September 19, 2024
SAMTSE – Even as preparations for the construction of the 16-kilometre Samtse-Banarhat cross-border railway is underway, businesses and factories in Samtse say this railway link will be a game-changer for the local economy, attracting investments.
The recent feasibility survey covered over 30 acres of Dhamdum Industrial Park—25 acres in Pocket A and five acres in Pocket C—at the extreme end along the Tashicholing-Phuentsholing Highway in Samtse for the planned termination point.
Provided everything goes as planned, the four established factories will be required to relocate within the industrial area, while the remaining plots are currently not being allocated for development.
The railway is anticipated to be operational within five years following the completion of final studies.
Promoters of the ferro-silicon factories at Norbugang Industrial Park project that the upcoming railway network will enhance transportation connections, stimulate economic growth, and transform the local economic landscape.
A representative of BMML Ferro Alloys at Norbugang Industrial Park, Kezang Phuentsho, highlighted the advantages of the railway for handling large volumes of exports and imports.
“The railway’s proximity is ideal for importing raw materials that are unavailable domestically,” he said. He also pointed out that the railway would address current challenges with motorable transportation, especially during the monsoon season.
“We face significant challenges just importing small materials at present,” he said.
The current reliance on truck transport from the Banarhat railway station in West Bengal, India, incurs considerable inconvenience and cost. The new railway station within Bhutan promises to streamline transportation, reduce costs, and improve efficiency.
“Once established, the railway will provide long-term economic benefits for the communities,” he said.
A representative from Exalt Druk Enviroklens Limited said that the material could be transported directly within the country without the need for additional transport from a foreign station. “The proximity would facilitate the export of raw materials, especially coal,” he said.
While costs associated with moving goods across the borders would be reduced, rehandling costs will still remain due to the transshipment to the factories, as Norbugang Industrial Park is about 10 kilometres from the planned railway station.
A resident said that while the metals are available in Pasakha, local suppliers are unable to compete with Indian suppliers due to a 2 percent tax deducted at source (TDS) which is not applied to Indian suppliers. “This leaves the local suppliers at a loss and discourages them from participating,” he said.
Business owners in Samtse anticipate that direct railway access will streamline logistics, expedite deliveries, and reduce the complexity of importing goods.
A hardware store owner in Samtse town, Sonam Tobgay, said that reduced transportation costs would result in cheaper prices for goods in the local markets. “Everything from groceries to hardware is being imported from Siliguri in India,” he said. “The train would simplify transportation and reduce the challenges of truck shipments.”
The exemption of goods and services tax at source for Bhutanese importers who buy directly from manufacturers already makes local market prices competitive.
“Even after accounting for a 10 percent tax, we still enjoy financial benefits,” he said. “The government would also develop a new policy for the declaration of customs duties for shipments via trains, which are currently handled across borders,” he added.
The construction of ferro-silicon factories at Norbugang has already had a positive impact on local businesses, including increased population.
Local business owners are hopeful that the demand for materials from factories will stimulate the economy in Samtse, Phuentsholing, and neighbouring Indian towns.