmore mechanized.Adaptation to new farmingpatterns.Scattered and limited landholdings.Land‐use conflicts.Legal, regional andinternational issuesInsurgent militants.Trans‐boundary water useconflicts.Sector and national policies,plans and projectsGross National Happiness.Poverty alleviation.Sustainable development.Constitutional Monarchy.Local political interventions.More Decentralization.Strong and rigid policies toconserve natural assets.Local government has beenstrengthened a lot.It is very important to managewater bodies and resourcesproperly in view of theenormous potential for hydropowergeneration.Erratic weather and rainfallpattern causes landdegradation, change ofvegetation, crop damage,human disease (diarrhoea,malaria, dengue fever)increase with rise inpopulation.. there will beemployment created byPunatshangchu project. wastegenerated will increase doublefoldClimate and External NaturalFactorsDue to global warming andgreen house effect the meltingrates of glacial have increased.Numbers of erratic snow andrainfall may experienceaffecting vegetations growthand livelihood of people.Agriculture and LandProduction pattern of farmersmay change from subsistencefarming to commercial farmingdue to increase in market.More farm roads will beconstructed. Agricultural landmight be taken by thePunatshangchu Project.Legal, Regional andInternational IssuesThe Indo‐Bhutan friendshipmay grow stronger.Sector and National Policies,Plans and ProjectsThe Dzongkhag and gewogbased activities of the 10 th FYPmay be achieved. The 11 th FYPThe works on Punstsangchu‐Iwill be in full swing and- Increased hot spring usersdue to easy accessibility.POPULATION,EMPLOYMENT AND SOCIALSERVICES- Population will beincreased (due to thenumber of labours andproject people)- Boom in business activitiesconverging mostly inPunakha‐Wangdue‐Sunkosh‐Damphu.- Rural – Urban Migrationdecreased marginally- Social services/facilitiesincreased- Increased crime rates- Waste Management issues- Diseases increased.- Increased employmentopportunities in HydroPower Projects increased.- Increased number ofheavy vehicles for thetransport of raw materialsfor the construction of thePunatsangchu Projects.CLIMATE AND EXTERNALNATURAL FACTORS:- More erratic weatherpatterns.- Possibilities of GLOF,earthquake since thegeographical terrain of179

STATE AT+10 YEARS(2019)Economic development &financial servicesExistence of natural resources(minerals deposits, forestEconomic development andfinancial servicesReduced subsistence farming(farmer population1. Economic developmentTourism industry will increasedue to the attractive parks onreservoir and entertainmentPunatshangchu II may bestarted.The widening ofPhuentsholing‐ThimphuNational Highways (NHW) maybe completed. The roadwidening works of Thimphu –Sarpang will start.Economic and FinancialservicesFarm production becomesmore market‐oriented andthe project sites getdisturbed.AGRICULTURE AND LANDUSE:- More Irrigation channelsconstructed and planned.- Farming practicesdecreased.- Most of the agriculturalland used for otherdevelopment activities(like hotels, schools,housing etc.)- More land fragmentation- Change from subsistencefarming to commercialfarming (potential basedfarming).- Changed land use patternwith many developmentinfrastructures in place.- Human wildlife conflictsincreased.ENVIRON. DEGRADATION- Project area suffer fromnoise and air pollution- Aesthetic decreased dueto scarring, excavation fortunnel works- Increased amount of solidwaste, construction wasteand excavated spoils fromconstruction site.ECONOMIC DEVELOPMENTAND FINANCIAL SERVICES:‐ Punatasangchu, DagachuProject Commissioned180

products, NWFP etc.), privatesector begins to develop,increase in FDI. Existing smallindustries investing intechnologies, profit increases incompanies.Adequate financial institutions,competition & interest ratebegins to decline & branchoffices to rural communitieswill be established.Transport and InfrastructureRoad network along the basinwidened and series of minorroads connecting communitiesconstructed, traffic flowincreases with higher rates ofaccident. Distance betweenThimphu & Wangdue willreduced with road tunnelling.Introduction of mass urbantransport system in most urbanareas. Frequency of road blocksreduced. Most remote areasaccessible by road, alternativemodes of transport in pipelines.Strategic InfrastructureAdequate infrastructure &standards/quality improves,full coverage, pressure on theexisting infrastructure reduced,less fuel wood consumption,airports/helipads gets dueconsideration, recreationalactivities will be available inmost urban canters.Tourism and Recreationdecreased).Increased revenue fromincreased tourism industry.Set up of more cottageindustries.Stone quarries increased.Advanced financialinstitutions built‐in.Transport and InfrastructureImproved transport facilities.Better road conditions.Upgradation of farm roads tofeeder roads.Tunnelling.Helicopter services (Chenchowood–helicopter services inpartnership with Bill Gates).Strategic InfrastructureEnhanced and accessible basicfacilities (education, VTIs,health).Coverageoftelecommunication & e‐communication facilities inalmost all parts of the Basin II.100 % electrified.Urbanization.Tourism and RecreationTourism expands, diversifiesand sites are developed (Visitof Uncle ET, Jadoo withHrithik).Adequate and advancesrecreation facilities.Natural assetsWith a better road network,urbanization, developmentalfacilitiesInternal tourists numbers mayincreaseCottage industries due totourist industry will come upMore mechanized, commercialfarming projectsTourists destination mayincrease in rural areas2. Strategic infrastructurePunatsangchu‐I projectcompleted and generatingmore revenueIT facilities will be improvedInternational class educationalfacility will be estd. (~1,000acres campus)Gelephug airport completed3. Social servicesSocial services will be furtherimproved with moderntechnology and equipment.Waste recycling should bepromoted.Banking and other institutionalservices provided in the gewoglevel4. Natural assets/bio‐diversityReforestation, afforestationprogrammes are pursued andBiodiversity is activelyprotected.Mahseer may not be able tomigrate due to high hydrodamsand are at serious risk.Enforcement of buffer zones isimproved.demand driven. Farmersventuring into production ofexotic fruit meant for export.People have choices ofbanking facilities and bankingservices becoming morecustomer‐friendly.Transport and InfrastructureThe construction of P/ling‐Dagapela NHW might begin.Strategic InfrastructurePunatshangchu I will becompleted. One or twoprivate school might come up.Health services cateredthrough well staffedDzongkhag and projectHospitals.Tourism and RecreationMore Hotels and resorts maycome up.Natural AssetsThe habitat of white –belliedheron, Golden langur, Takinand aquatic life will beDisturbed. The migratoryMashir fish will no longer beseen in the areas. Moredamages to the environmentdue many construction worksmore bio‐engeneering may becarried out.Climate and External NaturalFactorsPossibility of GLOF and floodsdue to incessant rainfall. Thebasin will experience rise in‐ There will be morecommercial activities‐ More service sectors(Hotels, resorts, handcraftshops, clinics etc.)‐ More investment inindustries/SMEs because ofassessable raw materials,market, labour‐ More investment pockettowns in the Basin 2‐ There will be diversificationof services provided byfinancial institutions‐ Growth of existing financialinstitutions and introductionof new financial institutionsand services‐ Diversification of crops andlivestock to meet theincreased demand of thepopulation.‐ Private sector encouraged,expanded and strengthened‐ Standard of life for thelocalities improved.NATURAL ASSETS:- There will be moredemand of timber,stones, sand, marble etc.leading to theexploitation of naturalresources.- Drying up of water sourcebecause of the increasingdemand and also due toman made disasters181

New tourism products fullyutilized by the tourist in allseason. More recreationalactivities.Natural AssetsEnvironment status stillpristine, natural habitats getdisturbed; start watershedmanagement schemes or bufferzone for critical/protectedareas. Forest resources are ableto meet public demands.Sustainable harvest of NWFP’sCultural AssetFully intact but prone tovandalism, theft and damageby natural hazards.Population, Employment andSocial ServicesPopulation growth increasesespecially in urban centres,literacy rate increases &employment issue reachesminimum. Basic social servicesprovided (health, educationetc.) are free. Improvement inproviding service deliveryClimate and External NaturalFactorsGLOF risk mitigated fromThorthormi completely,vulnerable to epidemics,disaster coping mechanismsimproves. Early warning systeminstalled and operational.Agriculture and LandChanges in land use patternactivities there will beexploitation of naturalresources (outside core zoneof protected areas).Decreased GRF.Existence of protected areas.Catchment areas protected.Human‐wildlife conflict.Cultural assetsMagnificent historicalmonuments.Numerous ancient templesand religious site.Decrease in the number ofBhutanese traditional Chims(houses).Emergence of differentreligious groups.Population, Employment andSocial servicesIncreasing population(Migration).Decreased jobless schooldrop‐outs.Upgraded health centres andschools with better facilities.Improved quality of life.Adoption of new technologyto solve drinking waterproblem.Increase in waste generation.Waste management problemminimized (Incinerators,proper landfills).Climatic and external naturalfactorsUnpredictableweather5. Climatic issues & risksGLOF mitigation measures areput in place and highlytechnical early warning systemsare improved.6. Humanitarian/social issuesSocial issues increases due tocontinued work on the newproject sites and also theincreased populations in thetowns.There will be continueddisplacement and resettlementof people affected by theprojects.Some slums will come up dueto urban poverty and gapbetween rich and poorincreases.7. Enabling environmentLocal government capacity inplace and able to meet thechallenges of localdevelopment.Disaster management systemfully developed and given highpriority.Up‐stream development plansneeds to be carefully reviewedbefore they are approved.temperature. The river waterlevel may increase due tomore glacial melting, therebyincreasing the risk zones.Population, employment andsocial servicesThe radius area of settlementform the river bank mayexpand beyond 0‐5 km.around 40% of the populationmay settle near the projectarea.The waste generation willdouble up.Chances of spreading diseaseslike STD & HIV/AIDs due toconcentration and moreinteraction of people.More people will be absorbedin construction.Sector and National Policies,Plans and ProjectsPolicies will be framed withwider public participation.Plans will be results‐oriented.Many projects beneficial forthe people will be fundedfrom the domestic revenue.People will be more aware ondemocratic principles andinstitutions.(exploitation)- Decrease in the number ofblacked necked crane andwhite bellied heron.- Decrease in thebiodiversity in the floraand faunaINFRASTRUCTURE:- Hydropower generationinfrastructures atPunatsangchu 1 & 2 inplace.- Double lane Highwayconnecting Gelephu toThimphu- Need for parks and otherrecreational facilities.- Construction of Landfill,transfer station for thedisposal of the everincreasing wastes.- Power transmission anddistribution lines in place.- Automobile work shops inplace.- Urban Infrastructuresincluding service utilities(storm water drainage,sewerage, street lightings,etc.) in place- Hotels and extendedgovernment institutionsconstructed and in place.- Housing facilitiesconstructed.TOURISMANDRECREATION:182

(agriculture and forest landbeing used for urbanization andinfrastructure development).Government and farmersinvesting in sustainable landmanagement.Legal, regional and InternationalIssuesLocal/international conflictover rights to natural assetsgets resolved, anti social issuesincreasesSector and National Policies,Plans and ProjectsConflicting Policies harmonizedthrough proper protocolpatterns.GLOF risks still persist.Changing of cropping pattern.Agriculture and LandSubsistence farming limitedto outskirts.Intensive farming practices(sustainable food sufficiencywill be an issue).Congested and limited landholdings.More land‐use conflicts.Visible land degradation.Legal, regional andinternational issuesTrans‐boundary water useconflicts aggravated.Sector and national policies,plans and projectsGross National Happiness.New vision.Sustainable development.Decentralization.Constitutional Monarchy.‐ Tourism expanded anddiversified.POPULATION,EMPLOYMENT AND SOCIALSERVICES- Dramatic increase inpopulation- Rate of Rural – UrbanMigration decreased- Increased employmentopportunities- Employment avenueswill diversifySOCIAL ISSUES:- Displacement ofsettlements.- Need ofresettlement/rehabilitation- Loss of cultural values,tradition and land use- Cultural dilution- Disintegration of jointfamily system.- Old traditional housesremoved/dismantledand replaced with newarchitecture.- Increased crime rates,vandalism, drug abuseetc.- Increase of the rate ofdiseases (HIV AIDs)CLIMATE AND EXTERNALNATURAL FACTORS:- More erratic weatherpatterns.183

- Possibilities of GLOF,earthquake since thegeographical terrain ofthe project sites getdisturbed.AGRICULTURE AND LANDUSE:- Decrease in cultivation ofagricultural land- Remaining agriculturalland will be fullymechanized.- Change in agriculturalpattern where peoplecultivate giving way forcommercial crops.Subsistence farming maybe non‐existent/reduced.- Agricultural landconverted to housingcolonies and othercommercial purposes.- Privately owned land willbe used for plantations.TRANSPORTATION ANDCOMMUNICATION:- ICT developed- Increased number ofvehicles and other modesof transport.ENVIRONMENTDEGRADATION- Increased noise, air, andwater pollution- Water sources encroachedand polluted.- Quality and volume Rivers184

and lake waterdeterioted.- Decrease in the number ofwater catchments areas.- Increased amount ofwaste generation.- Exploited natural forestsSTATE AT +20 YEARS(2029)Economic development &financial servicesOptimumutilization/exploration ofnatural resources (mineralsdeposits, forest products,NWFP etc.), private sectorbecome engine of economicgrowth, FDI in most prioritysectors. All industries useslatest and cleaner technologiesgenerate maximum profit in allcompanies.Different financial institutionsproviding wide range ofservices and choice,competition & full coverage.Transport and InfrastructureRoad network & conditionsmeets international standards,all corners of communitiesconnected by road, traffic flowincreases but rates of accidentdecreases. There will be roadtunnels, mass urban transportsystem operational & othermodes of transport (sky train,railways, and water transport)Economic development andfinancial servicesIntensive farming (withincreased mechanization).Lesser revenue due to slowdown in tourism industry.Small scale industries(environment friendly).Commerce and tradeexpands.Stone quarries decreased.More and competitivefinancial institutions withbetter facilities.Growth of private sectors.Transport and InfrastructureImproved transport facilities.More service centres.Increase in pollution.Better road conditions.Upgradation of feeder roadsto district roads.Major cities connectedthrough tunnel sub‐ways.Strategic InfrastructureWell established facilities(both basic and comfort).1. Economic developmentPunakha‐Wangdue will be oneeconomic and administrativeunit to meet the demands of a1 lac plus metropolitanpopulation.Macro‐economy will developbut the local/micro economywill be decreased.The tourism sector will bemainstay of the local economyin the region.2. Strategic infrastructureAll the hydro‐power projects inthe basin‐II are completed.Road network connectivity iscompleted:Dagana‐Lhamozingkha, Chukha‐dagana,Getena‐Chukha.3. Social servicesSome of the high earnings fromhydro‐power export will bechannelled to local socialservices, which will bemaintained at a very highlevel/standard.4. Natural assets/bio‐diversityAdditional efforts and fundingEconomic and FinancialservicesThe economy of the area mayrise to a great extent withhigh income level of thepeople. Each household at therural level may own a car. Thefarm production may increasevigorously than the previousyears.Few big companies mayset up their private banks. Percapita income increased bythree‐folds.Transport and InfrastructureRoads access to all gewogsand villages. The the NationalHighway may be upgraded tospacious (double lane). Butnumber of vehicles mayincrease giving rise to agreater traffic congestionsand problems. Hi‐qualitybridges may replace theexisting ones.There may be a undergroundrailway network constructedto connect the north andsouthern part of the basinECONOMIC DEVELOPMENTAND FINANCIAL SERVICES:- Well establishedgovernment institutions,service sectors, financialinstitutions andbusiness/commercialsectors.- Self reliant economy- Democracy firmly based- Private sector wellestablished.INFRASTRUCTURE:- Necessary strategicinfrastructure in place.TOURISMANDRECREATION:‐ Increased number oftourists and touristdestination.POPULATION,EMPLOYMENT AND SOCIALSERVICES- Increased population.- Better employmentopportunities.- Improved quality of life185

will be developed.Strategic InfrastructureAdequate infrastructure &standards/quality improves,full coverage, pressure on theexisting infrastructure reduced,less or no fuel woodconsumption & there will besecond international airportand few domestic airports,recreational facilities will beavailable in most urbancentres.Tourism and RecreationTourist arrival increasesunreasonably in all season andnumber of bed night stayincreases too. Wide range ofrecreational choice will beavailableNatural AssetsThere will be no randomquarrying, environment statusstill pristine but naturalhabitats get displaced.Watershed managementschemes or buffer zone forcritical/protected areas wouldhave been completed. Forestresources would be controlledfor use by creating alternative.Cultural AssetsWhile cultural sites would befully intact, there will beincreased vandalism, theft anddamage by natural hazards.Modernization will affect theTourism and RecreationTourism industry slow down(with deterioration ofenvironmental and culture)Regional tourism increased.Pressure on recreationfacilities.Natural assetsWith a better road network,urbanization, developmentalactivities there will beexploitation of naturalresources (outside core zoneof protected areas).More community forestsestablished.Existence of protected areas.Catchment areas protectedextensively.Cultural assetsMagnificent historicalmonuments.Numerous ancient templesand religious site.Decrease in the number ofBhutanese traditional Chims(houses).Emergence of differentreligious groups.Population, Employment andSocial servicesPopulation continue toincrease.Increased demand on healthcare and educational services.Increased employment issues.Upgraded health centres andwill be allocated to theconservation of nature in theregion.5. Climatic issues & risksFocus is given to the mitigationof Glof risks to the hydropowerprojects.6. Humanitarian/social issuesThe population will bestabilized.area. This railway will be thenused to transportgoods and people.Strategic InfrastructureUp gradation of few schoolsand construction of BHUs andORCs might take place. One ortwo private school mightcome up. The focus area willbe fully electrifiedTourism and RecreationThere will be severalrecreational areas in the basingiving rise to touristattraction. There may beboating and swimmingfacilities available.Natural AssetsFew dams will be constructedwhich will reduce the flow ofwater thereby will be possibleto establish plantationsdownstream. However, fewflora and fauna may getextinct due to scarcity ofwater.Climate and External NaturalFactorsPossibility of GLOF and floodsdue to incessant rainfall. Thebasin will experience rise intemperature. The river waterlevel may increase due tomore glacial melting, therebyincreasing the risk zones.Population, employment andsocial serviceswith increase in the livingstandards.SOCIAL ISSUES:- Loss of cultural values,tradition and land use- Cultural dilution- Decrease in ethnic groups- Disintegration of jointfamily system.- Increased crime rates,vandalism, drug abuseetc.- Increase of the rate ofdiseases (HIV AIDs)- Big gaps between thehaves and the have nots.AGRICULTURE AND LANDUSE:- Diversified and fullymechanized agriculturalfarming system.- Reduced land foragricultural purposes.TRANSPORTATION:- Increased number ofvehicles, flow of trafficand number of accidents.- Public transport systemimproved.ENVIRONMENTDEGRADATION- Increased noise, air, andwater pollution- Water sources encroachedand polluted.- Quality and volume Riversand lake water186

cultural values among theyouth.Population, Employment andSocial ServicesPopulation growth/densityincreases especially in urbancentres, literacy rate increases& employment issue reachminimum. Basic social servicesprovided (health, educationetc.) with minimum frees.Improvement in providingservice deliveryClimate and External NaturalFactorsGLOF risk mitigated fromThorthormi completely,vulnerable to epidemics,disaster coping mechanismsimproves. Early warningsystem, search & rescue teamoperational.Agriculture and LandThere will be changes in landuse pattern due tourbanization. Agricultureactivities will be fullymodernized and mechanized.Land management will becarried out in all regions.Legal, regional and InternationalIssuesLocal/international conflictover rights to natural assetsgets resolved but anti socialissues increasesschools with better facilities.Increase in prevalence ofdiseases (water borne, airborne, HIV, obesity,Influenza).Adoption of new technologyto solve drinking waterproblem.Increase in waste generation.Waste management problemminimized (Incinerators,proper landfills).Improved quality of life.Climatic and external naturalfactorsUnpredictable weatherpatterns.GLOF risks still persist.Changing of cropping pattern.Agriculture and LandIntensive farming withincreased mechanization(sustainable food sufficiencywill be an issue).Commercial farming.Congested and limited landholdings.More land‐use conflicts.Increased land degradation.Legal, regional andinternational issuesTrans‐boundary water useconflicts still an issue.Sector and national policies,plans and projectsGross National Happiness.New vision.Dependence on agriculture assource of livelihoods willdecline. People have easyaccess to safe drinking waterby installation of watertreatment plants. The wastegenerated is managed withestablishment of properwaste disposal and treatmentplants.Sector and National Policies,Plans and ProjectsVibrantdemocracyestablished. All GewogCenters connected by motorable road. All villageselectrified.deteriorated.- Decrease in the number ofwater catchments areas.- Increased amount ofwaste generation.- Exploited natural forests187

Sector and National Policies,Plans and ProjectsConflicting Policies harmonizedthrough proper protocolStrong and rigid policies toconserve natural and culturalassets.Decentralization.EXPECTED SECTOR/ISSUE BASED IMPACTS (Can be Direct or Indirect or both: ranked as Y/N +/‐1,2,3) for Time @0,+5,+10,+20 yrs.ECONOMICDEVELOPMENT ANDFINANCIAL SERVICESTRANSPORT ANDINFRASTRUCTURE(ROADS, BRIDGES ETC)STRATEGICNFRASTRUCTURETOURISMRECREATIONANDY, Y: 1,1,2,3Economic development at infantstage and huge potential forfurther growth with FDI.Y, Y: 1,1,2,3Transportation infrastructurewill develop over the time withalternative modes of efficienttransport in place & ruralconnectivity will controlmigrationY, Y: 1,1,2,3Inadequate infrastructurespossess pressure on thoseexisting. With developmentquality infrastructure willreplace the existing & enhancethe livelihood of people.Y, Y: 2,2,3,3Existence of tourism in theregion has developed theregion. Further promotion willdepend on the development ofnew products, enablingenvironment & implementation.Y, Y: 1,2,3,3Due to the establishment ofprojects along Basin II,revenue generated fromdifferent industries liketourism, financial & cottageindustries, hotels, etc., willcontribute to the GDP of tothe Nation as a whole.Y, Y: 1,2,3,3Road network will beincreased and improvedenhancing accessibility tomarkets and basic facilities.Y, Y: 1,2,3,3Due to development activities,better infrastructures will be inplace.Y, Y: 1,2,3,2Though tourism industry willboom in the beginning andcontinue for the first fewyears, it’s likely to slow downin the later years due to loss ofcultural and natural assets.Y, Y: 0,1,2,3The local economy will peak inthe T+10 period and once theHPP are complete there will be adecrease to a stable level.Y, Y: 1,1,2,3Majority of the people areagrarian but with goodY, Y: 1,2,3,3 Y, Y: ‐1, ‐1, 1, 2Most areas will be accessibledue to improved roadnetwork. However, there is alikelihood of more accidentsY, Y: 0,1,2,3 Y, Y: 1,1,2,3Basic infrastructures are therebut need to be strengthenedY, Y: 0,0,1,3 Y, Y: 1, 1, 1, 2Currently the tourism industryis underdeveloped. As the roadnetwork unfolds we expectpositive results. Moreinvestment in tourism, moretourists comingY, Y: 0,1,2,3Economic self relianceachieved.Y, Y: 1,2,2,3Expansion of facilities due toImproved transportinfrastructuresY, Y: 0,1,2,3Revenue generation andoverhead infrastructure inplace.N, Y: 1,1, ‐1, ‐1Increased number of touristthereby increasing culturaldilution, increase in wastegeneration.188

NATURAL ASSETSCULTURAL ASSETSPOPULATION,EMPLOYMENTSCIAL SERVICESCLIMATEEXTERNALFACTOR<strong>SA</strong>NDANDNATURALY, Y: 3,3,2,2While utilizing the naturalresources for development,preservation and conservationwill remain top priority at thenational & international level.Y, Y: 2,2,2,2Culture preservation &promotion will continue toflourish. However challengeslike vandalism & theft ofchorten and temples willincrease in future.Y, Y: 0,1,2,2The existing services areinadequate to cater to thegrowing population. With moredevelopmental activities socialservices will improve and moreemployment opportunities willbe created.Y, Y: ‐1,0,1, 2Insufficient expertise & rescueequipments in disastermanagement are nationalconcern. However, with theformation of proper institution,capacity development andimplementation the impacts ofdisaster can be minimized.Similarly, due to increasingpopulation, there will be apressure on recreationcentres.Y, Y. 3,2,1, ‐1With development activities infull swing, it is expected thatthe natural assets willdeteriorate.N, Y: 3,3,2,2The cultural asset is probableto be threatened in long runwith modernization andexternal influence.Y, Y: 1,2,3,3Owing to the availability ofbetter facilities, living standardof the people will improvedrastically. There will be moreemployment opportunities inthe early phase of the project,however, in the later stageunemployment will be anissue.N, Y: ‐1,‐2,‐3,‐3With development andindustrial growth, climatechange induced disaster andimpacts will be aggravated.Y, Y: 3,1,1,2During project period, not muchtourism development. Oncompletion, there will be verygood tourism industry.N, Y: 0, ‐1, ‐2, 1Some irreversible losses ofbiodiversity will occur. Regenerationof forest and itsresources takes time to recoverto original level, which may notbe attained in 20 years.Y, Y: 0,2,3,1Foreign cultural invasion willnegatively affect local culturalvalues. After 10+ years theculture will again startrecovering.Y, Y: 1,2,2,2Due to constructions ofhydropower plants morepressure put on the naturalenvironmentY, Y: ‐1, ‐1, ‐2, ‐2Severe pressure on naturalassetsY, Y: ‐1, ‐1, 1,1, Y, Y: 2,2,1, ‐1Dilution of culture and lossof Bhutanese values and lossof community belonglinessY, Y: ‐1, 1,2,3There will be moreemployment opportunities andhousehold income willincreaseY, Y: 0,0, ‐1, ‐1 Y, Y: 1,1,2,3Due to global warming andgreen house effect chances ofGLOF and other relateddisasters.AGRICULTURE AND Y, Y: 1,0,0,1 Y, Y: ‐1, ‐2,‐3,‐3 Y, Y: 0,2,3,2 Y, Y: 1,2,3,3 Y, Y: 1,1,2,2,Y, Y: 1, 2, 2, 2The population is expectedto increase due to thedecreased rural urbanmigration. The social servicesare expected to improve aswell.N, Y: 0, ‐1, ‐2, ‐2Un‐predictable climaticconditions due to thedisturbance of naturalenvironment.189

LANDLEGAL, REGIONAL ANDINTERNATIONAL ISSUESSECTOR AND NATIONALPOLICIES, PLANS ANDPROJECTSThe developmental activities willchange the land use pattern insome places. However, withagriculture modernization andland management theproduction will increaseY, Y: 0,‐1,?,?Increasing right to naturalresources locally and may beinternationally for 5 years willhave legal issues after which theissue is unpredictable.Y, Y: 0,1,1,2Policies, plans & projects willhave no immediate impact.However, there will be positiveimpact with harmonization ofconflicting policies.Agricultural lands will be usedfor other developmentalactivities particularlyurbanization. As populationincreases, individual landholdings will be limited.Y, Y: 2, ‐1, ‐1, ‐1With the growth ofhydropower projects along theBasin II, it is probable thatthere will be water issues withthe neighbouring country whoare likely to face watershortage.N, Y: 3,3,3,3As population increases,initially there will beexploitation of both naturaland cultural assets buteventually laws will beenforced to protect theseassets.Agriculture will increase, landavailability will decrease.Pattern of production willchange from subsistence tocommercial farming. With thecoming up of moreinfrastructures moreagricultural land will be lost.Y, Y: 1,1,2,3 Y, Y: 0,1,2, ‐1With economic development,the diplomatic relation maygrow.N, Y: 1,1,2,2 Y, Y: 0,1,2,2More democratic and resultoriented policies and plansformulated for betterdevelopment.EXPECTED ENVIRONMENTAL, SOCIAL and ECONOMIC IMPACTS (+/‐ 1.2.3) ORDER: ENV: SOCIAL: ECON.ECONOMICDEVELOPMENT ANDFINANCIAL SERVICES1(‐1): 2(‐1): 3EnvironmentEconomic activities will havenegative impact on environmentinitially but in the long run it willreap positive benefitsSocialNegative because ofdisplacement leading to socialissues but positive due toeconomic gain (employment,more social services)EconomicImmense potential for revenue1(‐3): 3(‐1): 3- Economic development isinversely proportional tothe environment;- Economic developmentwill improve livelihood;- Economic developmentwill increase the Nation’sGDP.‐2(0): 0(+2): 0(+2)Taken as average impact over 20years. There is overall negativeimpact on environment. Sociallythere is positive benefit. There ispositive economic benefit.‐2(1): 2: 2As the economy grows, thesocial life improves withnegative impact on theenvironmentAgriculture would decreasebut the production wouldincrease based on the valueearned.Y, Y: 1,2,2,2Y, Y: 1,2,2,2‐2: ‐1: 3Due to developmentactivities, there will beenvironment degradationand social issues however,there are economic benefits.190

TRANSPORT ANDINFRASTRUCTURE(ROADS, BRIDGES ETC)STRATEGICNFRASTRUCTURETOURISMRECREATIONNATURAL ASSET<strong>SA</strong>NDgeneration‐1: 2: 2EnvironmentAll developmental activities willrequire destruction of thenatural environmentSocialImprove access to services andincrease living standardEconomicAccessibility and services willpromote positive economicdevelopment‐2: 3: 3EnvironmentAll developmental activities willrequire destruction of thenatural environmentSocialCommunities will extremelybenefit from the readilyavailable servicesEconomicEnhanced economic growth2(‐1): 2(‐1): 3EnvironmentPromote environmentprotectionSocialMay have changes on behaviourpattern. Create employmentopportunitiesEconomicEnhanced economic growth3: 2: 3Environment1(‐3): 3(‐1): 3- It will deteriorateenvironment;- Will make life easier andcomfortable;- It will boost economy.1(‐3): 3: 3- Set up of infrastructurewill have negative impacton the environment;- With better facilities inplace, it will be better forthe people;- It will enhance livelihood.2(‐1): 1(‐1): 2- It will encourageprotection andpreservation ofenvironment;- Employment generationis created;- With tourism industryincreased, incomegeneration will be alsoincrease.3: 3: 2(‐2)- Healthy environment;‐2: 3: 3Air pollution due to vehiclesnegatively impacts onenvironment. Through improvedtransport connectivity, there issocial and economic benefits.‐2: 3: 2Building strategic infrastructurehas negative impact onenvironment. It also bringssocio‐economic benefits‐1(1): ‐1(1): 0(3)Tourism can have negativeimpact on env. As well as social.But there is positive economicand social benefit.‐1(0): 0(2): 0(2)Abundant natural assets has‐2: 2: 2With the good road networkand maximum access, thetransportation becomesreliable and comfortable. Theincrease in automobiles mayhowever increase pollution.‐1: 2: 2People may have access moreincreased facilities. Theconstruction of theseinfrastructures may requiremore space.‐2(1): 2: 2For the attraction of thetourists we may havebeautifully built recreationalareas but they may cause –veimpact on theenvironment(waste, poaching,health risk). People may haveemployment opportunities.Inflow of hard currencies.‐2: 2: 2Exploitation of natural‐2: 3: 3Main form of linkages‐2(2): 1: 3There is social and economicbenefit but affecting theenvironment however,environment can bemanaged with theEnvironment ManagementPlan.‐2: ‐2: 3Increased tourist activitiesare a source of income butthere are social andenvironmental issues.‐3(1): 1: 2Due to economic pressure,191

CULTURAL ASSETSPOPULATION,EMPLOYMENT ANDSCIAL SERVICESCLIMATE ANDEXTERNAL NATURALFACTORSPromote environmentprotection.SocialCommunity benefiting fromgood environmentEconomicEnhanced economic growth2: 2: 2EnvironmentPromote environmentprotectionSocialUnited and harmonious societyEconomicUnique culture drawsinternational attention‐1: ‐1: 2EnvironmentIncrease in population causesstress on environmentSocialPopulation increase putspressure on job marketEconomicPositive HR‐2: ‐2: 1(‐2)EnvironmentDegrading climatic conditionsSocialCommunities vulnerable tohazards (GLOF)EconomicUntimely rain affect harvest butclimate change enhancecultivation in higher altitude- People live healthier lives;- Natural resources will bean asset. However, it willbe a hindrance todevelopment activities.3: 3: 3(‐1)- It will have positiveimpact; however, itimposes some limitationon the economicdevelopment of thecountry.(‐2): 2(‐1): 3(‐1)- With increasedpopulation, environmentwill be affected;- Better living standard butunemployment issues;- Growth in economy butunemployment will haveeconomic implications.(‐3): (‐3): (‐3)- It has a negative impacton environment, societyand economy.benefit both social andeconomic (NWFP)‐1(0): 0(2): 0(2)Some cultural practices havenegative effect on environment(wood for prayer‐flags). It hashigh cultural and economicbenefit (cultural tourism).‐2(1): ‐2(2): 0(1)More population has negativeimpact on environment(garbage, solid waste etc), butalso offers more employmentopportunities.‐3: ‐1: ‐1Climate change is negativelyimpacting the environment aswell as social and economics.resources as raw materials forinfrastructure1: 1(‐2): 2There may be dilution ofculture with mixture ofdifferent types of people‐2: 2(‐1): 2With the rise in population, themay be more demand for basicneeds. Social problems mayarise. With proper socialservices people may beeducated well, live longer andbe productive.‐1: ‐2: ‐2This may cause huge loss onthe infrastructures and lives.natural assets are exploited.1: ‐1: 2Cultural dilution‐2: 2: 3Employment opportunitiesand generation of nationalrevenue‐3: ‐1: ‐3Threat to economy, socialand environment.AGRICULTURE AND ‐1: 2: 2 (‐3): 3: 3 1(‐1): 2: 2(‐1) ‐1: 2: 2 ‐1: 2: 2192

LANDLEGAL, REGIONAL ANDINTERNATIONAL ISSUESSECTOR AND NATIONALPOLICIES, PLANS ANDPROJECTSEnvironmentLand conversion for agriculturalpurposesSocial and EconomicAgricultural dependent society0: ‐1: ‐1Legal issues hamper economicgrowth eventually affectingpeople and environment.3: 3: 3Critical for achieving GNH- Limited agricultural landwill lead to encroachmentof GRF;- It will enhance theeconomy and livelihoodof the local people.‐: 3: ‐- It will affect the relationwith the neighbouringcountries.3: 3: 3- Based on the situation,plans, policies andprojects will be framed.Farming has both positive andnegative impacts onenvironment and economic.0: 0: 0Not much idea1: 1: 1Not much ideaDue to limited availability ofland, people may resort tointensive farming, use ofchemicals giving rise toenvironment degradation.People may resort tocommercial farming.2: 2: 1The legal policies and plansmay have more aspecttowards the environmentalconservation. With theincreased diplomatic relations,we may be secured.1(‐1): 2: 2Sectors plans may be welldeveloped for the socioeconomicgrowthThere are economic andsocial benefits.2: 1: 12: 3: 3National Plans and policiesmade in place for thebetterment of the people.TYPES OF RISK IDENTIFIED BY THE GROUPS (Likely, Unlikely: Y/N. T@0,+5,+10,+20.) Critical uncertainties are signalled and curtail all developmentoptions.1. GLOF: Critical uncertainty,the likelihood of happening ishigh with high damagepossibilities. (Likely)2. Flooding – various: Criticaluncertainty, the likelihood ofhappening is high with highdamage possibilities. (Likely)3. Climate change: Uncertainty,its occurrence will highly impactthe population dynamics.(Likely)4. Epidemics: Uncertainty,Increase in non‐treatable andhighly communicable diseases(H1N1, H1N5, HIV). (Likely)1. GLOF: Likely, CriticalUncertainty2. Flooding – various: Likely,Critical.3. Climate change: Likely,Critical4. Shortage of water: Likely,critical but manageable.1. GLOF: Likely, CriticalUncertainty. The principal riskfactor.2. Flooding – various. Likely andcritical.3. Climate change: Likely,critical. The country will have toadapt to inevitable climatechange4. Geopolitical issues: Unlikely,not critical. Unlikely thatneighbouring countries will goto war.1. GLOF: Likely, critical. Mayhampereconomicdevelopment.2. Flooding – various. Likely,critical.3. Climate change: Likely,critical.4. Geopolitical issues: Likely,critical. May arise and couldhinder economic growth.1. GLOF2. Flooding – various.3. Climate change4. Water conflicts193

5. Political instability: Uncertainas democracy is still in infantstage. (Likely in internationalcontext: Unlikely in Nationalcontext.)6. Global economic crises:Change in economic dynamicscan affect tourism &implementation ofdevelopmental activities. (Likely)7. National security:Uncertainty due togeographical location. (Likely)8. Water conflicts: Uncertain,Globally predicted due topopulation increase and climatechange. (Likely)5. Cultural dilution: Likely,Manageable.6. Loss of Agric. Land: Likely,critical7. Loss of Natural Assets:Likely, manageable8. Rural/urban migration:Likely, manageable.5. Political uncertainty:Unlikely, not critical. A stablepolitical system.ISSUES IDENTIFIED AND COMMON TO ALL GROUPSSl. No. Theme/Topic Sl. No. Sl. No. Theme/Topic1 Economic Development 2 Strategic Infrastructure3 Social ServicesOpportunitiesa. Domestic & Foreigntradeb. Industrialdevelopmentc. Tourism Activitiesd. Mining activitiese. Agriculture &livestock activitiesa. Education Facilitiesb. Health Facilitiesc. Telecommunication Facilitiesd. Power transmissionse. Road constructionsf. Bridge constructiong. Surface Transport Developmenth. Airports & helipadsi. Urbanizationa. Education Servicesb. Health Servicesc. Drinking Water Supply Schemed. Employment Opportunitiese. Financial Servicesf. Courier and Postal Servicesg. Waste treatment and Disposalh. Public Transport Servicesf. Small, MediumEnterprisej. Financial Institutionsk. Early Warning Systemg. Private SectorDevelopment4 Naturalersity5 Climatic Issues & Risksa. GLOF6 Law and Ordera. Trans‐boundary issues5. Water supply6. Change of Plans/Policiesof the Government7. Global economic financialrisk8.Geopoliticalissues/diplomaticrelations194

a. Biodiversity, flora‐fauna‐Forest resources‐Aquatic fauna‐Watershed/water bodiesmanagement‐Land managementb. Creation of buffer zones7 Humanitarian/Sociala. Displacement & stressb. Resettlement Vs Settlingc. Migration Vs overd. Youth & Employmente. Youth & anti social issuef. Urban Povertyg. Population growth VsScarcity of Resourcesh. Modernization VsCulture & Traditionsi. Health (diseases)j. Human wild‐life conflictsk. Gender issuesl. Gap between rich & poorPROCESS OBJECTIVEb. Early melting of glacialc. Rainfall Vs Vegetation Growthd. Monsoon Vs LandDegradation8 Enabling Environmenta. Capacity development of LocalGovernanceb. Disaster management in placec. Policies and programmesformulationd. Appropriate laws, rules andregulations in placee. Effective implementationb. Securityc. Cultural & traditionsd. Immigration (with reference to foreign workers)9 Poverty & Environmenta. Poverty & Environmentb. Changing land use pattern (urbanization)c. Food securityd. Poverty & healthe. Rural livelihoodf. Uneven income distributiong. Education & PovertyOBJECTIVE OF THE STRATEGIC ASSESSMENT PROPOSED BY PARTICIPANTS“To analyse through relevant stakeholder and public participation, a number of alternativedevelopment scenarios expected from investments in Projects on Basin II to enable the selectionof optimal solutions delivering maximum sustainable (GNH) benefits o Bhutan while minimizingthe cumulative impacts of that development”.195

Climate ChangeTOPICS and THEME SUB‐OBJECTIVES SELECTED BY PARTICIPANTSDevelopment planning and associated investments in the area of influence of Basin‐2 hydropower investments aredirected and planned taking into consideration risks and cumulative impacts expected from climate change andsystematically introducing mitigation and management measures.WatershedsBasins/CatchmentCatchment basins and water supplies are mapped, inventoried and effectively managed to ensure continueddelivery of critical ecosystem services to downstream users and the State.Economic DevelopmentTourism – Eco‐tourism –Tourism ServicesEnvironment:‐ Pollution control‐ Waste Management‐ Water Management‐ Biodiversity‐ Natural AssetsSocial InfrastructureAgriculture/ForestsEconomic and urban development of Dzongkhags and Geogs directly affected by investment in Basin‐2 hydropowerdevelopments is planned, coherent, sustainable and, as such, does not impact negatively on the population, theenvironment and conserves inter‐generational equity.Development of tourism assets and opportunities in the area of influence of Basin‐2 hydropower developments areidentified, zoned, promoted, developed sustainably and contribute to national, regional and local developmentplans (within the principles of GNH).Investments and developments in the Basin‐2 area are integrated into the natural environment / Landscape bygiving a high priority on the quality and limitations of ecosystems in the area of influence and minimizing negativeenvironmental impacts.Biodiversity inventoried in the area of influence of planned Basin‐2 hydropower investments is enhanced andactions leading to irreversible losses are prevented.Improving the livelihood of the people by providing better heath services, education, employment opportunities,recreational facilities, better communication and financial services.Ensure minimum loss of agricultural land and Government Reserve Forest lands while ensuring an adequate supplyof land for all future demand as per the relevant laws of the Kingdom.196

Culture and HeritageSecurityA. Cultural heritage values and sites are protected and promoted as social, historical and economic assets.B. Cultural heritage and cultural fabric in the areas of influence is not affected by the development andmigration/displacement have minimum negative impactsMeasures to enhance existing security relationships with neighbour states to ensure that security risks do not erodeeconomic/social development options and potential.197

12.6 ANNEX‐6: PROCESS ACTION PLANPROCESS ACTION PLANACTION TIMING PARTICIPANTS RESPONSIBILITY STATUSNECS ‐ Management1Introduction of the SEA Process toand staff;• June 3 ‐ NLCKey Stakeholders and ProcessDanida ProcessMay – June 2009. • June 9 –NLC NECS, GNHC.Partners: NEC, NLC, GNHC andAdvisor;• June 12 NECS, DEO’s.Dzongkhag Environment Officers.Liaison OfficeCOMPLETEDDenmark.Agreement on StrategicAssessments to be carried (Sectorsor Development Actions) outaccording to following criteria:• Based on priorities defined inGross National Happinessthe 10 th FYP;Commission;NECS – GNHC – NLC2 • Complex or mega‐projects May – June 2009 National Environment – Process Advisor COMPLETEDlikely to have significant widerdevelopment impacts;Commission;National Land Commission• Predicted Environment, Socialand Economic impactsrequiring management andmitigation;3 Process Planning and Budgeting June 8‐24,2009 NECSTshewang Chaskar –Process AdvisorCOMPLETED45Site visit to Wangdue‐Phodrang tolocate venues for Basin‐2Workshops.Preliminary agreement on proposedplan and budgetJune 23,2009June 25,2009NECSLOD‐NECSTshewang Chaskar –Process AdvisorH.E. Deputy Minister‐ NECSCOMPLETEDCOMPLETED

67891011Finalisation of Process Description,Plan and Budget (The PlanningDocument)Delivery of the Planning documentto the Liaison Office Denmark forEndorsementDeparture of the Short‐TermAdvisor.Delivery of the Planning Documentto GNHC for approval and release offundsPlanning and logistics necessary toprocess preparationPreparation of site visits Basin‐2projects:• Number of NECS participants ‐3,4;• DEO’s informed to be available;• Letters to Dzongdags informingof the visit and requesting ascheduled meeting withDzongkhag officers.• Hydro‐engineers informed andmeetings arranged;• Hotel reservationsJune 26, 2009June 29, 2009NECSNECSDirector General –NECSLiaison OfficeDenmark.Tshewang Chaskar –Process AdvisorH.E. Deputy Minister‐ NECSDirector General –NECSCOMPLETEDCOMPLETEDJune 30, 2009 n.a. n.a. n.a.June 30,2009July 2009July 2009NECSNECS‐GNHC‐NLC‐DEO’sNECS – DEO’s – GNHCDirector General –NECSDirector General ‐NECSDirector General –NECSThinley Dorji – NECSDzongkhagEnvironment OfficersCOMPLETEDFunds releasedAugust 2009COMPLETEDCOMPLETED199

12• Transport and logistics arranged;• Visit to include hydropower sitesand an overview of the area ofinfluence.Preparation of site visits –Dhamdum Industrial Estateprojects:• Number of NECS participants ‐3,4;• DEO’s informed to be available;• Letters to Dzongkdags informingof the visit and requesting ascheduled meeting withDzongkhag officers.• Department of Industry informedand meetings arranged;• Hotel reservations• Transport and logistics arranged;• Visit to include Industrial Estatesand an overview of the area ofinfluence.July 2009NECS – DEO’s ‐ GNHCDirector General –NECSTenzin Khorloo –NECSDzongkhagEnvironment OfficersCOMPLETED13 Arrival of the Short‐Term Advisor August 4,2009 n.a. n.a. n.a.14Briefing at NEC to discuss status andNECS staff andAugust 5‐7, 2009NECSprogress of <strong>SA</strong> arrangementsProcess AdvisorCOMPLETED15Scoping Mission: Basin‐2 ProjectsNECS – ProcessNECS officers – DEO’s –• Bilateral stakeholder discussionsAdvisor andDzongkhag Administrations –(Dzongkhags and project officers); August 11‐15,DzongkhagProcess Advisor – Hydropower• Site Visits to Area of influence and 2009Environment Officersengineers – Department ofthe proposed focus area;from the area ofEnergy• Presentation of the <strong>SA</strong> process andinfluence.COMPLETED200

1617procedures;• Preliminary definition of SEAProcess Objectives;• Preliminary definition of SEAProcess Framework (Spatial andTemporal)• Mission Report to documentprogress, constraints and detailnext steps.Scoping Mission: DhamdumIndustrial Estate• Bilateral stakeholder discussions(Dzongkhags and project officers);• Site Visits to Area of influence andthe proposed focus area;• Presentation of the <strong>SA</strong> process andprocedures;• Preliminary definition of SEAProcess Objectives;• Preliminary definition of SEAProcess Framework (Spatial andTemporal)Mission Report to documentprogress, constraints and detail nextsteps.Letters of Invitation to workshopparticipantsAugust 18‐22,2009August 15NECS officers – DEO’s –Dzongkhag Administrations –Process Advisor – IndustrialEstate planners – Departmentof Industry.NECSNECS – ProcessAdvisor andDzongkhagEnvironment Officersfrom the area ofinfluence.H.E. Deputy Minister‐ NECSDirector General –NECSCOMPLETEDCOMPLETED18 Preparation workshop materials: August 25‐28 2009 NECS – GNHC ‐ NLC Process Advisor COMPLETED201

19• Workshop agenda• PowerPoint presentations;• Forms;• Scenario Forms;• Participant Folders andstationary;• Confirm logistics.• Dry run to NECS staffparticipating in the Workshops.Workshop – 1: Basin‐2 HydropowerProjects. Venue – Wangdue‐Phodrang• Introduction to SEA/<strong>SA</strong> andworkshop format;• Agreement on the ProcessFramework (Spatial and Temporal);• Definition and agreement onProcess Objective and Subobjectives;• Compilation of availableinformation collected and broughtto the venue by participants;• Introduction to Scenarioconstruction;• Identification of scenarios;• Introduction to forecasting;• Introduction to Analyticaltechniques, examples andselection of preferred options;• Linkages; environmental and socio‐August 31 –September 5 2009NECS‐ GNHC ‐ NLCMr. Tshering TashiMr. K.C. NyedrupMr. Thinley DorjiMr. TshewangChaskarMs. TshewangZangmoH.E. Deputy Minister– NECS.Director General –NECS.Mr. Tshering TashiMr. K.C. NyedrupMr. Thinley DorjiMr. TshewangChaskarCOMPLETED(58 participants)202

2021economic effects;• Demonstration of the use ofImpact matrices;• Construction and discussion of“zero” option scenarios.• Construction of T+5,10,15,20scenarios• Identification of information needsand availability.Compilation of information andresults of Workshop‐1 Basin‐2developments. Discussions in NECSto study the process and introduceadjustments as necessary prior toWorkshop‐2 Basin‐2 developmentsand Workshop‐1 Dhamdum.Workshop – 1: Dhamdum IndustrialEstate Projects. Venue ‐ Paro• Introduction to SEA/<strong>SA</strong> andworkshop format;• Agreement on the ProcessFramework (Spatial and Temporal);• Definition and agreement onProcess Objective and Subobjectives;• Compilation of availableinformation collected and broughtto the venue by participants;• Introduction to ScenarioSeptember7‐11, 2009September14‐19, 2009NECS – ThimphuNECS‐ GNHC ‐ NLCProcess AdvisorMr. Tshering TashiMr. K.C. NyedrupMr. Thinley DorjiMr. TshewangChaskarMs. TshewangZangmoH.E. Deputy Minister– NECS.Director General –NECS.Mr. Tshering TashiMr. K.C. NyedrupMr. Tenzin Khorloo.Mr. TshewangChaskar.Ms. TshewangZangmoCOMPLETEDCOMPLETED(53 participants)203

22construction;• Identification of scenarios;• Introduction to forecasting;• Introduction to Analyticaltechniques, examples andselection of preferred options;• Linkages; environmental and socioeconomiceffects;• Demonstration of the use ofImpact matrices;• Construction and discussion of“zero” option scenarios.• Construction of T+5,10,15,20scenarios• Identification of information needsandCompilation of information andresults of Workshop‐1 DhamdumIndustrial Estate. Discussions inNECS to study the process andintroduce adjustments as necessaryprior to Workshop‐2 (Dhamdumand Basin‐2 hydro projects).23 Data and information gathering toestablish baselines critical to theprocess and to future monitoring.Information will be collected from:Stakeholders; Statistics; Census;Institutions; Associations; NGO’s;September21‐23 and 25 2009October 1‐25 2009NECS – ThimphuNECS – GNHC – NLC – Sectors –Stakeholders – Dzongkhags –and others.Process AdvisorMr. Tshering TashiMr. K.C. NyedrupMr. Tenzin KhorlooMr. TshewangChaskarMs. TshewangZangmoNECS staff;GNHC;NLC;DEO’sCOMPLETEDIN PROGRESS204

24252627Cooperating Partners; and all othersources identified.Progress Report to the joint GNHC‐NEC CommissionLetters of Invitation to workshopparticipantsDrafting of Strategic AssessmentReports (Basin‐2 hydropower andDhamdum Industrial Estate):• Agree on Report format;• Agree on the Table of contents;• Draft background sections;• Draft Methods Section• Draft section detailing theenvironmental, social andeconomic framework andbaseline.Preparation of materials for the 2 ndBasin‐2 and Dhamdum Workshops:October 26‐302009October 26 ‐302009November 2‐132009November 2‐132009NECSNECSNECS‐GNHC ‐NLCNECS – GNHC ‐ NLCH.E. Deputy Minister– NECS.Director General –NECS.Process AdvisorMr. Tshering TashiMr. Thinley DorjiMr. Tenzin KhorloMs. TshewangZangmoMr. K.C. NyedrupH.E. Deputy Minister‐ NECSDirector General –NECSGNHC – NLC – NECStaffDirector General –NECS.Mr. Tshering TashiProcess AdvisorMr. Thinley DorjiMr. Tenzin KhorlooMs. TshewangZangmoMr. K.C. NyedrupProcess AdvisorMr. K.C. NyedrupREPORT SUBMITTEDAND BUDGETRELEASEDCOMPLETEDCOMPLETEDCOMPLETED205

28• Workshop agenda• PowerPoint presentations;• Forms;• Scenario Forms;• Participant Folders andstationary;• Confirm logistics.Workshop – 2: Dhamdum IndustrialEstate Projects. Venue – to bedecided.• Analysis of Scenarios;• Projected land‐use and landdemand in the area of influenceand the focus area;• Identify conflicts andincompatibilities relative to thescenarios;• Identify Risk Areas relative to thescenarios• Identification of developmentalternatives;• Identification of options andopportunities;• Impact assessments and mitigatingmeasures (point source andcumulative);• Selection of preferred option andalternative choices;• Full Description of preferredoption, mitigating measures,November16‐20, 2009NECS‐ GNHC ‐ NLCMr. Thinley DorjiMr. Tenzin KhorloMr. TshewangChaskarMs. TshewangZangmoH.E. Deputy Minister– NECS.Director General –NECS.Mr. Tshering TashiMr. K.C. NyedrupMr. Tenzin Khorloo.Mr. TshewangChaskar.Ms. TshewangZangmoProcess AdvisorCOMPLETED206

2930enhancement of opportunities;• Compilation of ResultsWorkshop – 2: Basin‐2 HydropowerProjects. Venue –to be decided.Analysis of Scenarios;• Projected land‐use and landdemand in the area of influenceand the focus area;• Identify conflicts andincompatibilities relative to thescenarios;• Identify Risk Areas relative to thescenarios• Identification of developmentalternatives;• Identification of options andopportunities;• Impact assessments and mitigatingmeasures (point source andcumulative);• Selection of preferred option andalternative choices;• Full Description of preferredoption, mitigating measures,enhancement of opportunities;• Compilation of ResultsPreparation of Draft SEA/<strong>SA</strong> Reportfor Basin‐2 Hydropower ProjectsNovember23‐28, 2009December1‐18, 2009(Tentative dates)NECS‐ GNHC ‐ NLCNECS‐GNHC‐ NLC –ProcessAdvisorH.E. Deputy Minister– NECS.Director General –NECS.Mr. Tshering TashiMr. K.C. NyedrupMr. Thinley DorjiMr. TshewangChaskarProcess AdvisorNECS StaffProcess AdvisorSCHEDULEDPLANNEDTHIS REPORT31 Preparation of Draft SEA/<strong>SA</strong> Report December NECS‐GNHC‐ NLC –Process NECS Staff DRAFT REPORTAS207

for the Dhamdum Industrial EstateProjects32 Process Advisor Departs Bhutan1‐18, 2009(Tentative dates)December 19,2009Advisor Process Advisor PREPAREDn.a. n.a. n.a.33Disseminate Draft <strong>SA</strong> Reports toStakeholders for Comments andadjustmentJanuary 2010GNHC‐NECS – DzEO’sGNHC – NLC – NECStaffH.E. Deputy Minister– NECS.Director General –NECS.Mr. Tshering TashiMr. K.C. NyedrupMr. Thinley DorjiMr. Tenzin KhorlooMs. TshewangZangmoSCHEDULEDPLANNEDAS343536Prepare Final Draft SEA/<strong>SA</strong> Reportsincorporating stakeholdercomments.Circulate Draft Report to keyStakeholders and the Private Sectorin preparation of a NationalConsultation WorkshopPrepare the Natiional ConsultationWorkshop:- Draw up lists of participants- Select and secure a venue- Send invitationsJanuary 2010January‐February2010NECS‐GNHC‐ NLC –Process AdvisorNECS ‐ DzEONECS StaffProcess AdvisorNECS, GNHC StaffMarch 2010 NECS‐GNHC‐NLC NECS, GNHC StaffSCHEDULEDPLANNEDSCHEDULEDPLANNEDSCHEDULEDPLANNEDA<strong>SA</strong><strong>SA</strong>S208

37Adjust Draft Reports followingoutcomes and comments of theNational Consultation Workshop.March 2010 NECS StaffProcess AdvisorSCHEDULEDPLANNEDAS38394041Submit SEA/<strong>SA</strong> Report to jointGNHC‐NEC‐NLC Commissionmembers.Joint GNHC‐NEC‐NLC Commissionmeeting at a venue to be decided topresent the findings for commentsand endorsement.Adjust Report following commentsof the Joint CommissionDraft Record of Decision on behalfof the joint GNHC‐NEC‐NLCCommission as per their specificinstructions.March 2010April 2010April 2010April 2010GNHC‐NEC ‐NLCGNHC – NEC – NLCNECS‐GNHC‐ NLC –Process AdvisorGNHC ‐ NECSH.E. Deputy Minister– NECS.Director General –NECSMr. K.C. NyedrupH.E. Deputy Minister– NECS.Director General –NECS.Mr. Tshering TashiMr. K.C. NyedrupMr. Thinley DorjiMr. Tenzin KhorloMs. TshewangZangmoProcess AdvisorNECS StaffProcess AdvisorH.E. Deputy Minister– NECS.Director General –NECS.Mr. K.C. NyedrupMr. Thinley DorjiMr. Tenzin KhorloMs. TshewangSCHEDULEDPLANNEDSCHEDULEDPLANNEDSCHEDULEDPLANNEDSCHEDULEDPLANNEDA<strong>SA</strong><strong>SA</strong><strong>SA</strong>S209

42Prepare a first Draft of an SEA/<strong>SA</strong>Process implementation manual.March‐April 2010NECSZangmoProcess AdvisorNECS StaffProcess AdvisorDRAFT IN PROGRESS210