Govt decision puts Fast Track project in jeopardy: Experts

Experts and bureaucrats have warned that the government´s recent decision to make a common alignment for Kathmandu-Terai Fast Track and Kathmandu-Hetauda Tunnel Highway in the Khokana area might create problem in implementing the one of the highly prioritized projects.
Saroj Man Shrestha, former project chief of the fast track project said the decision to merge the alignment of the two different infrastructures, made jointly by National Planning Commission (NPC) and Ministry of Physical Planning, Works and Transport Management (MoPPWTM) was a major setback for the implementation of the proposed expressway.
“These are completely two different projects having different nature and investors. Making common alignment for both the projects is not practical in any sense,” Shrestha told Republica on Sunday.
The government recently took the decision arguing that the proposed alignment would bring down the cost of land acquisition in Khokana area for the both project.
Kishore Nath Gongal, project chief of the fast track project, however, expressed ignorance about the government´s decision about the common alignment.
“I have no idea about the decision as I have not been formally informed about it. I only came to know about it from the media. Lately, few potential investors who have already bought expression of interest (EoI) to develop the Fast Track have also voiced concern over the decision,” said Gongal.
The proposed 76 km fast track will connect Kathmandu with central Tarai while 50-km Tunnel Highway will link Kathmandu with Hetauda.
After the government´s decision both the road projects will share common alignment of 15 kilometers in Khokana which is most expensive of the lands to be acquired for the implementation of those infrastructures.
Officials at the MoPPWTM also have expressed worry about the government´s decision as it might put the much-hyped fast track at risk.
“The decision by the concerned officials at the NPC and the ministry without studying the problems while sharing the project sites in 15 km long stretch given that both are going to be implemented under Built Operate Own and Transfer (BOOT) modality of Public Private Partnership,” said the source.
The government had handed over the Tunnel Highway project to the Nepal Purvadhar Bikas Company (NPBC) under the BOOT act in May to complete the project in four years.
Similarly, the government has called for Expression of Interest (EoI) from the investors for the fast track.
Meanwhile, Dipendra Bahadur Kshetry, vice-chairperson of the NPC also said common alignment for two mega projects would be cost effective in the long-term. “Though the concept of common alignment is cost effective, we need to work hard to ensure the effective implementation of this idea in these projects which are different in nature,” said.

Shikhar Shoes shuts down after labor dispute

Shikhar Shoes Industries, producer of popular domestic brand of Shikhar Shoes, on Sunday decided to close down its operations permanently after it failed to meet the agitating workers´ demands that included among others, 50 percent rise in basic salary and education allowance for their children´s tuition.
The company management declared that it would close down production permanently after the negotiation with trade union leaders failed to bring positive result to resolve the week-long labor dispute.
The company which had been rolling out around 500 pair of shoes per day, stopped production process since September 15 after agitating workers affiliated to All Nepal Industrial Trade Union Revolutionary (ANIT-R) padlocked the factory.
Intensifying their pressure on the management, agitating workers on Friday forced closure of five authorized showrooms of Shikhar Shoes in New Road, City Centre, Bouddha, New Baneshwar and Patan. The striking workers had even resorted to attacking at the residence of Ram Krishna Prasai, managing director of the company in Ranibari Kathmandu on Saturday.
“We were always ready to address their genuine demands. But fulfilling some of their 17-point demands including 50 percent salary hike and allowance for their children´s education were beyond our capacity. Hence, we have no option but to permanently close of the factory,” Prasai said. The company was established with the initial investment of Rs 100 million.
“We have been forced to shut down the factory ahead of the major festivals when demands for shoes tend to be highest. However, we will clear the existing stocks if our showrooms are allowed to open,” added Prasai. He said though management tried to address the initial demands, the workers continued to put up more demands without considering the capability of the company to fulfill them.
“They put forth demands thrice in a month besides issuing frequent threats to us,” Prasai said.
The closure of one of the domestic factory, which was providing jobs to around 150 people is a major setback at a time when the government is planning to celebrate Investment Year 2012/13.
“The management of the company will not pay to the workers while the factory remained closed,” Prasai said.
Keshar Pradhan, central general secretary of ANIT-R said the management closed the factory unilaterally though the demands put forth by the workers were genuine. “Management doesn´t seem to be serious to resolve the labor problems,” said Pradhan.

Agitating workers close down Shikhar Shoes showrooms

Agitating workers on Friday forced closure of five authorized showrooms of Shikhar Shoes -- one of the most popular domestic footwear brands.
The workers have forced closure of Shikhar Shoes showrooms at New Road, City Centre, Bouddha, New Baneshwar and Patan.
“We closed our showroom after trade union leaders asked us to pull the shutters down,” Raju Upreti, proprietor of Shikhar Shoes showroom at City Center told Republica on Saturday.
Shikhar Shoes, which has been manufacturing around 500 pair of shoes per day, has stalled production since September 15 after workers associated with the All Nepal Industrial Trade Union Revolutionary (ANIT-R) padlocked its factory. The agitating workers have forwarded a 17-point demand to the company management.
The workers have demanded 50 percent hike in basic salary and other allowances, among others. But the management has refused to fulfill their demands.
“We are ready to address their genuine demands. But demands such as salary hike and allowance for their children´s education is something the company can´t afford,” said Ram Krishna Prasai, managing director of the company.
However, Indra Rai, president of the trade union at Shikhar Shoes said their demands are reasonable. “We have demanded permanent status, provident fund, bonus and festival allowances for workers serving for more than 240 days,” said Rai.
“We cannot fulfill their demands,” said Prasai. He, however, said that he was ready to sit for talks with the trade union.
“We will only hold talks with the management if it is willing resolve problems and resume production,” said Keshar Pradhan, general secretary of the ANIT-R.
The management on Saturday has threatened to shut down the factory permanently.
“If the workers do not compromise, we will shut down the factory permanently,” said Prasai. “We hope the workers will understand the gravity of problem.”
Shikhar Shoes was established some eight years ago with an initial investment of Rs 100 million.

Govt readies portal to lure FDI

In a bid to help foreign investors interested to put their money in Nepal, the government is soon launching a portal that will have information about government policies, country´s investment climate and features of major projects, among others.
The government in partnership with the private sector is showcasing eight sectors -- hydropower, tourism, manufacturing, agriculture, mines and minerals, service, information and communication technology and infrastructure development - through the portal (www.investnepal.gov.np), aiming to lure foreign investment in those areas.
According to officials, the portal will be a window for foreign investors to know about Nepal, its investment climate, investment procedures, visa process, policies, laws, and acts including different surveys and treaties and agreements signed by Nepal with other countries.
“The portal will be formally launched at the end of this month,” said Chhabindra Parajuli, under secretary at Ministry of Industry (MoI). “The Invest Nepal portal serves as a single authorized information source for policies governing foreign direct investment and other business related information.”
The ministry is developing the portal with the assistance of United State Agency for International Development (USAID). According to Parajuli, there will be a dedicated help desk to provide additional information to interested foreign investors. Confederation of Nepalese Industries (CNI), an umbrella organization of the local industrialists, will host the help desk.
Providing information on FDI, sector specific information and playing a role of a facilitator among investors, government agencies and the private sector are few of the specific objectives of the help desk, reads the yet to be launched web portal.
Potential investors can also ask for specific information about Nepal from the help desk. “The help desk will provide information and features of the particular projects as well,” Mahendra Neupane, executive director of CNI, said. “Foreign investors won´t need to travel all the way to Nepal just to know the basic pre-investment environment and policies.”
The reference centre is also expected to be helpful in attracting foreign investment as it will go online ahead of the launch of the much touted Investment Year 2012/13.

Fast Track, Tunnel Highway to have common alignment in Khokana

In order to minimize the cost of land acquisition in Khokana, Laitpur, the government has decided to develop the track being opened in Khokana area as a common alignment for both Kathmandu-Tarai Fast Track and Kathmandu-Hetauda Tunnel Highway.
Previously, National Planning Commission (NPC) and Ministry of Physical Planning, Works and Transport Management (MoPPWTM) had cited Khokana as the entry/exit point for the Fast Track road. They had identified Balkhu as entry/exit point for the Tunnel Highway.
“The MoPPWM and NPC have agreed in principle to make a common alignment for both the roads projects,” Hari Bhakta Shrestha, joint secretary at MoPPWTM, told Republica.
The Fast Track, which will connect Kathmandu and Nijghad of Bara, is a 76-km expressway, while the 50-km Tunnel Highway will link Kathmandu and Hetauda.
“Now both the road projects will share common alignment of 15 kilometers in Khokana area,” said Shrestha.
Some officials at the ministry, however, said the decision to have common alignment for both the roads has complicated things for the fast track project, particularly as sharing of certain segment of roads might turn international investors away.
“The decision might put the very project (fast track) at risk. But, surprisingly, concerned officials at the NPC and the ministry took the decision even without studying how they will manage the shared section, among others, in the two BOOT projects," said a source.
Shrestha too admitted a serious study was needed to work out ways to manage the common section. "But the government will do that aptly," he said. He even disclosed that the decision was taken based on the request Khokana locals.
"Their request made sense as well, as now we would be able to acquire land for the project easily. Also, it will lower our land acquisition cost,” he added.
Dipendra Bahadur Kshetry, vice-chairperson of the NPC, also said common alignment for two mega projects would be cost effective in the long-term.
The government had handed over the Tunnel Highway project to the Nepal Purvadhar Bikas Company (NPBC) under the build-own-operate and transfer (BOOT) act in May, whereas it has called for expression of interest (EoI) from the contractors for the Fast Track project only recently.
The NPBC has been asked to develop the Tunnel Highway within 4 years.
"NPBC officials have agreed on the concept of common alignment. But I think it will be a difficult task for government to synchronize the development of the two projects," Kshetry added.

Country sees 7% drop in new investment commitment

Deepening political uncertainty compounded with persisting labor problems have dragged down fresh investment commitment in the industrial sector by almost 7 percent during the fiscal year 2011/12 compared to a year earlier.
Crucial sectors of economy such as tourism, services, energy and agro-based industries suffered the decline in new commitment for investment.
Statistics compiled by the Department of Industry (DoI) shows that total new investment including foreign and domestic, reached just Rs 84.42 billion during the fiscal year 2011/12.
The country witnessed a fall in the investment commitment despite the rise in the number of firms registered with the government across the country during the review year.
The government reported an increment of commitment for new firms to 279 during the fiscal year 2011/12 up from the 242 firms registered in previous fiscal year.
Entrepreneurs attributed the decline mainly to political instability, irresponsible behaviour of industrial workers and persisting power shortage.
“Given the worsening investment climate, local industrialists are switching to trading business to avoid tension dealing with labor unrest and power shortage which has eventually pushed up cost of production,” said Pashupati Murarka, vice president of the Federation of Nepalese Chambers of Commerce and Industry (FNCCI).
According to the the statistics, the fresh investment in the energy based industries has dropped by around 18 percent to Rs 55.01 billion during the fiscal year 2011/12 compared to a year earlier.
Similarly, the commitment for new investment has fallen by around 19 percent in service sector to Rs 9.59 billion during the fiscal year 2011/12. Likewise, farm-based industries also suffered a loss in the fresh investment to alarming 69 percent to Rs 161 million.
“The investors are gradually losing faith on the government´s ability to protect them from multiple problems plaguing the industrial sector such as labor and power shortage. It is a huge challenge for us to compete with the foreign products in domestic market amid soaring cost of production," added Murarka.
The tourism, a highly prioritized and potential sector for investment, also saw a sharp fall in new investment commitment during the review year. The fresh commitment in the sector for investment went down by whopping 34 percent, receiving just Rs 1.81 billion fresh commitment.
However, a reason to be optimistic is that the number of employment opportunities increased to 16,960 in the year from 13,727 of previous year.
On the back of slowing investment, the government is trying to get the new Special Economic Zone (SEZs) bill, Industrial Enterprises Act (IEA), Foreign Direct Investment and One Window Policy endorsed to lure more investment from foreign as well as domestic investors.