Officials from eight South Asian countries are convening in the capital
next week to shorten the existing list of ´sensitive items´ on which
they have refused to trade at zero tariff so that regional economic
integration could gain momentum, generate more trade and job
opportunities to the people in the region.
Likewise, another working group of technical officials from South Asian
Association for Regional Cooperation (SAARC) is also meeting in the
capital to work out a framework for opening services trade in the
region.
“We will have separate back-to-back meeting of two different groups
under South Asia Free Trade Area, starting from Monday,” said Naindra
Prasad Upadhaya, joint secretary at the Ministry of Commerce and
Supplies (MoCS).
The first - Working Group on Reduction of Sensitive List (WGRSL) - will
negotiate on Monday for downsizing the existing negative list of trading
items by 20 percent, as mandated by the SAARC Summit. The second team -
Group of Experts - meeting on Tuesday will hold discussions to evolve
out a frame work of South Asia Trade in Services (SATIS).
Upadhyaya refused to elaborate, but sources at the MoCS said all member
countries have respected the mandate of the Summit to further open up
their markets for intra-regional trade and proposed a revised sensitive
list, downsizing it from existing long list.
Although SAARC members, including Nepal, India, Bangladesh, Bhutan,
Pakistan Sri Lanka, Maldives and Afghanistan, started to trade without
tariff barriers from 2006, the intra-regional trade has not yet made
significant headway largely due to the long sensitive list. Presently,
the sensitive list has as much as 20 percent of total regional tradable
items, and worse still, each member countries have largely included
items of others exports interest in the list.
“The commitment is there from all members to further open up their
markets, but we are still to see how sincerely they will present
themselves in this endeavor,” said the source, adding that WGRSL will
discuss a new lists that the member countries will table.
So far, countries have not disclosed what exactly they will reduce from
the list. “We ourselves are still preparing the list of the items that
can be removed from the existing list,” he told Republica.
If the Working Groups finalizes the cuts, officials said member
countries will immediately open their trading under zero tariff
facility. If Nepal cuts the list, it will still have 998 items in
sensitive list for the least developed countries (LDCs) and 1,086 items
for the non LDCs.
Presently, Bangaladesh has 1,233 products in the sensitive list for the
LDCs and 1,241 for the non-LDCs. Similarly, India has 480 items in list
for the LDCs and 868 for the non-LDCs, Maldives has 681 for all seven
SAFTA nations, and Pakistan has 936 items, Srilanka has 1,042 and
Afghanistan has 1,072 items on the list.
As for the meeting on SATIS, officials said member countries are still
to propose sectors that they will open for service trade. “Negotiations
were still on in very basic issues. Hence, the meeting will largely
focus on nitty-gritty of the framework accord for trade in services,”
said the source.
Governor of the Nepal Rasta Bank Dr Yuba Raj Khatiwada on Friday asked
NIDC Bank -- a financial institution that was established with a motive
to promote industrial sector -- to increase its capital so that it could
invest more and facilitate growth of productive industries.
"We safeguarded NIDC over the past five decades with a sole motive to
lend and facilitate the development of mega industrial projects. It must
live up to this expectation," said Dr Khatiwada.
Dr Khatiwada, who was speaking at the 54th annual general meeting of the
NIDC Bank, promised all possible support from the central bank´s side.
Chairperson of NIDC Shanta Bahadur Shrestha expressed concerns over the
institution´s bad loan. "Recovering the bad loans has become a major
challenge for the bank, but it must overcome this challenge, if it is to
create opportunities for itself and do better in the highly competitive
banking sector," he stated.
Issuing a press release on the occasion, NIDC Bank has announced that it
is aiming to earn profit of Rs 300 million in the current fiscal year.
In a major development, the Investment Board (IB) on Thursday approved a
format for power development agreements (PDA) that it is to adopt while
awarding hydroelectricity projects of above 500 MW capacity to international investors.
The format, which will be applied while developing Tamakoshi III (650
MW), Upper Karnali (900 MW), Upper Marsyangdi (600 MW) and Arun III (900
MW) under build-own-operate-transfer (BOOT) arrangements, assures a 30
year concession period for the developers. It also sets the condition
that the projects developed should last 100 years.
What this means is, the developers will be allowed to own and operate
mega hydropower projects for 30 years, and once the contract ends, the
government will reclaim the ownership. But developers will still be able
to operate the projects for the next 70 years. "This will protect the
interests of both the people of Nepal and the power developers," said a
senior IB official.
The PDA template equips the government with guidelines for negotiating
sound hydropower deals. It aims to ensure maximum benefits in terms of
revenue, spending, industrial employment benefits and electricity.
"The PDA ensures fair returns to the developers, enabling them to get
financing at competitive costs. This agreement is bankable," said Radesh
Pant, CEO of IB.
Among other things, the PDA template commmits to putting in place a
timely mechanism for approval from the government and also promises that
the government will fulfill its commitments. It seeks developers to
follow the best-practice international environmental and social
standards, ensures packages that benefit local communities and commits
itself to fair resettlement and rehabilitation, Pant told Republica
after the board endorsed the template on Thursday.
Prime Minister Dr Babu Ram Bhattarai, who chairs the IB, stated that the
government will assure investors work on their projects will proceed
unhindered.
The PDA is just an agreement template though. The IB will negotiate and
tailor individual agreements for different projects based on project
circumstances and economics, local community needs and aspirations.
The template clearly cites the roles and obligations of the government
and power developers. In the event of disagreements, it assures
impartial processes for quick resolutions.
It also deals at length with dam safety, appropriate design and
maintenance and handover provisions. "Issues such as protection against
basin silting are also covered so that these hydro assets continue to
benefit the country for many decades after the investors hand them back
to the government," Pant told Republica.
The PDA template furthermore provisions for full financial disclosure so
that the government understands how it will benefit from projects.
"Shareholder agreements -- yet to be drafted -- will ensure profit and
dividends and other policies and procedures to protect the government´s
equity interest over the 30 year term," reads the template.
Federation of Nepalese Chambers of Commerce and Industry (FNCCI) has
urged the government to forge national consensus among all political
parties and bring a full-fledged budget to give continuity to
development and pump in new life to businesses.
“We strongly request the government to agree on common minimum economic
agendas,” Bhawani Rana, acting president of the FNCCI, said. She also
urged political parties to form a national consensus government at the
earliest and end uncertainty.
“The failure to bring full-fledged budget for the upcoming fiscal year
will have a negative impact in the economy,” Rana told media persons on
Wednesday.
The apex body of Nepali private sector has also requested government to
extend the deadline for bank loan repayment and provide compensation to
the private sector for losses they incurred during bandas and strike in
the last week of May. “We request the government to waive off interest
amount for the month of May extend loan repayment date by three months,”
she added.
FNCCI also lambasted the government for pushing for revenue mobilization
without creating environment conducive for businesses. “Unfortunately,
the government is pushing for revenue growth at a time when private
sector has lost confidence due to factors like strikes, power shortage
and labor unrest,” Rana added. “The government should make banda
organizers compensate for the loss incurred by businessmen during bandas
and strikes.
The federation has also requested the government to ensure security for
businesses so that the business sector can operate without any fear. “It
is becoming extremely difficult for the private sector to run their
business enterprises due to fear of extortion,” Rana said, informing
that former Maoist combatants have been collecting cash from businessmen
in Makawanpur district.
FNCCI concerned about Narayanghat incident
FNCCI has voiced concerns over recent attack on members of revenue investigation team by Narayanghat-based businessmen.
“We denounce violence. But the modus operandi of Department of
Investigation (DRI) in that particular case was not practical,” Bhawani
Rana, acting president of FNCCI, said. “The entire business community
has lost confidence due to the Narayanghat incident.”
DRI has decided to freeze assets and bank accounts of the proprietors of
Laxmi Narayan Bastralaya and Bhagawat Bastralaya. These two apparel
stores have been found evading revenue worth millions of rupees.
Businessmen had attacked team members and torched their vehicle after
they sealed the stores, suspecting them of evading taxes.
Nepal Trade Integration Strategy (NTIS), a national document developed
with objectives to give new impetus to faltering exports, has largely
remained unimplemented even though two years have elapsed since it came into being.
Under the strategy, the government had identified 19 key products in
which Nepal enjoys competitive edge and can bank on for sustainable
trade growth, promised to support development of those products and
services, apart from providing infrastructural support for their trade.
However, leave aside making concrete support for the product
development, the strategy has not even managed to get enough allocations
to deliver the promises of infrastructure development. “Unfortunately,
Ministry of Commerce and Supplies (MoCS) - the implementing agency - has
not even been able to spend even that meager allocations,” said a
source.
According to MoCS, the government had allocated Rs 30 million in 2010/11
and pledged Rs 50 million in 2011/12 for the implementation of NTIS.
“But the implementing institutions are so weak they even cannot make
their periodic publications, forget about implementing the action-plans
that NTIS has,” former commerce secretary Purushottam Ojha told
Republica.
No wonder, the much-desired export growth of most of the products listed
in the NTIS has not gone up over these years. Rather, some of the
products that were identified as highly potential items have suffered a
drop in exports.
For instance, ginger exports went down by 38 percent in 2010/11, lentils
and handicraft too suffered drop in exports by well over 10 percent
each during the year. The NTIS has enlisted cardamom, tea, instant
noodles, medicinal herbs and essential oils, germs and jewelry, iron and
steel, wool products and pashmina, as products through which Nepal can
fulfill its dream to expand exports.
Some, however, argue that two years is too short a span for realizing
any visible change. “NTIS´s objectives are to establish backward and
forward linkages, so that farmers could enjoy substantial positive
changes in their lives. Now you do not expect that to happen in two
years,” said a MoCS official.
However, knowledgeable people like Ojha said the strategy has suffered
mainly because the political leaderships at the ministry have not owned
it seriously. “They (ministers) have so much interest in Nepal Oil
Corporation, I haven´t seen any political leadership being sincere about
the NTIS document in last two years,” said Ojha.
However, the government´s plan to consolidate all the foreign assistance
that comes as aid for trade through this strategy has somehow been
addressed. For instance, the bilateral and multilateral donor agencies
now have to go through the document.
“We refer NTIS document while the negotiation goes on with different
agencies,” Jib Raj Koirala, under secretary at the MoCS said,
“Comparatively, it has been useful to negotiate with the bilateral and
multilateral donor agencies.”
The NTIS has specifically highlighted its four basic objectives such as
strengthening trade negotiations (especially bilateral), strengthen the
technical capacity of domestic non-tariff barriers/other business
supportive institutions, and strengthen the export capacity of inclusive
export potential goods and manage the aid for trade.
The government has failed to hold bilateral trade talks with Bangladesh,
China, Bhutan and the US, citing reasons like political instability.
Confederation of Nepali Industries (CNI) and Alternative Energy
Promotion Centre (AEPC) have signed a memorandum of understanding (MoU)
to promote renewable energy.
They have agreed to enter into an institutional collaboration for
implementation of renewable and alternative energy technologies along
with promotion and development of renewable energy in the country.
The MoU envisions certain terms and principles that
guide, coordinate, lobby and harmonize the relationship and work on a
private-public partnership modality for alternate energy promotion.
Binod Chaudhary, president of the CNI, and Krishna Gayawali, secretary
of the Ministry of Environment, Science and Technology (MoEST), signed
the MoU on behalf of their respective organizations, according to a
statement issued on Tuesday.
"The two institutions´ services will focus on rural areas with the
objective of enhancing energy access and employment while reducing
poverty through public private partnership to foster growth of
industrial sector," Chaudhary said at the signing ceremony.
The CNI and AEPC have also agreed to work with community based
organizations, private sector, non-governmental organizations and other
institutions for maintaining energy systems at affordable level, meeting
basic quality standards, and maximizing use of energy for income
generation activities.
Federation of Handicraft Association of Nepal (FHAN) in coordination
with the Ministry of Commerce and Supplies (MoCS) and Trade and Export
Promotion Centre (TEPC) is organizing handicraft trade fair from November 22 to 26.
According to a press statement issued by FHAN on Thursday, the event
will also be supported by Federation of Nepalese Chambers of Commerce
and Industry (FNCCI), Federation of Nepal Cottage and Small Industries
(FNCSI), Micro Enterprises Development Program (MEDP), district
handicraft associations, among others.
"The event is expected to develop as business hub for the SAARC region´s
handicraft entrepreneurs as there will be participation from India,
Bangladesh and Pakistan," reads the statement, "There will be 20
participants from Bangladesh and 15 each from India and Pakistan." FHAN
is trying to arrange participation of Maldives, Bhutan and Sri Lanka in
the event, according to the statement.
"There will 250 stalls of handicraft and 12 pavilions and others
individual handicraft booths of pashmina along with Nepali handmade
paper, leather products, natural fiber products, wood products, ceramics
and many more other handicraft," read the statement.
FHAN has estimated that the fair would draw more than 300,000 visitors.
"A turnover of Rs 50 million is expected during the event," read the
statement.
The government has dropped its
much-hyped plan to bring US$ 1 billion worth of foreign investment in
the first six months of Investment Year 2012/13. Instead, it now says
the first half of the next fiscal year will be ´preparatory period´
following which it will aim to bring in the targeted USD 1 billion
foreign investment in the country.
The government readjusted its plan for the Investment Year, starting
from mid-July 2012 after political deadlock pushed the program into
jeopardy.
The Investment Board (IB), assigned to realize the government´s
ambitious plan said it would completely change the timing of the
Investment Year. "Unlike the past announcements, the IB will now use the
first six months (of 2012/13) to complete all necessary preparations,
including enactment of various investment friendly laws and policies," a
source at the Prime Minister´s Office (PMO) told Republica.
"There are internal discussions going on to change the timing to
kick-start the Investment Year 2012/13," said the source. The board is
yet to make an official decision in this regard though.
If the source comments are anything to go by the Investment Year will
now begin from January 2013 and not from mid July, 2012 as earlier
announced.
While launching the Investment Year, Prime Minister Babu Ram Bhattarai
had said the government would bring in foreign investment worth US$ 1
billion within the first six months. To achieve the target, he had also
promised amendment and formulation of various Acts and policies to make
the country´s investment regime more investor friendly. "But the whole
plan has been affected due to the political sitution since May 27," said
the source.
Radesh Pant, CEO of the IB confirmed that the time to unveil the
Investment Year 2012/13 has been readjusted. "The readjustment will be
more practical given the country´s political situation," he told
Republica.
The Investment Year, which was launched on the basis of calculation that
constitution will be endorsed on time, might not get investors as hoped
for after the political situation took an opposite turn after May 27.
"Certainly, the investors might have doubts and fears to come here with
their investment," said the source, "We have seen very clear indications
of this."
For instance, according to a different source close to the PMO,
investors from South Korea who were looking to invest in the
hydroelectricity development project have shown reluctance to move
forward in the changed political situation.
IFC, DFID, Japan to assist IB
Three leading multilateral and bilateral development partners have
extended their commitments to provide technical assistance to the
Investment Board (IB).
International Finance Corporation (IFC), Department for International
Development (DFID) and Embassy of Japan have shown interest to provide
technical assistance to the IB, as per a source at the Prime Minister´s
Office (PMO).
"IFC basically, has approached IB office to provide technical assistance
to identify the potential projects," said an official of the IB office,
"DFID also has shown same kind of interest." According to the official,
"the board has already moved forward to work with IFC in a bid to
identify the projects that can be of importance."
The government, which has been
inefficient to address the supply side barriers in the manufacturing
sector such as labor problems and power-shortage has also been dragging
its feet to hold bilateral trade talks with around half a dozen of
countries to fix the problems that Nepali businesses are facing.
For instance, bilateral trade talks with the United States, Bangladesh,
Bhutan and China among others, have not been held in time. “Technically,
some of the bilateral trade talks have been postponed by respective
countries,” an official at the Ministry of Commerce and Supply (MoCS)
said preferring anonymity, “But, in reality all this is happening due to
our weak communication, coordination and logistical arrangements.”
The bilateral agreement between Nepal and Bangladesh on Operating
Modalities for Transit Cargos (OMTC), which is crucial to ease the
transportation hassles between Nepal and Bangladesh, is in the action
plan of the MoCS but it has not happened. “We have plans, and it takes
time to hold bilateral talks as conducive environment is a prerequisite
for that to happen” said Naindra Prasad Upadhya, joint secretary of the
MoCS.
Similarly, annual meeting between Nepal and USA, which had to happen in
April as per the agreement between the two countries, has been postponed
to September. Technically, the meeting was postponed by USA. However,
government has failed to seek a reason behind the postponement. “The
Trade and Investment Framework Agreement (TIFA) will provide a forum for
bilateral talks to enhance trade and investment, discuss specific trade
issues, and promote comprehensive trade agreements,” reads the
statement made by US government after signing the TIFA in 2011.
Additionally, the third meeting of Nepal-Tibet Trade Facilitation
Committee (NTTFC) which had to happen in May has not taken place. MoCS
couldn´t participate in the meeting in the last week of May citing
political uncertainty in the country.
“We have proposed first week of July as the new date for meeting, but it
is yet to be finalized” joint secretary Upadhaya said. The preferential
treatment agreement between Nepal and Bhutan is also long pending even
though the Bhutan government itself has been showing interest to ink an
agreement for some eight years.
“All this is due to political instability in the country,” Lal Mani
Joshi, secretary of the MoCS said, “Unfortunately, some of the countries
cite security as a reason for postponement.”
Trade statistics show that the countries such as China, Bhutan,
Bangladesh and the USA are Nepal´s major trade partners. “We have failed
to capitalize the resources and opportunities we have due to
government´s slackness to handle the bilateral negotiation,” one of the
businessmen said in the condition of anonymity.
The government has expressed confidence on achieving the target of revenue collection in the current fiscal year 2011/12.
According to a press release issued from Ministry of Finance (MoF),
Krishna Hari Baskota, secretary of the Ministry said that the country
was successful in collecting Rs 190.8 billion in the first ten months of
the current fiscal year. “We have successfully collected 98.7 percent
of the total target of revenue collection,” reads the release.
Baskota, who collected statistics from the major customs point of the
country over the phone, claimed those points had performed well to meet
the target. “Excise duty, VAT and income tax are the major contributors
to achieve the target,” press release said.
The ministry projects that the contribution of revenue will be 16
percent in the gross domestic product (GDP) this fiscal year, up 0.7
percent point from last year. “We have set a target to make this 20
percent of the GDP within 3 to 5 years,” said secretary Baskota.
Nepal has proposed holding bilateral trade talks with China in the first
week of July to hammer out all outstanding issues on tariff and
transit-related barriers.
"Preparations are under way to hold the third meeting of Nepal-Tibet
Trade Facilitation Committee (NTTFC) in the first week of July," Naindra
Prasad Upadhyaya, joint secretary at the Ministry of Commerce and
Supplies (MoCS) told Republica on Thursday.
The talks, scheduled for last week, were postponed after uncertainty
loomed due to series of bandas called by various groups prior to the May
27 dissolution of the Constituent Assembly.
The joint-secretary level meeting, which will be held in China this
year, is an annual function. MoCS is looking forward to discussing
problems faced by the Nepali business sector during the meeting.
However, Nepali businessmen are not optimistic about the talks yielding positive results.
"The trade talks between the two countries have not been able to address
our problems," Rajesh Kaji Shrestha, president of the Nepal-China
Chamber of Commerce (NCC), said.
Interestingly, a recent study carried out by the South Asia Watch on
Trade, Economics and Environment (SAWTEE), with the assistance of the
United States Agency for International Development (USAID), has claimed
Nepal´s trade agreement with China has failed to uphold the national
interest.
"The letter of exchange signed between Nepal and China in May 2010 has
turned out to be a barrier for the export growth of Nepal," the study
states.
However, MoCS officials refuted such claims. "Definitely, the agreement
might not have been as supportive, as domestic value addition on goods
exported to China should be at least 40%," one of the officials said on
condition of anonymity, adding, "The report was mostly based on survey
with businessmen."
According to the Trade and Export Promotion Centre (TEPC), trade deficit
with China shot up to Rs 45 billion during the fiscal year 2010/11 from
Rs 11 billion in 2005/06.
In a bid to protect consumers from inflationary pressure and irregular
market price of 12 essential commodities, the government has prepared an
action plan that includes some 16 short-term and another 16 long-term measures.
A nine-member committee, tasked with the job of preparing a concrete
action plan on controlling prices of essential goods and strengthening
market regulations listed rice, maize, wheat, salt, sugar, fruits,
vegetable, milk, pulses, edible oil and petroleum products as essential
commodities.
The action plan envisioned steps to control rising prices. "This is also
to ensure reliable supply of essential goods," read the 43-page-long
action-plan. The team used statistics available from related agencies
and prevailing market price as base to build the action plan and is per
the cabinet decision of mid-April.
The government, under the short-term measures, has planned to provide
incentives in customs duty in some selected essential goods, establish
fair-price shops in all the municipalities and various places of
Katmandu and print maximum retail price in packages of all the essential
goods.
Similarly, the government also plans to effectively implement existing
laws and rules to control price and regulate market. "There will be
effective implementation of Consumers Protection Act 1998," the action
plan said. "All the wholesale and retail shops must demonstrate a price
list of all the essential goods."
In addition, the government will have to publish details of production,
import and wholesale price every three months. Also, permanent bodies
from centre to local levels would be established to regulate the market.
The action plan that was availed to Republica, says "The government
will issue ration cards to support poor people to get essential goods at
reasonable prices within six months."
Similarly, the action plan has also suggested opening up import and sale
of petroleum products to the private sector, doubling the investment in
the agricultural sector, raising food production in rural areas,
establishing consumer courts in all zones, and incentives to fruits and
vegetable transporters among others.
In addition, the report recommends establishing the Supply Board so that
there would be an independent and functional body to strengthen supply
mechanisms.
"There should be market information centres in the districts as well," the action plan said.
Sick industries that were hopeful of finally getting much-touted relief
package, particularly after the cabinet last week approved an action
plan of Ministry of Industry (MoI), will find their hopes shattered
again as there is no parliament to amend the laws necessary for
implementation of the package.
The government, which constantly failed to identify criteria for sick
industries for well over one-and-a-half of decade, was preparing to
amend Industrial Enterprise Act (IEA) incorporating the recommendations
of a high-level task force formed to facilitate rehabilitation of sick
industries.
But the dissolution of Constituent Assembly (CA) has eroded the
possibility of amending IEA. "We can´t provide anything that is not
under the law," Yam Kumari Khatiwada, joint secretary of the MoI said,
"We can offer relief-packages that have been envisioned by IEA - 1992
only after finalizing the criteria for listing sick industries."
The committee has got cabinet approval to work and finalize the list of
sick industries. "The committee will set the criteria for sick
industries," Khatiwada said.
"Enacting the proposed IEA is crucial to industrial development,"
Khatiwada said adding, "We will try to take initiatives to provide as
much as possible relief to the sick-industries."
However, the high level task force led by vice-chairperson of the
National Planning Commission (NPC) Dipendra Bahadur Kshetry has
recommended multiple relief packages to the sick-industries ranging from
bank loan restructuring to tax waiver.
The high-level taskforce has received applications from 26 firms for
relief packages. "Additionally, six of them have put pressure on the
ministry for immediate support," said a MoI source, declining to name
the industries.
The ministry, which was looking forward to getting special economic zone
(SEZ) bill endorsed and foreign direct investment policy revised has
faced a set back following CA dissolution.
Much-touted Investment Year 2012/13 has landed in trouble after the
country´s failure to formulate new constitution badly eroded country´s
prospect as an attractive investment destination.
While launching the Investment Year, Prime Minister Dr Baburam Bhattarai
had said the government would bring in foreign investment worth US$ 1
billion within the first six months of 2012/13, and to achieve the
target the government would formulate necessary policies and laws.
“The program is doomed now. Who will put his/her money in a country that
does not have a full-fledged constitution and political uncertainties
loom large,” said Binod Chaudhary, president of Confederation of
Nepalese Industries (CNI).
Under its pledge, the government had said it would provide flexible
labor regime to the investors. It had also promised to introduce laws
like Industrial Enterprise Act, Special Economic Zone Act, formulate a
new Foreign Direct Investment (FDI) policy and enact more
investment-friendly FDI Act, among other things.
“The government can still formulate the policies. But the dissolution of
CA and legislative-parliament has disabled it from enacting much-needed
investment-friendly laws,” said Bhaskar Raj Rajkarnikar, senior vice
president of the Federation of Nepalese Chambers of Commerce and
Industry (FNCCI).
The government had launched the Investment Year after it formed the
Investment Board (IB) and on the basis of calculations that the country
would have concluded the peace process and constitution writing by now.
"But that hope has been shattered,” said Rajkarnikar, adding that as the
new chaos has turned even the domestic investors nervous, forget
foreign investors.
Officials disclosed that foreign investors who were holding talks with
the IB to invest in some of projects have already started showing sign
of ´waning confidence´ after the new political turn of events.
“South Korean investors, who were looking forward to invest in the
hydroelectricity sector, have expressed fear to move forward,” disclosed
a source. "They (Korean investors) were excited, but now they are
saying that they do not feel comfortable to continue with the proposed
projects," said the source.
The announcement of Investment Year had excited both the private and
public sectors, and top business bodies like FNCCI and CNI have been
actively supporting IB to come up with numerous business projects.
The government too had handed over 14 large-scale development projects
such as West Seti (750 MV), Upper Karnali (900 MW), Kathmandu-Tarai Fast
Track and Second International Airport in Nijgad among others to the IB
to award them to the promising investors under fast-track mode.
“Sadly, this sudden political mess has sharply curtailed the chances of
those projects drawing international investors,” said the source.
Radesh Pant, CEO of the IB expressed hope that situation will not be as
bad as the business community and some officials think. "Investors will
still be interested in those projects if we are able to guarantee
protection for their investment," he said.
The government has finally made arrangement for partial budget to
acquire land for the construction of Bijulpura-Jayanagar railway track.
The project had been facing long delays after Ministry of Finance (MoF)
failed to make timely arrangement of funds.
Ministry of Physical Planning and Works and Transport Management
(MoPPWTM), which is supposed to carry out the land acquisition, finally
got Rs 690 million. The government has estimated Rs 1.25 billion for the
acquisition of land.
According to Tulsi Prasad Sitaula, secretary of the MoPPWTM, MoF has
approved budgetary transfer of Rs 500 million and provided additional Rs
150 million. The government had allocated Rs 40 million through the
budget of current fiscal year 2011/12.
“We have formally approached the Indian government to start the bidding
process for the construction of railway track,” Sitaula told Republica
on Sunday. He further added that the MoPPWTM has arranged money from
other projects´ budget that remained unspent.
Acknowledging the delay, the Public Account Committee (PAC) of
parliament had directed the government to arrange the necessary funds.
According to DoR, it needs to acquire 220 hectares of land from Janakpur
to Bijulpura to upgrade the existing track.
Nepal and India agreed to develop Janakpur-Bijulapura railway track 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 proposed East-West railway. India has allocated Rs
600 million for the project.
However, the project is not likely to start within this fiscal year. “It
takes at least 3 months from the bidding process and it is almost
impossible to start the construction this fiscal year,” Sitaula said.
The MoPPWTM, which will soon start distributing compensation to the
local land owners, will first use the available money to acquire 15 km
stretch of land in the Biratnagar border area to extend railway track.
“And rest of the money will be used in the Janakpur-Jayanagar area,”
Sitaula said.