Fund crunch hits feasibility study of SEZs

The feasibility study for special economic zones (SEZs) in Dhanusha, Rautahat and Siraha is unlikely to happen this year even though the government has already finalized contractors for the study.
However, the industry ministry had failed to sign an agreement with contractors before the end of fiscal year 2011/12. As a result, the budget allocated for the project has frozen.
The government has not allocated budget for the project in the partial budget for the first four months of fiscal year 2012/13, according to an official at the industry ministry.
“The feasibility study for SEZs in those three districts is unlikely to happen,” Ministry for Industry Anil Kumar Jha said, confirming that there has been no budgetary allocation for the project in the partial budget.
The official said failure to ink deal with the contractors on time has affected the entire project.
Meanwhile, construction of SEZ in Bhairawa and Simara is going on in full swing. However, construction of SEZ in Bharatpur, Jumla and Kapilbastu is unlikely to begin anytime soon. Firms appointed by the ministry are currently conducting feasibility study of SEZ in these three places.
“Only Rs 10 million have been allocated for the SEZ project in the partial budget. The amount will be spent for SEZs in Simara and Bhairahawa,” the official said.
Though the ministry has already completed feasibility study for SEZ in Panchkhal and Kavre, construction works are unlikely to begin anytime soon owing to fund crunch.
The Ministry of Industry has decided to approach the Ministry of Finance (MoF) and National Planning Commission (NPC) for the allocation of funds for the feasibility of SEZs in Dhanusha, Rautahat and Siraha, according to the official.
However, Minister Jha maintained silence over the plan to seek funds for the feasibility study

FNCCI concerned over closure of Arghakhanchi cement factory

The Federation of Nepalese Chambers of Commerce and Industry (FNCCI) has expressed serious concern over the closure of Arghakhanchi Cement factory due to the "locals´ irrational" activities.
According to a statement issued on Sunday, FNCCI called on the government to take immediate steps to create favorable environment for smooth operation of the factory. “The industry has done so much to protect the environment in the local area,” said the statement.
“We express grave concern over the locals´ irresponsibility such as violent attack on the factory staff,” the release states. “The government must take actions against those involved and punish them according to law.”
The industry with Rs 2.5 billion investment has provided jobs to 700 people. “We believe there can´t be any kind of foreign investment in the country until such attacks continue on domestic industries,” the statement said.
The factory has been closed since the last 9 months. “This is not tolerable to us. We ask the government to come up with a concrete plan to stop such activities,” the statement reads.

Govt renews consultations with farmers for developing ADS

The government has started fresh consultations with local farmers and farmer´s groups in the mid- and far-western regions in order to collect their inputs for Agriculture Development Strategy (ADS), a long-term vision document that will chart the course of country´s agriculture sector for the next two decades.
Ministry of Agriculture Development (MoAD) started the consultations afresh after the government restructured the steering committee, incorporating farmers´ representatives, and decided to adopt field-based feedback approach to develop the ADS, scrapping the previous assessment report.
“The new steering committee, which was formed after intense protest from different farmers associations and civil society leaders, has completed consultations for fresh assessment in the two regions,” an official from the Ministry of Agriculture Development (MOAD) told Republica.
The committee would hold similar consultations with farmers in the other regions of the country soon, said Prabhakar Pathak, joint secretary at the MoAD.
Through the consultations, the committee is fundamentally generating farmers´ perspectives on areas wherein the government failed while implementing Agriculture Perspective Plan (APP): 1995-2015.
The APP, much-regarded as a reform-oriented vision document, had among others scrapped the government subsidy and promised reforms in supply chain of agricultural inputs and technology so that farmers could access quality fertilizers, seeds and equipments easily.
As concerned officials admit, APP remained a total failure in transforming the agriculture sector and farmers´ lives. Through the fresh consultations the committee hopes to generate new programs and inputs for future policy guidelines.
“We are raising issues such as land-reform, agriculture revolution and demands of farmers in the new consultation meetings,” said Prem Dhangal, general secretary of the Nepal Peasants Federation (NPF).
Meanwhile, referring to the complete restart of the ADS process and fresh consultations being held at different regional level, the MoAD has said that the budget allocated for the ADS will now be insufficient. The government had allocated US$ 2 million (about Rs 160 million) for developing ADS.
“The consultations also has raised the cost by Rs 2 million. Hence, we have requested the government to provide us with the additional sum that was not included in the previously planned budget,” said Pathak.
The government has received assistance from various donors, including Asian Development Bank, World Bank and United State Agency for International Development (USAID), among others, for developing the ADS.
The ADS, which will replace the APP, will deal on cross-cutting issues like irrigation, agriculture inputs and other crucial sub-sectors of the agriculture. “The APP failed to address the core problems of the farmers. We want to make sure ADS does not repeat the same history,” Dhangal said, referring to perennial scarcity of seeds and fertilizers in the country.

Nepal fails to report country policy updates at WTO in time

The government has dragged its feet to timely report the country´s policy updates to the fellow World Trade Organization (WTO) members even as Nepal´s commitment at the Organization required it to report them by April, 2012.
Though submission of such report, under which Nepal needs to clearly inform the changes and update it effects in trade and other national policies, is not a binding obligations, its compliance is considered crucial in sending a message that the country is investment and trade friendly.
“Submitting policy briefs on time builds a good image of the country among the other member in the WTO regime. Sadly, apathy to adhere to this moral obligation have repeatedly portrayed our image negatively,” said Dr Posh Raj Pandey, former member of the National Planning Commission (NPC), who was also engaged in the process of country´s accession to the WTO.
Officials at the Ministry of Commerce and Supplies (MoCS) supposed to carry out this task admitted of the adverse impact. But they failed to give convincing reasons behind the delay.
“We have already started the preparations and are trying to forward the policy updates at the earliest,” said Ravi Bhattarai, under secretary of MoCS. Though he too remained silent on the reason behind Nepal consistently failing to comply with the obligations, knowledgeable sources said lack of zeal and dedications of the concerned staff themselves were the main reason.
“The reality is that maintaining a good working relationship with the multilateral trading partners is simply not in the priority of the Ministry. Hence, not even the top MoCS care whether the ministry carried out tasks as committed at the WTO,” said the source.
This is not the first time the country missed complying with the WTO commitments since it joined the multilateral trading regime in 2004.
Records of the MoCS shows the country had failed to enact competition and other laws and update trade and other policies on time in the initial years of membership. Though the country has presently fulfilled almost all binding commitments, it has always been dragging its feet to comply with commitments that are not compulsory, but exist as moral obligations.
“Very recently, the Ministry had missed the deadline to submit trade policy review as well,” said Dr Pandey. Although the WTO commitment schedule had sought Nepal to submit the trade policy review in December, 2011, the MoCS did so only in February 2012.
Under the WTO norms, all WTO members need to submit their policy updates to the organization so that other member countries can clearly know the status of tariff lines, rules and regulations related with goods and services they trade on.
Such transparency is considered crucial in maintaining effectiveness of the multilateral trading.