Govt hands over 14 mega projects to Investment Board

The government on Saturday handed over 14 mega projects tagged as National Pride Projects to the Investment Board for their speedy implementation.
It also endorsed the long-pending regulations of the board to allow it to recruit required manpower, set up office and lay down appropriate norms so that interested investors could directly approach it by following the stipulated rules.
Projects that have been handed over to the board include hydropower projects like West Seti (750 MW), Upper Karnali (900 MW), Upper Marsyangdi (600 MW), Tamakoshi - III (650 MW) and Arun - III (900 MW). The board has also been tasked to oversee the much-talked 76-km Kathmandu-Tarai fast track, Nijgadh international airport project, Metro Railway in Kathmandu and the project to upgrade Tribhuvan International Airport.
Likewise, the board has also been asked to oversee various highways along North-South corridor, Kathmandu Waste Management Project, Chemical Fertilizer Plant Project, Nepal Infrastructure Bank and establishment of star hotels on government land.
A meeting of the board held earlier in the day which was chaired by Prime Minister Baburam Bhattarai also passed the Investment Board Regulations, which will allow the board to get a full shape.
The regulations provide a detailed framework for smooth functioning of the board.
Until now, the board´s office was limited to a single room at the Prime Minister´s Office. But soon it will have two offices in the future, said a senior IB official.
According to a member of the board, who preferred to remain anonymous, the board will have one office on the premises of Singha Durbar and another outside. "The aim of establishing two offices is to speed up the work and reduce accessibility hassles for international investors," the member said.
The board, which is supposed to carry out the government´s ambitious plan of bringing in foreign investment worth 1 billion US dollars within the first half of the fiscal year 2012/13, will soon start screening investors who have already approached IB.
"West Seti, Upper Karnali and Arun-III hydropower and Kathmandu-Terai fast track are the projects which will soon find investors as well see speedy work," the board member told Republica.
However, project such as Kathmandu Waste Management, Chemical Fertilizer Plant and North South Corridor will have to wait for some time, the board member added.
The government has announced the year 2012/13 as Investment Year.
Radesh Pant, the board´s chief executive officer, talking to Republica after getting the responsibility of executing the 14 mega projects, said, "We will have to move fast along with sound coordination with all the line ministries and stakeholders."

Global map to show Nepali dry ports

Nepali dry ports will soon be visible in the global map of United Nations so that importers and exporters from any part of the world can figure out the origin or destination ports of their cargos or goods.
Government is preparing to register Nepali dry ports with the United Nations Economic Commission for Europe (UNECE). The dry ports, which have been operational since the early 2000s are still not listed in the global map. “Our dry ports will be visible in the global map once we register them with the UNECE,” Sarad Bikram Rana, president of Nepal Intermodal Transport Development Board told Republica on Saturday.
Once registered the dry ports will be assigned codes. “In order to register them with the global map of the UNECE, they should first be registered in the national government authority,” Rana elaborated on the government´s preparation for a Dry Port Registration Regulation (DPRR). Ministry of Commerce and Supply is preparing to endorse DPRR which will give them code recognized by UNECE.
“We were facing problems since our dry ports were nowhere in the global map,” Rana explained, “This will not be the situation anymore. Anyone who wants to dispatch cargos and goods can easily locate the dry ports where they want to send and vice versa.” Currently exporters who trade with Nepal, use the location of Calcutta port.
Dry ports in Birgunj, Biratnagar and Bhairahawa were developed under the government´s Nepal Multimodal Transit and Trade Facilitation Project (NMTTFP) with an estimated total cost of US$ 28.5 million, which include US$ 23.5 million credit from the World Bank and US$ 5.0 million from the government. The project was initiated in 1998 to construct rail based inland containers depots (ICD) in Birgunj and road based ICDs in Biratnagar and Bhairahawa.
In addition, the government has recently signed a memorandum of understanding with China to develop a dry port in Larcha, Tatopani. Similarly, it is working on a feasibility study to develope dry port in Chandani-Dodhara.
“After endorsing the DPRR, there would be a proper guidance as well for the management of ICDs,” Himal Thapa, under secretary of the MoCS said.

Nepal ranks 124th in ETI

Enabling Trade Index (ETI) -2012 has ranked Nepal in the 124th position with foreign trade environment in the country deteriorating over the last two years.
The ETI ranking is based on indices such as access to domestic and foreign markets, efficiency of customs administration, efficiency of export-import procedure, transparency of border administration and availability and quality of transport services, among others.
World Economic Forum (WEF), which develops the ETI, had ranked Nepal in 118th position in 2010. The ETI has ranked Singapore in the first position. This report has been made public following the release of World Bank’s trading logistics report a couple of weeks ago.
The Global Trade Enabling Report 2012, which has prepared the ETI on the basis of 9 pillars, has ranked Nepal in the 106th position in terms of access to domestic and foreign markets, 121st in terms of customs administration efficiency, 118th in efficiency of import and export procedure, 126th in transparency of border administration, 124th in availability and quality of transport services and 129th in physical security.
The report has also listed problematic factors affecting import and export. Inappropriate production technology and skills, failure to identify potential markets and buyers meet quality/quantity requirements of buyers are the first three major barriers for Nepal´s export growth.
Though Nepal´s import has surpassed the export volume, the report has outlined burdensome import procedures, tariff and non-tariff barriers and corruption on the border as the major problems facing imports.
Nepal ranked in the 118th position in ETI -2010. WEF has also added seven other countries -- Angola, Haiti, Iran, Lebanon, Moldova, Rwanda and Yemen -- in the report.
Other South Asian countries such as India, Bangladesh and Pakistan also have lost their previous positions and have been ranked in the 109th, 113rd and 116th position respectively.

Overcoming obstacles

DECLINING EXPORTS TO CHINA

Despite a huge potential market in China, Nepal’s exports to the country have been on a continuous decline for a decade. Nepal has also failed to capitalize on the preferential treatment provided to 4,721 exportable items in 2010. But why is Nepal’s export to China far lower vis-a-vis global export growth? I believe it is the country’s inability to consistently follow up on and implement agreements signed during multiple bilateral meetings between Nepal and China.
The two countries have signed more than half a dozen bilateral agreements since 1981. The Trade and Payment Agreement (TPA) signed on November 22, 1981 in Kathmandu was the first after Nepal recognized the sovereignty of China over Tibet in 1956. Since, the two countries have inked other bilateral treaties related to trade and transit such as the Bilateral Road Transportation (BRT) in 1994, Trade and Other Related Matters between Nepal and TAR in 2002, Agreement of Cooperation for Industrial product Inspection between General Administration Quality Supervision, Inspection and Quarantine of the People’s Republic of China and Nepal Bureau of Standards and Metrology in 2005. In 2009, Nepal and China agreed to establish an inter-governmental committee called Nepal-China’s Tibet Trade Facilitation Committee. Additionally, in 2010 the two countries signed Letters of Exchange (LoE) granting special preferential tariff-treatment to certain goods originating in Nepal and exported to China.

On the surface, the low volume of export to China can be attributed to two broad two reasons: one, supply-side constraints and two, problems related to productivity levels and administrative capacity and bureaucracy. Inadequate transportation, scarcity of customs capacity, long administrative process, lack of credit facility, absence of dry port and language and payment issues are hurdles to smooth trade between the two countries. Constantly declining exports to China and mounting imports from the northern neighbor have resulted in a mammoth trade deficit of Rs 45 billion in 2010/11.
Trade is the most viable means for development because it provides incentives and benefits to both the parties. Though China has agreed to support Nepal in encouraging, supporting and establishing payments through banks by a letter of credit in the Agreement on Trade and other Related Matters 2002, Nepal has failed to take full advantage of this and other such concessions. China’s dissatisfaction with Nepali laboratories’ certificates is also considered a major barrier to exports. But what about the Agreement of Cooperation for Industrial Product Inspection (ACIPI) 2005, which has an explicit clause that establishes mutual recognition of inspection certificates? Not just that, China has even agreed to assist Nepal in establishing laboratories with rich technology. Then why does our government not consistently follow up with China for implementation of these agreements?
Some reports claim that China hinders exports from Nepal by creating non-tariff barriers. The government should constantly follow up with its Chinese counterpart to get to the bottom of the matter and clarify all such issues. Let’s take an example, which explicitly demonstrates how the government’s lethargy contributes to low exports to China. China agreed to finance the development of a dry-port in Larcha, Tatopani. However, Nepal has been reluctant to break the transport syndicate that is dampening all such prospects. Breaking the transport syndicate on the Araniko highway is the first step towards utilizing the dry-port.
The bleak scenario of Nepal’s scant trade with China compared to its global trade points to other factors as well. The production capacity of the country is a major issue to be addressed but as we know, it takes years to strengthen this. What the government can do right away is address the problems faced by Nepali exporters in the border areas and in transportation sector. But it calls for strong will at both diplomatic and bureaucratic levels. Nepali bureaucracy is so weak that it can’t even ensure effective and timely implementation of agreements at the political level.
Nepal’s widening trade deficit at the global level may be attributed to its unstable macro-economic situation, shortage of power, limited production capacity and geographical constraints, among others. Problems with export to India and other Third World countries arise of our limited access to sea ports and hurdles caused by Indian and other customs. However, there is ample room to improve the trade with China, or at least ease the complications. In 2001-02, Nepal exported goods worth of Rs 1.1 billion and imported goods worth Rs 11.2 billion. Ten years down the line, in 2010-11, export to China is just Rs 925 million whereas imports have reached Rs 46.6 billion. Declining exports and mounting imports leading to a massive trade deficit is a stark measure of government inefficiency.

At the root of Nepal’s trade growing deficit with China is government’s inability to consistently follow up on and implement past agreements.

There is a pressing need to immediately list goods in which Nepal has comparative edge. A concrete study to identify these goods that have a high demand in China with low competition from other countries should be carried out as soon as possible. The products that are listed in the Nepal Trade Integration Strategy (NTIS), 2010 are losing their competitiveness in the Chinese market. For instance, goods like ginger, lentils and medicinal herbs are no longer as competitive as they used to be; we need to draw up a fresh list of exportable goods
It is also important to constantly engage in productive talks with China in order to keep the trade environment conducive. For instance, the Trade and Payment Agreement, 1981 has provided for an implementation and dispute settlement body. Under this provision, both the countries can meet at any a given time to resolve issues concerning trade and transit arena on the request of the two countries. However, no such efforts have been made till date.
Effective implementation of already agreed plans should be the first priority for Nepal. There is no doubt that the private sector has an integral role to play, in that it can produce high quality goods for the Chinese market, while the government should also look to remove supply-side constraints in the long term. However, that cannot be an excuse for the government not to take immediate steps.

Industrial production down 50%

As lack of movement of vehicles due to bandas sparked shortage of industrial raw materials, entrepreneurs, mainly exporters, said their productions have been badly hit and presently gone down by over 50 percent.
Worse is, exporters said the garment industry, which was gradually building its lost reputation in the international market, has once again stopped getting orders. "The production has been affected by series of bandas called by various groups," Udaya Raj Pandey, president of the Garment Association Nepal (GAN), told Republica on Tuesday.
According to Pandey, readymade garments (RMG) production has gone down by around 50 percent lately due to lack of raw materials. "Because of this, some of the factories have already suspended production."
The industry, which was exporting RMG worth around Rs 5 billion per year over the past three years, has also lost credibility in the international market. "It seems we would lose deals worth Rs 1.5 billion due to bandas, as we have failed to deliver consignments on time," Pandey added.
Similarly, carpet industry, which is one of the country´s major export items, has seen production go down by as much as 80 percent. According to Ram Gurung, vice-president of the Nepal Carpet Exporters´ Association (NCEA), most of the carpet factories are closed due to banda. Carpet industry produces 2,000 meters of carpet per day when the situation is normal.
According to our Biratnagar correspondent Ajit Tiwari, most of the factories in the Morang-Sunsari corridor have suspended operations due to severe scarcity of raw materials. Cargo trucks carrying raw materials from India have been stranded in the yard of Biratnagar Customs Office.
Meanwhile, industrialists in Morang-Sunsari corridor have submitted a memorandum to customs officials, requesting them to waive off detention charge on parked cargo vehicles. The customs office charges as much as Rs 2,500 per day on vehicles parked in the yard of customs office.
According to industrialists, thousands of cargo vehicles are stranded at Tatopani, Biratnagar and Birgunj customs for the past few days.
As many as 428 cargo trucks are lying stranded at Birgunj Inland Container Depot. The number of trucks stranded at the depot was 390 on Monday.
“Goods imported from Bangladesh are lying at Banglabanda land port," Rajan Sharma, president of the Nepal Freight Forwarders´ Association (NFFA), said. "Officials from Bangladesh Freight Forwarders´ Association have communicated us about the situation there. But the problem is that the Banglabanda land port doesn´t have adequate space for parking additional cargo vehicles.”
(With inputs from Ritesh Tripathi in Birgunj.)

Banda affects movement of cargo from customs points

Around a thousand vehicles carrying essential goods are stranded in the northern and southern border areas of the country due to bandas called by various groups, compelling importers to pay extra cost, which will eventually be transferred to consumers.
Cargo trucks are currently lying in the yard of Biratnagar Customs Office. Trucks that are carrying raw material for industries, mainly located in the Morang-Sunsari industrial corridor, and fast moving consumer goods, are currently stuck in the customs office since the last five days, Binod Kunwar, chief of customs office, told Republica on Monday.
Similarly, imports from China have come to a complete halt and more than 60 containers are stranded in the yard of Tatopani Customs Office, while around 350 empty-containers are in the Birgunj inland containers depot (ICD). The containers that are stranded in the Birgunj ICD had brought iron, feeds and fast moving consumer goods.
“The empty containers which are on the property of Indian shipping companies charge US$14 per day,” Rajan Sharma, president of Nepal Freight Forwarders´ Association (NFFA), told Republica.
Similarly, goods such as summer apparels and cosmetics that are imported from China are stuck in the Tatopani Customs Office. “More than a dozen containers are lying in the Tibetan territory of China,” said officials at the Tatopani customs.
Importers, such as Arjun Sapkota, fear agricultural products, like fruits, imported from China might be ruined if they are not taken to the market in time.
Abhinas Bohara, president of the Morang Merchants´ Association (MMA), said many industries are on the verge of closure due to scarcity of raw materials. According to local importers, they have to pay detention charge of up to Rs 2,500 per day to customs office in case their vehicles have to be parked in the yard of the office.
“The whole cost that occurs due to delay in the transporting goods will ultimately be transferred to customers,” Sharma said.
(With reports from Dhurba Dangal from Sindhupalchwok, Ritesh Tripathi from Birgunj and Khila Nath Dhakal from Biratnagar.)

Pvt sector to hold rally for peace, harmony

The business community under the aegis of Federation of Nepalese Chambers of Commerce and Industry (FNCCI) is organizing a candle light rally on Wednesday calling on the people for peace and national harmony.
The organization said the peace assembly will be held at Basantapur Durbar Square during which the private sector will request all political and non-poliitcal groups to shun violence and refrain from calling general strikes.
FNCCI has joined hands with organizations of different sectors, such as hotel, education, media, health, human rights and I/NGOs for the event. It has asked all participants to wear white and carry with a candle and a national flag.
“The assembly is for peace, harmony and prosperity,” Bhaskar Raj Rajkarnikar, acting president of the FNCCI told media persons on Monday, “We are neither in the favor or against any groups. We are against the culture of bandas and violence.” Fiercely condemning the random attacks on media persons and vehicles of different media houses on Sunday and Monday by Nepal Federation of Indigenous Nationalities (NEFIN), Rajkarnikar said, “We oppose every kind of bandas.”
The assembly, which will start at the durbar square at 5:00 pm on Wednesday, is the joint effort of Nepal Chamber of Commerce, Lalitpur Chamber of Commerce and Industry, Bhaktapur Chamber of Commerce and Industry, all the 82 commodity associations, associate member organizations of FNCCI, Nepal Federation of Cottage and Small Industries, Higher Secondary School´s Association Nepal, human right organizations, engineers association, medical association, hotel associations and other organizations working in the public and private sector.
“There will be no slogans and banners of any organizations,” Rajkarnikar explained the nature of the assembly. “This is our endeavor to preserve the national harmony and establish peace in times of nation-wide tension due to violence.” The mood of the nation is going downward where we might end up with nothing in hand at the time of promulgating new constitution in the country, added Rajkarnikar.
FNCCI said banda and violent strikes will serve no one´s interest, rather inflicted a huge loss to general public, wage earners as well as businesses. “At this juncture, we don´t want to calculate our business in numbers,” Rajkarnikar said, “This is the time for national consensus and peace.” He further added that the new constitution should be promulgated on time and the country must move forward according to recent political commitments.

'Country specific measures to lure foreign investment'

The government, which is reviewing the existing Foreign Direct Investment (FDI) Policy 1992 through a team of experts, will soon start developing different investment framework for different countries, as the single policy model failed to attract foreign investors to the country.
The 4-member team of experts, which is working under the leadership of Keshav Acharya, former senior advisor of the Ministry of Finance (MoF), made the recommendation after reviewing the FDI Policy 1992. We have recommended the government to be country-centric in order to attract foreign investmet," Acharya shared with Republica about the review and recommendations of the team. "We shouldn´t put all the investors in the same basket."
Giving an example of difference between investors from India and other third country, Acharya suggested "We have to treat them in different grounds. For instance, Indian investors might not give priority to issues that other countries´ investors are pushing for due to the pegged exchange rate between two countries." Similarly, the team has suggested the government treat Chinese investors in a different manner.
However, this does not mean there would not be one FDI policy. "The country will have one FDI policy but the government can have one-to-one bilateral understanding and sign agreements with each country and make different arrangements for different investors. According to Department of Industry (DoI), there are around 80 countries which are interested to invest in Nepal. "We have to prioritize them and have to deal with them on one-on-one basis," Acharya said.
In that direction, the team has suggested two ways for foreign investors´ entrance in the country - automatic and government approved. the first one will let foreign investors to come without any registration procedure whereas the second one will lead investors to go through the process of application and registration. "Investors who come here with investment and use domestic raw material and labor, those who invest in technology transfer and establish companies which process and export Nepali production can come through the automatic way," Acharya said.
Unlike in the existing FDI policy of the country, the team has floated an idea to allow the investors through the automatic way if they come with convertible currency to make investment here.
Moreover, the review team has said that the ceiling amount of money to be known as FDI should be changed. The existing policy recognizes more than USD 20,000 of investment as FDI and government provides multiple facilities to the investors who bring in more than USD 100,000 as investment. "We have to look for bigger investment," Acharya said, "That is why there should be increment in the ceiling of the amount that is counted as FDI."
In order to make services functional and timely, the team also has suggested government to a establish body to which investors can complain if they don´t get the instant service“. "There should be a prime ministerial level body that listens to the grievances of investors if they don´t get services in time," Acharya said.

Chicken consumption down 33 percent in Ktm valley

Consumption of chicken in the capital has come down as banda affected normal lives of people and banda enforcers forced restaurants and hotels - major consumers of chicken -- to shut down their business.
Daily consumption of chicken in the capital hovers around 250,000 kg. According to Jung Bahadur GC, president of the National Chicken Sellers´ Association (NCSA), daily consumption has come down by as much as 33 percent due to banda.
“Demand from major markets has slowed due to banda and other forms of strikes called by various groups over the past few days,” GC said, adding, “If the situation remained the same for coming few days, farmers will have no option but to dump their chicken ready for market.” GC also said chicken sales also dropped due to drop in daily wage earners´ income owing to banda.
According to the association, hotel and restaurants consume 40 percent of total chicken sales in the capital.
“Drop in sales has directly affected poultry farmers. They have already started dumping chicks due to shortage of feed,” GC said, adding that series of banda over the past week has disrupted transportation of feed and other inputs.
“We can´t store feed in warehouse for more than 15 days,” GC said. “Many poultry farmers have expressed worries about shortage of feed in their farms.”
Price of chicken, however, has increased despite decline in consumption. Last week, poultry entrepreneurs raised chicken price by 8.3 percent to Rs 260 per kg.

FNCCI condemns banda, attack on media

The Federation of Nepalese Chambers of Commerce and Industry (FNCCI), a leading umbrealla body of the private sector, has condemned the banda called by various groups that has hugely affected daily lives of people. It has also condemned the attack on media personnel and vehicles of press.
"These kind of banda delays the constitution-writing process and its promulgation in time," reads an FNCCI statement issued on Sunday. "FNCCI denounces the proclivity of banda and expresses a grave concern."
Additionally, the FNCCI has criticized rampant attacks on press, amubulance and private vehicles in different parts of the country, including Kathmandu, on Sunday.
The FNCCI, which has initiatied a peace campaign, has appealed to all groups to resort to peaceful means while fighting for their rights.
"Calling banda and disrupting people´s lives are irresponsible behaviors of those who are fighting for a cause," reads the release. "We challenge all groups and parties to make public what they have achieved by calling banda and vandalizing the property in the name of fighting for their rights."

Fast track to get investors soon

The government has decided to initiate process within a month to find investors for the construction of 76-km Kathmandu-Tarai fast-track road that connects Kathmandu and Terai.
A high-level infrastructure development committee headed by Vice Chairman of National Planning Commission (NPC) Dipendra Bahadur Kshetry took the decision on Thursday.
Following the decision, Ministry of Physical Planning and Works (MoPPW), which is executing this national-priority project, said that it would publish a global notice seeking letter of interest (LoI) from all interested investors for the construction of the expressway within a month.
Though the bid will seek LoI from both international and domestic investors, officials said there will be some special provisions in the favor of domestic investors. They, however, refused to disclose what that would be.
As announced in the past, the fast track would be built under built-own-operate and-transfer (BOOT), said Kshetry. What this means is investors putting in money in the project will operate the expressway for up to 30 years, depending on the contract that it will have with the government, and hand it over to the government after that.
Kathmandu-Tarai fast track is one of the ´national pride projects´ under which the government has announced of the construction of a six-lane highway, sharply reducing travel distance between Kathmandu and Nijgadh section of East-West Highway.
“Investors willing to develop and operate the project will be asked to submit their technical plan and cost details,” said an official at MoPPW. The bid will, thus, make clear how much cost would it need to develop the fast track. Earlier, Asian Development Bank that conducted its feasibility study in 2008 had projected the construction cost could stand at around Rs 67 billion.
More important than the investment amount, the bid will disclose how the international investors respond to the project, enabling the government to know possibility of adopting similar modality for infrastructure development in the future.
Based on the applications received from the interested parties, government will select investor for fast track road through a competitive bidding process, allowing it to execute the project under the BOOT Act, 2006.
Though the high-level steering committee decided to speed up the process of selecting the investor, MoPPW has so far finished the track opening of 51 kilometers only. But officials said they will complete the track opening of another 17 kilometers soon.
“Opening track of 68 kilometers is not a problem because we have already reached an agreement with the locals for land acquisition,” said the MoPPW source.
However, the Ministry has faced difficulty to acquire land for 8-km stretch of the highway in Khokana area of Lalitpur district as locals have demanded huge compensation.
In order to skip the liability, Kshetry said the committee has already instructed the Ministry to look for other alternative alignment. “Once that is finalized, the track opening process will be complete. We are hoping to attain that soon,” he told republica.

Govt changes tack against political pressure

The government has decided to adopt a new policy on bridge constructions, under which it will soon segregate the total demand for construction of bridges under different categories and prioritize only bridges that are genuinely important and needed. 

The new initiative has been taken mainly because the haphazard construction of local roads in different election constituencies in the interest of politicial leaders started generating pressure on the government to build bridges on such roads as well. 

"Given the soaring demand for construction of bridges on such politically-inspired roads, we are neither able to focus properly on the construction of strategic and significant bridges nor ensure that the budget allocated for bridges is used meaningfully," said a source at the Ministry of Physical Planning and Works (MoPPW). 

Given such a situation, the government had decided to adopt a more efficient Bridge Management System (BMS) for the prioritization of bridge constructions. With support from the World Bank it has already developed software for BMS, which will rank all the demands for bridges received from different parts of the country after analyzing the ground realities and strategic importance. 

"BSM is advanced technology. It will help us prioritize the necessity of bridges in any given area," Krityanand Thakur, project chief at the Bridge Project at the Department of Roads (DoR), told Republica. He added that it will for the first time establish a standard assessment and prioritization system in the country. 

Adoption of the new system will enable DoR to systematically handle undue pressure coming from political leaders to construct bridges in their own constituencies. If their needs prove genuine, their requests will be picked up, otherwise not.

"We were compelled to use 75 percent of the total budget for bridge projects allocated this year to implement projects that political leaders pressed for," said the same source, indicating that only 25 percent of about Rs 4.6 billion that MoPPW spent so far has gone into the construction of important bridges.

Officials said they are planning to implement the new system from the upcoming fiscal year. However, MoPPW will be able to implement its decision only if the government and the World Bank ink a roads project agreement within this fiscal year. "The World Bank has agreed to provide from next fiscal year a certain percent of the total required cost for the construction of bridges that fall within the national strategic road network," Thakur said. 

In order to avoid undue political pressure, which dilutes DoR´s focus, the government has also decided to task it only with the development of bridges in the national strategic road network. "DoR will not be handling bridges on local roads that have just been laid out in different electoral constituencies," Thakur said.

GEF to provide USD 8.3 million

Global Environment Facility (GEF) has committed to provide USD 8.3 million to Nepal in order to execute its proposed programs to conserve bio-diversity and resist climate change effects. 

According to a press statement issued by the finance ministry, “Lal Shankar Ghimire, joint secretary at the finance ministry shared the commitment that came from GEF at the sixth constituency meeting of South Asia Group of GEF held this week in Male, Maldives,” reads the release. [beak]

The meeting focused on issues related to progress made in areas of climate change and bio-diversity by the member countries and was chaired by finance secretary Krishna Hari Baskota. All the member countries had shared their progress report at the meeting. 

Sri Lanka, Bangladesh, Bhutan, Maldives, India and Nepal are only the member countries of the Group from South Asia. GEF, which was established in 1991, works in range of issues including climate change, land degradation, bio-diversity, waters and sustainable forest management among others.

Performance of bridge project exceeds recent records

Ministry of Physical Planning and Works (MoPPW) might have failed to gear up roads and railway project, but its performance on bridge construction this year has well exceeded recent years´ records.

Records at the ministry show, Department of Roads (DoR) that executes bridge projects has already completed 50 bridges on the national strategic road network, and works on 350 other bridges that are under construction is also moving at a good pace. 

“In fact, its performance has been so good that it has already spent Rs 2 billion allocated for the construction and maintenance of bridges, and has placed a demand for additional Rs 2.6 billion for settling payment of contractors,” said an official of the Ministry of Finance (MoF). 

Under the annual budgetary program, the government had assigned MoPPW to handle the construction and maintenance of 400 bridges, including 100 bridges on the national strategic road network and 300 bridges on newly expanded roads, mainly in rural areas.

Of them, Karnali Bridge, Benighat Bridge, Rato River Bridge in Siraha, Pathraiya Bridge in Kailali district, Bahuligat Bridge in Bajhang district, Budikulo Bridge in Bardiya district and Bhusunde Khola Bridge in Gorkha are major projects of strategic importance.

“We have already achieved 50 percent of the task, completing 50 bridges along national strategic road network. Construction works in the remaining projects too are going on at a good pace,” said Krityanand Thakur, project chief of the Bridge Project at the DoR.

What troubles the department and MoPPW now is the lack of budget. As the pace of bridge constructions, which were started since last few years, exceeded the government´s anticipation, the payment liability has far exceeded the amount that MoF allocated for the purpose. 

“Even after spending the allocated Rs 2 billion, we still owe Rs 2.60 billion to the contractors,” Tulsi Prasad Sitaula, secretary of the MoPPW, told Republica.

The Ministry has already apprised MoF of the situation and requested it for the release of additional amount within this fiscal year. “MoF officials have verbally agreed to release the fund,” said Sitaula.

However, other officials at MoPPW said they are skeptic over MoF releasing the promised amount. “We have received informal information that MoF is planning to release us just Rs 1 billion in this fiscal year,” said a source.

Of the 400 bridges handled by the DoR, 340 were projects carried forward from the previous year, while 60 were the newly initiated projects.

“Though we lagged behind on performances of national priority projects, spending on bridge projects have been outstanding,” Sitaula said, adding, “Hopefully, MoF will respond positively to our request so that we could continue the momentum of construction works.” 

According to MoPPW, it would need a total of Rs 22 billion to complete the construction of all the planned bridge projects.

Agricultural production up 9.8%

The overall production of major crops, such as paddy, maize and wheat, has gone up this fiscal year, despite the inability of the government to distribute adequate chemical fertilizers and seeds of cereal crops to farmers in time.

According to the latest statistics released by the Ministry of Agriculture and Cooperatives (MoAC), the total production of major crops is estimated to go up by 9.8 percent and reach 9.45 million tons in the current fiscal year. 

However, the total contribution of cereal crops in the agricultural gross domestic production (AGDP) will post a decline, as the weightage of horticulture in the AGDP basket has gone up to 38.16 percent in the current fiscal year, while contribution of cereal crops has fallen by 8.36 percentage points to 28 percent, Dr Hari Dahal, joint secretary of MoAC, told media persons on Tuesday. 

Dr Dahal, acknowledging shortage of chemical fertilizers and seeds as primary factors that restricted cereal crops production, said: "The timely monsoon and favorable climate were the major reasons that contributed to the growth." This was achieved despite fuel and electricity shortage faced by farmers in the Tarai region and adverse weather condition induced by factors such as hailstorms.

MoAC estimates show that paddy production will go up by 13.7 percent in the current fiscal year to reach 5.07 million tons. Similarly, the production of maize will also rise by 5.4 percent to hit 2.17 million tons. However, the maize production growth rate will be lower this fiscal year compared to that of last year when growth rate was recorded at 11.45 percent.

Production of wheat - seeds of which are distributed by the government - will also rise by 5.7 percent to reach 1.84 million tons. The wheat production growth rate is also expected to go down this year compared with that of last year´s 12.16 percent. 

Despite the rise in agricultural output, the worrisome condition is that farmers have not been able to reap its benefit. 

"The prices of crops and food also have not increased in proportion with the production output," Dr Dahal said, blaming "middlemen for not letting the benefit of higher agricultural production trickle down to farmers"

FNCCI to campaign for peace, harmony

At a time when diverse aspirations over federal structure being discussed at the political level have spitted the Nepali society, Federation of Nepalese Chambers of Commerce and Industry (FNCCI) has decided to launch Peace and Harmony Campaign across the country in a bid to promote harmony.

The apex body of Nepali private sector has also appealed to all political and ethnic groups to refrain from organizing general strikes and banda that affect people´s life and hurt economy badly. Instead, it has requested the agitating groups to resort to peaceful protests while fighting for their rights and sit for talks to deal with their issues.

"We respect everyone´s sentiment and aspirations to secure their rights. But strike is not the way to go as it inflicts huge loss on national economy," said FNCCI Senior Vice President Bhaskar Raj Rajkarnikar.

Talking to the press on Tuesday, FNCCI denounced the culture of banda and strike. "We simply can not bear the loss that the present division can inflict on the country," Rajkarnikar stated. 

Given the situation, he said FNCCI was soon organizing a campaign across the country to foster harmony among all the communities and also morally convince all to change their ways of protest.

"We will decide what exactly we will do under the campaign after discussing the programs with all the stakeholders," said Rajkarnikar. 

FNCCI that held its standing committee´s meeting on the day has assessed that current split seen among different groups in the name of federalism can make disastrous impact on the country. "Hence, the committee has decided to appeal to the government to make special efforts to pacify the agitating groups,” he said. 

“We fear the activities witnessed over the past few days could lead to communal violence," said Rajkarnikar, adding that those activities should be stopped immediately and that the government must take some concrete steps in order to maintain peace and harmony in the country.

Private firm to develop Kathmandu-Hetauda tunnel highway under BOOT

It has finally become clear that much-talked about, but not so prioritized Kathmandu-Kulekhani-Hetauda tunnel road project would now be developed under public-private joint investment model.

The clarity emerged after the government on Monday signed a preliminary agreement with Nepal Purwadhar Bikas Company (NPBC), allowing it to construct and operate the tunnel road in public-private partnership as per the build-own-operate-and transfer (BOOT) Act. 

NPBCL, which is assigned to carry out a complete feasibility study and construction, has assured that it would finish the construction in 4 years. If it manages to translate its plan into reality, it would reduce the travel distance between Kathmandu and Hetauda to just 50 km. 

The government had decided to handover the project to the NPBC through a cabinet decision in April. 

Kush Kumar Joshi, president of the NPBCL and Ramesh Raj Bishta, joint secretary of the Ministry of Physical Planning and Works (MoPPW) signed the project execution agreement in the presence of Prime Minister Babu Ram Bhattarai at the National Planning Commission (NPC).

“We will complete feasibility study within six months and complete construction in three-and-a-half years. That means the whole project will be completed within 4 years,” Joshi said. 

The company has estimated its total cost at around Rs 20 billion, and has planned to raise the fund also by issuing bond to the people. 

"We will need to deploy international technology for construction, but in terms of finances it will be a project that will typically have Nepali investment alone," Joshi said, requesting all Nepalis to invest in the project that will yield a long term returns. 

The complete picture of financing needs and ways to realize them will be designed once feasibility study is completed, he stated. 

PM Bhattarai termed the project as a stepping stone of the new Nepal in a real sense. "This will be a landmark project in the history of Nepal," he said." It´s not just a construction of road but also a construction of New Nepal." He assured the government will provide all support to the project to ensure its smooth implementation and said the government will not tolerate unnecassary disturbance in any development works. 

The company has already formed various committees at the local levels to ensure their participation in the project. 

Monday´s agreement made clear the government will handover the track of the tunnel road to the NPBCL for its development, but it is still not clear whether the government will provide any financing support in the project.

"Today´s agreement highlights government´s faith in the private investors," said Tulsi Prasad Sitaula, secretary at the ministry. "We are hopeful they will meet the expectations."

FNCCI to promote investment year in USA

A team of Federation of Nepal Chambers of Commerce and Industry (FNCCI) led by its President Suraj Baidha left for the United States on Sunday to promote Nepal Investment Year 2012/13.

According to a press release, the team of 11 members will meet various US officials, including officials of Bureau of Energy Resources Office of Alternative and Renewable Energy US, Department of State, Export-Import Bank of the US, US Trade and Development Agency, National Hydropower Association (NHA), Energy and Environmental Industries, US Department of Commerce, International Trade Administration (ITA) and Transportation and Machinery, among others. 

During the meeting, the team will highlight latest policies and priorities set by the government for attracting foreign investment, and also shed light on areas in which the country has huge business prospect and return like hydropower, tourism, agriculture and infrastructure sector.

"The team will discuss on investment prospects in sectors like energy and agriculture and shed light on investment climate in Nepal," reads the release. 

The team comprises of representatives from agriculture, banking, carpet, tea, garment and hotel sectors of Nepal.

"The five-day visit will focus on highlighting positive and developing situation of Nepal among officials and private sector leaders is US," states the release.

Govt prepares action plan for economic diplomacy

In order to strengthen international trade and make sound policy on economic diplomacy, the government has prepared an action plan to enhancing the capacity of exiting economic consular offices and establish other.

“We have prepared an action plan and submitted to the Ministry of Foreign Affairs (MoFA),” Toya Narayan Gayawali, joint secretary of the Ministry of Commerce and Supplies (MoCS) told Republica. This action plan aims to modernize the working style of the existing consular offices and embassies in different countries. 

According to Gayawali, the action plan prepared by the MoCS seeks to utilize the diplomatic missions to promote and advertise the Nepali products in the international market. MoFA, which is compiling all the action plans from different ministers related to the economy such as, Ministry of Agriculture and Cooperatives (MoAC), Ministry of Tourism and Civil Aviation (MoTCA) and Ministry of Finance (MoF), will soon finalize the draft of the policy. 

MoCS, for its part, has prepared an action plan that is solely connected to the trade and commerce. “Our action plan is for promotion of Nepali goods and services in the international market,” the official said, “More than that the diplomats should put effort on expanding Nepali business interests in other countries.” 

Moreover, MoCS has also accommodated a task in the action plan to incorporate the Nepal Trade Integration Strategy (NTIS) - 2010. “MoCS is also anticipating the diplomats to support NTIS -- a blueprint that was prepared by government to boost export of certain goods and services that have comparative advantage -- and enhance the market potentials of the goods and services that it has identified,” an official said. 

Broadly, economic diplomacy is supposed to negotiate with other trading partner and countries on issues related to tariff and non-tariff. “Market accesses for domestic products, lobbying for removal of tariff and non-tariff barriers, transport and transit, border management are the major issues that should be considered by economic diplomats,” Gayawali said, “We are also working here to make those arrangement coherent.” 

Economic diplomacy became a buzz in Nepal after 1990. “However, it has not materialized or practiced properly in our case,” on official at the MoCS said, “It´s good that steps have been taken in that direction no matter how late.”

Special govt program for ginger farmers soon

In the absence of proper processing and storage facilities, ginger farmers in the country for a long time had been compelled to sell their produces at low prices, but this is changing soon.

The Ministry of Commerce and Supplies (MoCS) has confirmed that it is soon launching a special program targeting exclusively the ginger producers. Under the program, the government will set up ginger porcessing units in various ginger-producing districts and a storage facility in Jhapa. 

Jhapa, Sunsari, Ilam and Morang are major ginger producing districts in the country.

"We have earmarked Rs 110 million for the purpose," said Toya Narayan Gyawali, joint secretary at MoCS. The ministry is launching the project with support from the World Trade Organization (WTO) under the bank´s Enhanced Integrated Framework (EIF) initiatives.

MoCS is the implementing agency for EIF, which is an initiative of WTO for the Least Developed Countries (LDCs). 

The government is launching the special program for ginger farmers mainly as EIF reckons ginger as a produce with huge export potential and by systematically supporting the farmers and developing the value chain, the country can tread on the path of sustainable export growth. 

Nepal is the fourth largest producer of ginger in the world; however, it has grossly been failing to realize revenue accordingly through its trade. 

Figures at the Trade and Export Promotion Centre (TEPC) show that Nepal earned meager Rs 281.94 million from ginger export in fiscal year 2010/2011. Despite being high in demand, ginger exported during the year was 38.2 percent less than what was recorded in 2009/2010. 

Nepali ginger is exported mainly to India, Japan, the USA, the UK and Germany, among others.

By supporting ginger producers, the government aims to give impetus to trade growth and help reduce poverty. 

Gyawali disclosed that the farmers have already expressed their readiness to provide necessary land for developing infrastructure such as storage houses. 

The project would be implemented jointly by the MoCS, Ministry of Agriculture and Cooperatives (MoAC), Ginger Producers´ Association (GPA) and United Nations Food and Agriculture Organization (FAO), among others.

The program is being implemented as part of the assistance that MoCS received under tier II of EIF. Under tier I, MoCS has been implementing various capacity building programs.

Railway dept won't get a single penny in 2012/13

Though the government plans to lay down 4,000 km railway lines across the country within the next 20 years, it has not allocated even a penny for the Department of Railway (DoR) - the implementing agency - for the coming fiscal year 2012/13.
“Our parent ministry, the Ministry of Physical Planning and Works (MoPPW), has not arranged budget for us for the upcoming fiscal year. I have been asked to get budget from the Department of Roads,” Ram Prasad Lamsal, director general of DoR, told Republica.
The government had formed DoR in June last year with an aim to speed up the process of laying down railway lines.
Minister for Physical Planning and Works Hridayesh Tripathi, however, said the government has allocated budget for DoR. “The only thing is that it hasn´t been allocated under a separate heading due to some technical reasons,” Tripathi said.
Sources at the finance ministry, which is in the process of planning budget for the next fiscal year, admit that there has been no budgetary allocation for DoR. “We allocate budget as per the request of the concerned ministry,” Lok Darshan Regmi, joint secretary of Ministry of Finance said. “MoPPW didn´t propose separate budget for DoR for the coming fiscal year.”
The government had allocated Rs 7 million to DoR as recurrent expenditure in the current fiscal year. It had established the department with a vision of developing 4,000 km railway line across the country, including the East-West Railway, Kathmandu-Pokhara Railway, Kathmandu-Tibet Railway and railway lines that connect major bordering towns of India and Nepal, within 20 years.
Moreover, it is supposed to oversee management of railway, metro rail, ropeways and cable car lines in the country.
“If we are to get budget from the Department of Roads, what is the point behind forming a separate department,” Lamsal said.
Ironically, the government has identified East-West Railway as a national pride project and most of the railway projects are in the government´s first priority (P1).
Minister Tripathi, who said DoR was not allocated budget due to technical reasons, throughout the week was lobbying with the government through parliamentary committees to allocate budget for Jayanagar-Bijulpura railway.

Trade policy expert wing in MoCS

Acknowledging the fact that handling issues related to trade and its dynamism is beyond the capacity of civil servants, government has decided to set up Trade Policy Analytical Wing (TPAW) in the Ministry of Commerce and Supplies (MoCS).
The wing comprising experts on trade policy and development will support the World Trade Organization (WTO) division and trade related issues at the MoCS.
“Analyzing the trade issues and policies is definitely beyond the capacity of administrative staffs,” Toya Narayan Gyawali, joint secretary of the ministry said. “It was decided to establish the TPAW in order to fill that gap.”
According to Gyawali, the United States Agency for International Development (USAID) has agreed to assist the ministry in this regard. “The wing will be completely under the WTO division of the ministry,” he said, “The purpose of establishing the wing is to be more efficient and prepare ourselves for bilateral and multilateral negotiation.”
Nepal which became a WTO member in 2004 has no such body in the ministry till the date. Referring to the frequent transfer of the staffs in the ministry, Gyawali said, “The wing of experts will always be there to support anyone that comes to work here.” The wing will have a maximum of 3 people, according to Gyawali.
Government prepared a Nepal Trade Integration Strategy (NTIS) 2010 -- a blueprint to boost the country´s export -- is looking forward to various bilateral and multilateral trade talks in different forums.
“We also need feedback from experts to know the trend of global trade before sitting for negotiations with different countries and agencies,” said Gyawali, who is also the chief of the WTO division. “Wing´s main responsibility will be to make a sound base for negotiation and provide feedback for decision making.”
The government is preparing to have regular bilateral talk with countries like the US, China and Bangladesh in the near future.
“The wing will be established now in the temporary basis,” Gyawali said, “We might think of making it a permanent body of the ministry after some time.” The government has completed the trade policy review of the country under WTO norms in March.

Provide Rs 1.25 billion for Janakpur-Bijulpura railway project, PAC tells MoF

Public Account Committee of the Parliament has directed Ministry of Finance (MoF) to provide Rs 1.25 billion to the Department of Railway (DoR) within a week so that it can acquire land for the construction and expansion of Janakpur-Bijulapura railway track, which India has agreed to develop.
"The committee directs MoF to allocate the required budget for land acquisition within a week," Ram Krishna Yadav, chair-person of the committee said after a hearing on Monday. The DoR said it needs Rs 1.25 billion for completing the land acquisiton process.
"The committee also directs the Ministry of Physical Planning and Works (MoPPW) to distribute compensation to the land owners within a month," said Yadav.
Project to develop Janakpur-Bijulapura railway track was agreed between Nepal and India in February 2010, when President Ram Baran Yadav visited India. Under the project, the Indian government agreed to upgrade the existing 51-km long railway track to broad gauge and extend it up to Bardibas, a major junction along the East-West Highway.
But the project has stalled since the MoPPW placed the project in least priority. As a result, the MoF had been reluctant to provide budget for the project.
On Monday, however, MoF officials said the ministry was trying its best to arrange budget within this fiscal year. The committee, after hearing the MoF officials, instructed the ministry to manage the required fund by pooling the unspent budget from other projects.
Lawmakers in the committee also asked Minister for Physical Planning and Works Hriyedesh Tripathi to raise complications that he faced due to diverse status of land owners with Prime Minister Dr Babu Ram Bhattarai and sort out the problem.
Tripathi said the land being acquired by the government was agricultural land. "If we did not compensate the farmers right away, the locals will simply not handover the land to us. This will only subject us to difficulty," said he, demanding release of complete fund at one go.
According to DoR, it needs to acquire a total of 220 hectares of land from Janakpur to Bijulpura to upgrade the existing track.

Czech Republic shows interest to boost investment in Nepal

Czech Republic has expressed interest to extend cooperation in establishment of automobile industries, cement factories and power generation plants in order to give a boost to Nepal´s industrial sector.
"We see the future of Nepal in the industrial sector," Jiri Janick, head of the commercial and economic section of Embassy of Czech Republic in India, said at an interaction on Monday. "Industries like automobile, equipment for power generation and cement plant among others can be viable in Nepal."
A visiting delegation of Czech Republic led by Miloslav Stašek, ambassador of the Czech Republic to Nepal, shared that Nepal´s economy can grow at a faster pace through the promotion of industrial sector. "Nepal and Czech Republic have vast scope for cooperation in areas such as trade, commerce and development," Stašek said. "We see distinct possibilities to cooperate in hydro power projects, automobile, waste management, water solution, tourism and services."
In addition to that, Confederation of Nepali Industries (CNI) and Confederation of Czech Industries (CCI) shall soon ink in a memorandum of understanding (MOU). "This will enable business communities of both countries to work together more closely," Stašek added. "The MoU will establish a formal relationship between businesspeople of two countries for further economic cooperation."
Narendra K Basnyat, senior vice-president of the CNI, which organized the interaction, said: "The government of Nepal is also committed to create business friendly environment by implementing new industrial policies and bringing new Industrial Enterprise Act to attract foreign direct investment."
The volume of trade between Czech Republic and Nepal has been increasing gradually but it is in favor of the Czech Republic, which exports automobile and electric equipments to the country. Nepal mainly exports goods such as readymade garment, handicrafts, hand-knotted woolen carpets, tea and medicinal herbs to the Czech Republic. Imports from the Czech Republic mainly constitute medicine and medical equipment, electrical goods, machinery and parts, glass beads, motor cars, bulldozer, crane and parts and foodstuffs.
Additionally, Czech Republic has shown keen interest to invest in joint ventures in Nepal in the areas of water resources, roads, food industry and construction.

Govt, pvt sector put joint effort to improve condition of doing business

In order to portray Nepal as a viable destination for foreign direct investment in the international market, private and public sector are jointly working toward improving the condition of doing business in the country -- that will be reflected in the annual ´doing business´ report of the World Bank.
In this regard, Federation of Nepalese Chambers of Commerce and Industry (FNCCI), Nepal Chamber of Commerce (NCC), Nepal Freight Forwarders Association (NEFFA) and Department of Customs (DoC) are jointly working with the International Finance Corporation (IFC) of the World Bank with the aim of placing Nepal in higher echelon of the doing business index.
“Nepal´s rank in the doing business report is not satisfactory and all of us want it to be better,” Rajan Sharma, president of the NEFFA, said. “We are working on ways to reduce the paper work and procedure to start a business.”
According to Sharma, the main focus will be on finding ways to reduce the cost of doing business, required documentation cost for registering a business and shorten export and import procedures. Nepal was ranked 107th in the doing business report of 2012 out of 183 countries, which is a slight improvement from 2011.
Doing business report is a document that is taken as a guide by foreign investors who want to step in to Nepal with the aim of making investment. It is also a mirror of the country which motivates investors to invest. “We will prepare a guideline which will show how the condition of doing business can be improved in Nepal,” Sharma said.
According to the doing business report 2012, it takes 29 days to start a business in Nepal and 7 procedures should be completed. Likewise, it costs 37.4 percent of per capita income for registration of a business, which is 15.8 percentage points higher than the average cost in South Asia. “The project aims to decrease cost, ease procedures and shorten days required to start a business, so that the country can achieve a better position in the report,” Sharma said.
The doing business report also ranks a country in terms of starting a business, dealing with construction permits, getting electricity, registering property, getting credit, protecting investors, paying taxes, trading across borders, enforcing contracts and resolving insolvency related issues. Nepal´s rank in the report of 2012 is not good in all these cases. The worst is in terms of trading across borders -- Nepal was ranked 162nd out of 183 countries all over the world.

Inability to define 'Sick industry' delays relief packages

Relief to sick industries, a program touted by the government since almost two-decade ago, is likely to go unimplemented this year as well, as a Technical Committee formed at Ministry of Industry (MoI) to define ´sick industry´ and chalk out criteria for distribution of relief package has diverted away from its core responsibility.

Over these years, multiple governments have consistently floated numerous offers like tax waiver, loans structuring and soft loans targeting the sick industries. However, those have remained unimplemented mainly because neither MoI, which is supposed to implement the package, or other related agencies know exactly what the sick industries actually are.

“For any relief package to be implemented, foremost thing we need is a clear definition, criteria and types of sick industries,” said a MoI official. "However, as various task forces did not clearly say which and what sort of industries can be termed as sick industries, the Prime Minister´s Office had asked the MoI to form a technical committee to work out the definition to pave the way for the implementation of relief measures."

Though MoI formed the technical committee more than a month ago, it has shied away from carrying out the assigned task, saying it has no clear authority to define and set criteria for sick industries.

“It is true the PMO issued us instruction. But the basic document -- report of Sick-Industries Rehabilitation High-Level Task Force (SIRHLTF) formed in 2011 -- on which the the instruction was based has no legality in itself. It is neither owned by the cabinet nor the cabinet issued us the instruction to define the sick industries,” said Anil Kumar Thakur, joint secretary of the MoI, who is also leader of the technical committee.

Sources at MoI, on the other hand disagreed with Thakur´s approach. “As the ministry formed the team on PMO´s instruction, he should first complete the assigned task and forward the definition and criteria to the cabinet for approval,” said a source.

If Thakur had acted in the way sources thought right, it would have paved way for an early implementation of the relief package. However, Thakur told Republica he was forwarding the SIRHLTF report to the cabinet to gain legality of the ministry-formed committee and carry out tasks assigned by the PMO.

Such dilly-dallying on the issue, meanwhile, has irked a committee formed by the government to monitor and carry out the follow up actions to ensure that the report made by the SIRHLTF is implemented.

“It is already six months since the PM instructed for the implementation of the report. Sadly, MoI is dragging feet for no good reason,” said Deependra Bahadur Kshetry, vice chairman of National Planning Commission and coordinator of the monitoring team.

Expressing his dissatisfaction over MoI´s slackness, he said the committee would soon seek explanations from MoI, PMO, Nepal Rastra Bank and Ministry of Finance for the lack of implementation of the report.

Kshetry also lambasted Thakur for his stance that the report should be endorsed by the cabinet for implementation. “It was endorsed by the prime minister and the PMO and instructed the MoI to implement it six months ago. I wonder what he is trying to prove by again forwarding the document to the cabinet,” he said .

Despite a steady fall in the rate of Chinese economic growth over the past two years, Official GDP statistics continue to suggest current growth of over 8%.

Based on both private sector (IPSOS and Nielsen) and official Consumer Confidence surveys, six out of the seven most recent assessments of consumer views suggest continuing confidence in the Chinese economy. This is consistent with the latest retail sales data, which shows that Chinese consumers’ expenditure continues to increase at a rapid rate.

Both the World Economics ‘Li Keqiang’ and The Conference Board Leading Indicators also continue to reflect significant growth in the Chinese economy. In addition, ‘hard’ statistics for Electricity, Industrial Output, Cement and Steel production suggest that the Chinese economy is growing strongly again in the region of 5-10%.

The only indicator showing a declining trend is the OECD Composite Leading Indicator which has dipped under its long term average.

World Economics believes the official Q1 2012 8.1% growth rate to be in line with the most recent available data as compiled in this dossier.

 

Operations of all kind of cargos between ICDs and ICPs on the cards

Nepal and India will soon sign letter of exchange (LoE) that will pave way for Nepali traders to send and receive bulk open cargos and refrigerated wagons using the Indian railway service.
To expedite the signing process Nepal forwarded the draft of LoE, a part of the Rail Service Agreement (RSA) signed by the two countries in 2004, to the Indian government last week following a bilateral review meeting of the RSA in Kathmandu in February.
"We are waiting for feedback or confirmation on the draft from the India," Naindra Prasad Upadhaya, joint secretary of the Ministry of Commerce and Supply (MoCS) told Republica on Wednesday. "I believe the LoE, that was prepared on the basis of the agreements during the last review meeting of the RSA, will be okay for India as well."
Once signed it is expected to pave the way for Nepali traders to move containers between any of the Inland Containers Deopts (ICDs) and Integrated Check Points (ICPs) in Nepal. This is also expected to ease the problems of Nepali traders who have long been pushing for movement of open and refrigerated cargos while conducting trade with third countries as well.
The RSA, signed in 2004, limits movement of bilateral rail cargo between Birgunj ICD and Indian ports of Kolkata and Haldia. However, the last meeting has paved the way for unhindered movement of railway containers to any ICD. "Nepali business people are longing to make use of the benefit of using any ICD for the movement of open and covered cargos," an official at the MoCS said.
Currently, Birgunj ICD receives and forwards railway wagons from Kolkata and Haldia ports. Similarly, Birgunj ICP is expected to come into operation this year. Other ICPs in Biratnagar, Bhairahawa and Nepalgunj are under construction.
However, the last review meeting of the RSA failed to allow Nepali traders to acquire services of other railway company besides Containers Corporation (Concor) of India - the IndiaN partner in the Himalayan Terminal that is managing Birgunj ICD and also responsible for arranging containers.

Project to upgrade Janakpur-Bijalpura railway line in limbo

The much-touted program of upgrading the existing Janakpur-Bijalpura railway track and extending it up to Bardibas, a major junction along the East-West Highway, has landed in troubled waters after the government failed to arrange budget for land acquisition.
Acquisition of land is crucial for the project as the government cannot kick-start the project without completely taking over the land on which the track will be laid.
“The program is already two years old. Sadly, we are still facing dearth of capital to compensate the landowners and complete the formalities of acquisition,” said a senior official at the Ministry of Physical Planning and Works (MoPPW).
To complete the acquisition, Department of Railway (DoR) has assessed it would need a total of Rs 1.25 billion. It has long been pushing the MoPPW and Ministry of Finance (MoF) to arrange at least Rs 300 million to kick-start the process.
“MoF about a month ago had even informed us that it has agreed in principle to pledge the fund by transferring fund from other projects that have not used their allocations,” said Minister for Physical Planning and Works. “But we never got the money. And unfortunately, MoF now says it cannot provide us the fund.”
Interestingly, the latest obstacle to arrange fund for the project has surfaced after MoF realized the project - that stands as one of the important components of the East-West Railway Line - was rated as Priority 3 (P3) project by the MoPPW.
“East-West Railway clearly is a ´national pride´ project. We had never guessed one of its important components will be placed in the least priority project,” said a source, disclosing that this very mismatched prioritization by the MoPPW made MoF to refuse fund for it.
Going by the existing norms, MoF can transfer funds (in case of poor spending by other projects) to important project. But those projects have to be listed under P1 projects.
“The complication, meanwhile, has put the project in an uncertainty,” said an official at DoR.
The DoR has further notified the MoPPW and MoF that it would not be able to start the project if the government did not correct the order of priority of the project immediately.
According to DoR, it needs to acquire a total of 220 hectares of land from Janakpur to Bijulpura to upgrade the existing track. India has allocated Rs 600 million in its project to upgrade the 51-km rail track from Janakpur to Bijulpura.

Ban import of unregistered hybrid seeds, govt told

Following complains of no yields and contradictory views on Monsanto´s entry to Nepal, the Natural Resources and Means Committee of the parliament has directed the government to strictly enforce ban imposed on import of unregistered hybrid seeds and also regulate import and sale of hybrid seeds.
Nepal imports more than 200 types of hybrid seeds from 30 international seed production companies through 13 domestic importers. Although existing law bans import of seeds that are not registered with Nepal Agriculture Research Council (NARC), substandard seeds have been finding way into the Nepali market, inflicting huge loss to the farmers.
The committee issued the instruction after holding discussion on a concept paper on enhancing traditional seeds -- referred as seed sovereignty - submitted by the Ministry of Agriculture and Cooperatives (MoAC).
In its decision, the committee has even instructed that Nepal Agriculture Research Council (NARC) should conduct two years of field experiments before registering any hybrid seeds. “In order to enable NARC perform its duty efficiently, the government should immediately enhance it capacity by provisioning more human resources and additional capital,” the committee has said in a letter written to the MoAC.
The committee had conducted a detailed study on hybrid seeds and even grilled the MoAC officials in this connection the attempt of Monsanto -- a multinational agricultural company - to enter into Nepali market with its hybrid maize seeds through a program of United State Agency for International Development (USAID) in last September drew controversy.
Following series of interactions and demanding a clear concept paper from the MoAC on traditional and hybrid seeds, the committee issued a 7-point directive to the ministry.
Under this, the committee has also asked the ministry to study out the situations of agriculture and livestock quarantines in the country. “Prepare an action plan for upgrading and advancing their conditions and capacity,” the committee has said in its instruction.
The committee has asked the ministry to submit the action plan along with cost estimates for implementing them within 15 days.
Furthermore, the committee also lambasted the MoAC officials, saying that their attempt to allow entry of Monsanto hybrid seeds in Nepal by entering into an agreement with Monsanto and USAID was a foul play.
In this regard, the committee in January had grilled the senior ministry officials on government´s policy on hybrid and genetically modified organism (GMO).
“The Ministry should work to protect and promote locally produced hybrid seeds,” the committee has said. It has, however, maintained silence on the GMO, even though the ministry´s concept paper clearly states that import of GMOs should be banned.
The existing Agricultural Policy (2004) says that the government would strictly regulate the GMO and promote hybrid seeds.