Easing the Traffic Woes of the World’s Happiest Nation

Bhutan is dealing with a problem of a different kind. A problem you associate with the highly urbanized nations – traffic jams.

For all the tranquility that Bhutan offers to tourists, Thimphu, the capital of this intriguing destination, is buzzing with commercial exuberance and vehicular traffic especially on its one-mile long main entertainment and shopping street – Norzin Lam, which has earned the enviable reputation of being the most congested part of Thimphu.

But now, with the setting up of two new multi-level parking facilities, a project that IFC has structured through its public private partnership team, the choking of Norzin Lam will be a thing of the past.

In a country of 0.7 million people, one in every seven people live in Thimphu. “This number is increasing, so is the number of cars and we needed a solution to find parking spaces for these cars to clear the road for traffic. We partnered with IFC to develop a PPP transaction for multi-level off-street parking facilities in line with Bhutan Transport 2040 Integrated Strategic Vision document of the Royal Government of Bhutan which lays out the vision of creating a sustainable transport system that has limited impact on the environment and makes people’s lives easier,” said Mr. Kinlay Dorjee, the mayor of Thimphu Thromde (municipality of the city of Thimphu).

IFC took up feasibility assessments to understand the technical and commercial viability of the project and surveyed the traffic volume to determine how many cars the parking facility should accommodate. User surveys brought in unique perspectives such as their willingness to pay an increased parking fee and their views on making the Norzin Lam more pedestrian-accessible. IFC also brought in strong international and local expertise to structure the deal. To provide speedy approvals, Thimphu Thromde created a multi-disciplinary steering committee which was a critical factor in the success of this program.

IFC structured the project to be commercially viable without requiring any subsidy from the government. The project will mobilize about $9.6 million of private sector investment, and will have a positive fiscal impact for the city through an annual revenue share of $230,000.

Thimphu Thromde ran an independent competitive bidding and awarded the contract to KCR Private Limited, a special purpose vehicle set up by the winning consortium of four private sector companies from Nepal and Bhutan. They will develop 550 new off-street multi-level parking spaces and refurbish about 1,000 existing parking spaces. Once constructed, these will be the first multi-level car parking system in the city. In addition, they will manage the parking operations for the next 22 years.

Thimphu parking is the first PPP in the country in the urban infrastructure space and is also the first PPP successfully closed by the Thimphu Thromde. This project has cleared the way for many more similar projects on developing the urban infrastructure in a sustainable manner. And in every literal sense, it has cleared the way for the 110,000 Bhutanese who live in the capital city of Thimphu.

For more information contact Tanu Chhabra Bahl, New Delhi/Communications Practice Group and Pankaj Sinha, PPP South Asia.