Govt to hike rent in industrial zones

government has resumed the process of increasing rent of land and building inside all 11 Industrial Estates (IEs). The government´s attempt to jack up rent had failed a few weeks ago following strong protest from industrialists.
The government has given a nod to the Industrial Estate Management Limited (IEML)--that oversees the management of industries inside the IEs--to constitute a committee, incorporating industrialists, to build a consensus on rent hike.
“Our ministry has asked the IEML to initiate talks with industrialists to get their support in this regard,” Krishna Gayawali, secretary at the Ministry of Industry (MoI), told Republica on Saturday.
Earlier, the IEML had unilaterally decided to raise rent in IEs--that house around 6,000 firms on 5,128 ropanies of land--in the range of 400 to 850 percent.
Following this, the Federation of Industries in Nepal Industrial Estates (FINIE), an umbrella body of industries operating in industrial estates across the country, led a protest.
At the same time, the industrialists also labeled the government decision a breach of the agreement between the government and industrialists reached some 15 years ago that emphasized on "bilateral understanding" prior to taking any decision on rent hikes.
As pressure intensified, the ministry directed the IEML not to enforce the decision on rent hike.
Now, the government has once again said “it has no option but to raise rent”. “That´s why we are holding consultations with industrialists,” Gayawali said.
The government, meanwhile, is also mulling over reforming the management of industrial estates to address host of complains from industrialist.
The FINIE had earlier asked the government to handover the property of all 11 industrial estates to the private sector to ensure proper management and optimal utilization of resources.
Around Rs 13 billion has so far been invested in the IEs, where more than 11,000 people are employed.

Govt to appoint directors at Birgunj Sugar

The government has decided to formally appoint board members at Birgunj Sugar Factory to resume operation of state-owned enterprise that has remained closed for the last one decade.
“The Council of Ministers has given a nod in this regard and has forwarded the proposal to its financial committee,” Yam Kumari Khatiwada, joint secretary at the Ministry of Industry (MoI), told Republica on Friday.
The MoI, which acted on recommendation laid by the factory´s ad-hoc board of directors led by Dhurba Lal Rajbansi, director general of the Department of Industry (DoI), had submitted a proposal on appointment of board members at the sugar mill to the cabinet more than a week ago.
“The new board directors will be responsible for carrying out the task of identifying the most effective way to resume operation of the sugar factory,” Khatiwada said.
According to an MoI official, the new board of directors will comprise 7 members, of which four will come from government agencies and three from the private sector.
The MoI took the step after the Public Enterprises (PE) Board gave its nod to resume operation of the factory by roping in the private sector.
“We suggested that the government resume operation of the factory but on condition of handing it over to the private sector since the government has time and again failed to run the factory smoothly,” Bimal Wagle, chairman of the PE Board, said.
The factory that was closed nine years ago still has to deal with 193 former workers who denied the government´s golden handshake offer.
“The new board of directors will also be responsible in settling this issue,” Khatiwada added.
The factory was almost liquidated by the government some nine years ago after it started incurring losses due to problems such as over-staffing and continuous shortage of raw materials, especially sugarcane.
Earlier, in 2009, the then finance minister Babu Ram Bhattarai, who is now the prime minister, declared that he wanted to see the factory running.

NEA staff to agitate against Trishuli III 'A' upgrade

Following the government´s move to upgrade the capacity of Trishuli III ´A´ from 60 to 90 megawatts, employees of Nepal Electricity Authority (NEA) have announced a month-long protest against the decision.
“We are against the government´s decision to upgrade the capacity of Trishuli III ´A´ since this will just create loss for the country and NEA will be in greater trouble,” Janardan Bhattarai, president of NEA Employees´ Association, said at a press meet organized in capital on Thursday.
All five employees´ organizations at NEA, such as NEA Employees´ Union and NEA Employees´ Association, have joined hands to protest the government´s decision.
The month-long protest program that begins Friday will comprise different types of symbolic activities in the initial days. “We will be compelled to increase the intensity of the protests if the government doesn´t roll back its decision,” Bhattarai said.
The government last week decided to increase the capacity of Trishuli III ´A´ through a meeting of the councils of ministers. The decision drew huge criticism from the oppositional parties and from experts.
The run-of-the-river project, which is being developed by Chinese contractor China Gezhouba Group Co. with a US$ 89 million soft loan from the Exim Bank of China, will not help address the power shortage in the dry season, experts claim.
“The government´s decision will just inflict additional losses on the NEA,” Bhattarai said. “This decision cannot be acceptable to us.”
According to NEA officials, the decision has only delayed completion of project.
“The government had awarded the project to China Gezhouba under the Engineering, Procurement and Construction (EPC) model,” Bhattarai said. “It was supposed to be completed by the next 15 months and people would have gotten some relief from the ongoing heafty power shortages.”
He further added that the government´s decision has delayed the project for another three years. Under the EPC model, the contractor designs the installation, procures necessary materials and builds the project.
Earlier, a writ petition was filed at the Supreme Court against the government´s decision. The SC has issued a show cause notice against Prime Minister Dr Babu Ram Bhattarai, the Prime Minister´s Office, the Ministry of Energy, NEA and China Gezhouba, among others.

2.4 MW hydro project in Mustang

Tachhar Hydro Company is developing a 2.4-MW hydropower project in Mustang with an investment of Rs 357 million.
"We are planning to develop the project with the support of locals," said Krishna Kumar Sherchan, promoter of the company, at a public hearing here on Friday. "Around 30 percent of the company´s shares will be issued to the public."
The project, estimated to be completed by 2015, will be a stepping stone for the development of different sectors, including health and education, in the northwestern district of Nepal. "So the project will contribute to overall development of the district," Sherchan said.
Locals, too, are optimistic as the project will create jobs for them.
"Locals should be getting job opportunities during the project development phase and even after its completion," Ananda Lal Sherchan, a former chairman of district development committee, said.

Japan hands over solar power plant to KUKL

Japan International Cooperation Agency (JICA) on Friday handed over 680 KW-capacity solar power plant to Kathmandu Uaptyaka Khanepani Ltd (KUKL).
The energy assistance has come at a time when the water utility company was facing difficulty in operating its deep tube well due to load-shedding. KUKL intends to sell surplus energy to Nepal Electricity Authority (NEA) by supplying it to the national grid.
“Almost one-third of power generated by the plant will be used by KUKL. Remaining will be sold to NEA,” Hari Prasad Dhakal, executive director of the Kathmandu Valley Water Supply Management Board (KVWSMB), said.
According to Dhakal, KUKL will generate revenue of Rs 3.1 million per year by selling surplus power to the NEA.
“It´s a big respite for valley denizens. Now, they would get water supplied by KUKL even during load-shedding,” Kunio Takahashi, Japanese envoy to Nepal, said in the handover ceremony organized at Dhobighat, Lalitpur.
Workers busy in fixing block at the construction site of the project of the Clean Energy by Solar Electricity Generation System on the Aid of Japan Grant in cooperation with Government of Nepal. (Photo: Bikash Karki)
Takahashi handed over the key of solar plant to Kishore Thapa, secretary at the Ministry of Urban Development (MoUD).
This is the first time solar energy has been added to national power grid.
“We are very excited about the project. It´s a good model to replicate in other parts of the country,” Rameshwor Yadav, managing director of the NEA, said.
The plant was installed at an investment of Rs 538 million.
“This is an important project from every perspective. I hope KUKL will make optimum utilization of the project,” said Takahashi.
Inaugurating the plant, Secretary Thapa, said: “The solar plant, even in the small scale, can be useful in addressing the country´s power crisis.” He also requested the private sector to replicate the model in different parts of the country.

BPC shuts Jhimruk Hydropower plant

Butwal Power Company (BPC) has decided to shut its 12 MW-capacity Jhimruk Hydropower in Pyuthan district, after locals attacked the plant inflicting loss of around Rs 60 million on the company.
The company has said it would resume power generation only after the government ensures security at the plant.
The decision means Nepal Electricity Authority (NEA) will lose 216,000 units of power a day at a time when the country is facing daily power cuts of 12-14 hours.
"Jhimruk Hydropower will remain shut until the government makes necessary security arrangement at the power plant,” Pratik M S Pradhan, vice president of BPC, said in a press meet in the capital on Wednesday. "Workers and technicians at the plant are scared; they are not in a position to resume works.”
The locals had attacked the plant after BPC decided to enforce load-shedding in the district following the direction of NEA. “We had imposed six-hour power cut in the district after NEA directed us to do so,” said Pradhan.
BPC, which is generating 21 MW of hydropower from its three plants -- Aandhikhola (9 MW), Khudi (4 MW) and Jhimruk, has also demanded strong action against the people involved in the attack. It has also sought compensation for the loss it incurred.
“The attack has deeply disturbed us,” Ranjan Lohar, CEO of BPC, said in the press meet. He further said the attack had unleashed a situation of panic among hydropower developers. "How can the government expect fresh investment in the hydropower sector when power plants are in constant fear of attacks?”
Meanwhile, Independent Power Producers´ Association Nepal (IPPAN) has condemned the attack on the power plant. "The attack on Jhimruk Hydropower is an attack against the country and its priority," IPPAN said in a statement. “It is unfortunate that the plant was attacked just because it followed the instructions of NEA.”
The association has strongly urged the government to take action against those involved in the attack and provide compensation to the company.
Additionally, IPPAN has requested the government to form a committee to look into the incident.

'Monopoly may rule roost in absence of effective monitoring'

Experts and officials have cautioned that monopoly may prevail in the market if agencies responsible for its monitoring do not carry out their jobs efficiently.
"Government agencies should be effective in insulating consumers from negative impacts of inflated prices of goods and services that mainly result from monopoly," said Dr Posh Raj Pandey, chairman of the South Asia Watch on Trade, Economics and Environment (SAWTEE), during the inaugural session of a four-day workshop on competition, promotion and market protection that kicked off in the capital on Tuesday.
"The government shouldn´t intervene in market operations, but there must be efficient mechanism and institutions to monitor the market effectively," Pandey told the workshop.
The workshop, attended by consumers, officials from monitoring institutions such as the Department of Commerce and Supplies Management, and experts, has raised issues related to weak market monitoring and its impact on people´s lives.
Commerce Secretary Lal Mani Joshi said people were being forced to pay unreasonable prices for goods and services, as the government agencies have failed to monitor the market properly.
It was an irony that the commerce secretary made such a statement as the Ministry of Commerce and Supplies (MoCS) itself is entrusted with the task of carrying out market monitoring activities through its line agencies.
The workshop, organized by SAWTEE in collaboration with the United States Agency for International Development (USAID), was organized to strengthen capacity of officials working in agencies that conduct market inspections.

Policy stability is a key to hydropower development: WB

The World Bank has said policy stability is more important than political stability for hydropower development.
"From a development perspective, political stability would of course be the ideal position. However, the critical electricity needs of the economy can not wait," reads the Hydropower Development Strategy prepared by WB.
The strategy paper that was developed by the World Bank in the request of Federation of Nepalese Chambers of Commerce and Industry (FNCCI) clearly outlines that the challenge for development of hydropower is lack of policy consistency within the political framework.
The strategy paper comes at a time when most of the major power developers have been urging the government to ensure policy consistency before signing project development agreement (PDA).
The paper also dwells on issues related implementation of hydropower projects in the country. "Political parties, donors and private sector should take their respective responsibilities to address implementation issues," the strategy paper obtained by Republica states.
The World Bank has also pinpointed the weaknesses of Nepal Electricity Authority (NEA) - the state-owned regulator of hydropower in the country. "NEA has a conflict of interest,” the paper states, adding, “NEA is both a generator in the market, a developer and the manager of the market.”
The strategy paper implicitly suggests the government to break this situation by establishing separate agencies for generation, transmission and distribution of hydropower in the country.
The government´s plan of establishing a separate transmission company has not been materialized due to unresponsive bureaucracy and hurdles created by the NEA officials.
Additionally, the strategy paper has suggested restructuring the process of doing power purchase agreements (PPAs) with developers. "Medium sized projects are dealt with on a first come first served basis and this can substantially delay the review of more attractive projects," states the strategy paper.
The strategy paper has also recommended reviewing NEA´s generation operations to assess opportunities for improvement in performance. The document, which also has outlined steps to take for short term power crisis management, argues that the government´s plan to develop thermal plants should not be given to NEA.
"The emergency thermal support should be provided through the private sector on a competitive sourcing basis rather than letting NEA to acquire its own plant," the paper highlights.

Extortion creates terror in business sector

Increasing cases of extortions, in the pretext of donations to different political parties, have created terror among the business community, which is facing tough time amid slowing economic activities in the country.
"Extortion targeted at businesspeople have gone up significantly, resembling the situation during Maoist insurgency. It is the result of gross failure of the government to maintian law and order situation," said Suraj Vaidya, president of the Federation of Nepalese Chambers of Commerce and Industry (FNCCI), while interacting with business journalists on Tuesday.
Although Vaidya did not level charges on any particular political party, he made the statement at a time when the CPN-Maoist has ramped up donation drive ahead of its 7th convention scheduled to begin on Wednesday.
"We are receiving threats from political groups at a time when we are talking about creating business favorable environment to lure investment," said Vaidya. "Ultimately, entrepreneurs are forced to give donations to different groups affiliated to political parties."
He also complained of lackadaisical attitude of the government in ending the extortion drive despite attention drawn by businesspeople on different occasions. "The government has become so weak it has failed to control the high-handedness of political parties," he added.
Pashupati Murarka, vice president of the FNCCI, also said extortion has emerged as a major obstacle to doing business in the country.
"We have lost hopes as we did during the Maoist conflict when we were haplessly falling victims to extortion," said Murarka.
Business leaders also questioned the significance of the Nepal Investment Year 2012/13 announced by the government given the worsening business climate.
"Investment environment in the country has worsened despite government´s announcement to lure both domestic and foreign investment to mark the Investment Year 2012/13," said Vaidya.
Vaidya also made it clear that the Nepali business community was keen on increasing investment in the country provided that the government created favorable environment for investment.
"We want to invest. That´s why we have long been asking the government to create a favorable environment by maintaining law and order situation," Vaidya said.
Business leaders speaking on the occasion also blamed acute power shortage, lack of government´s long-term strategy on economic issues and labor unrest for deepening problems. They also said political parties were not serious about the minimum economic agenda proposed by the private sector which was expected to pace up economic activities even during political instability.
BOX
Renewal of transit treaty criticized
The private sector has condemned the government for renewing the Nepal-India Transit Treaty without incorporating new provisions that would have facilitated Nepal´s international trade.
The Ministry of Commerce and Supplies (MoCS) recently renewed the treaty in its existing form as the Ministry of Foreign Affairs (MoFA) disagreed incorporation of new provisions, including introduction of additional lock system for Nepal-bound containers carrying third-country imports.
"We are saddened that the government renewed bilateral transit treaty without making any change to existing provisions," Suraj Vaidya, president of the Federation of Nepalese Chambers of Commerce and Industry (FNCCI), said.
He informed that the private sector had anticipated changes to bring into operation Vishakhapatnam port and additional transit routes for overseas trade.
The Nepal-India Transit Treaty is renewed automatically if existing provisions are not amended.

Private sector condemns attack on NBA president

Private sector umbrella organizations have condemned the attack on Rajan Singh Bhandari, president of Nepal Bankers´ Association (NBA) and CEO of Citizens Bank International, by an unidentified group.
Bhandari was attacked on Monday evening while returning home from office.
The Federation of Nepalese Chambers of Commerce and Industry (FNCCI), the apex body of the private sector, the Confederation of Nepalese Industries, an umbrella organization of domestic industries, and Citizens Bank have all criticized the attack.
"The attack on Bhandari is a ploy against the private sector and professionals. This has created fear in the society," Suraj Vaidya, president of the FNCCI, said, interacting with business journalists on Tuesday. "We are deeply moved by the government´s inefficiency in maintaining law and order situation, and activities of political parties have disappointed us.”
The CNI, issuing a press release, said that the attack on Bhandari was a planned act. "This attack was aimed at destabilizing the banking sector of the country, which is in a better shape than other industries," read the statement.

• Unidentified gang attacks NBA president

CNI has also appealed to the government to identify people involved in the attack as soon as possible and take action against them.
"These types of violent activities set a bad precedent and pollutes work environment," said the statement.
Citizens Bank, in which Bhandari is serving as the CEO, said the attack on a professional banker has created fear in the banking sector.
"We request the government to punish the guilty as soon as possible," said the release that was issued following a meeting of the bank´s board of directors.

CPN-Maoist affiliated workers vandalize Labor Office

Employees affiliated to the CPN-Maoist working at Agriculture Development Bank Limited (ADBL) ransacked the Labor Office of Bagmati Zone and manhandled officials, who denied registering a trade union on Tuesday.
"Around Rs 1.5 million worth of property was damaged in the attack," said Mani Nath Gop, chief of the Labor Office located in Teku, Kathmandu. More than 200 workers were involved in the vandalism.
“They ransacked our office and manhandled us after we requested them to follow due process to get their trade union registered,” said Gop.
According to him, office computers, printers, furniture and other properties were damaged in the attack.
The Kathmandu Metropolitan Police Range Office (KMPRO) has arrested seven people allegedly involved in the attack.
A press statement issued by the KMPRO states Min Bahadur Pandit, Nanda Budha, and Sudin Khanal as those rounded up.
Workers claimed the incident took place after police intervened in negotiations between officials and those who came to register the trade union.
"The official line of our party is not to attack office and people. But the government created the situation for this to happen," Ram Dip Acharya, chairman of the Nepal Trade Union Federation (Revolutionary) affiliated to CPN-Maoist told Republica over phone.

Terms and conditions of Tanahun Hydro to be finalized this month

The government is finalizing terms and conditions with Asian Development Bank (ADB) and Japan International Cooperation Agency (JICA) for the development of Tanahun Hydro (140 MW) - the second largest storage-type hydropower project in the country -- in the third week of January.
According to a highly place government official, officials of Ministry of Finance (MoF), ADB and JICA are holding a meeting on January 24 to finalize terms and condition for the development of the national pride project.
Confirming the development, Madhu Kumar Marasini, joint secretary and chief of Foreign Aid Coordination Division under the MoF, said the meeting would be crucial in sealing the deal between the government and development partners for taking the project forward.
“The meeting will finalize most of the terms and conditions associated with the project,” said Marasini.
ADB, JICA and European Investment Bank (EIB) have pledged soft loan to finance the project which was previously known as Upper Seti Hydropower Project.
According to the information posted on the websites of these three donors, JICA, ADB and EIB have pledged US$ 180 million, $150 million and $63 million, respectively, to develop the project.
As per the revised calculation, the project is estimated to cost $450 million.
If the construction of the project begins as planned in 2014, the project, which is based in Byas Municipality, will begin power generation by 2020.
Nepal Electricity Authority (NEA) will implement the project with the soft loans of three development partners. According to the project document, NEA will be the majority shareholder in the company -- Tanahun Hydropower Company Ltd - that has been formed to implement the project.
“It is still uncertain how much stake will NEA hold in the project,” Sher Singh Bhat, spokesperson for NEA, told Republica. “The details of shareholding will be finalized once the government signs the deal with the development partners.”
Separate teams from ADB and JICA had visited Nepal couple of months ago to study the project. Members of the teams also held preliminary discussions with the concerned officials.
Thierry de Longuemar, vice president for finance and administrator of ADB, during his visit to Nepal in November 2012, had stressed the need to develop more hydropower projects in Nepal.

Govt to prepare database of women entrepreneurs

When the government announced a slew of packages for women entrepreneurs in 2010, it received accolades from the business community. Buoyed by the response, the government even went on to announce that it would be more gender-sensitive while promoting the private sector.
Consequently, Industrial Policy-2010 laid down a special provision that promised establishment of a separate cell to facilitate women entrepreneurs and industrialists. It also expressed commitment to promote them through wide range of special programs and packages.
The Ministry of Industry (MoI) then went a step further and announced that it would annually felicitate a woman entrepreneur for outstanding performance.
Two years down the line, it has become apparent that these programs were announced without due exercise. So much so, it has also become clear the government does not even have a simple record of active women entrepreneurs in the country.
“No wonder, all these promises and commitment to recognize women entrepreneurs remained unimplemented,” an MoI official said acknowledging the realty.
But the good news is that the government has finally realized its weakness and has taken a step forward to develop a ground to implement the said programs.
"The ministry is now developing a database of the country´s women entrepreneurs," Bishnu Dhakal, under secretary at the ministry, told Republica. "The programs and plans that focus on women entrepreneurs will be effectively implemented once we know their actual status."
According to Dhakal, the ministry has formed a task force at the Industrial Promotion Division. "The task force is collecting data from all 75 districts in the country," Dhakal said. The task force is directly communicating with district level offices of the Department of Cottage and Small Industries in all districts to compile information on the country´s women entrepreneurs.
Additionally, the ministry has decided to use that database to provide special facilities to women entrepreneurs. "We will be able to identify the outstanding women entrepreneurs in the country through that database," Dhakal said.
Meanwhile, the ministry is also developing a database to figure out the total capital investment made by women in the industrial sector and number of jobs they have generated.