IFC suggests reforms

The International Finance Corporation (IFC), a member of the World Bank Group, has recommended a series of reform measures to the government to create an investment friendly environment by removing constraints for private sector development in the country.
The IFC has suggested that the government bring reforms in areas such as the entry and exit process in business, competition, finance, infrastructure and property rights, among others.
“Political instability continues to be an additional barrier for economic growth and investment promotion in the country,” states the reform memorandum prepared by the IFC. “Yet, the government can make many changes which don´t require legislative approval.”
The IFC´s recommendations include 57 measures in different sectors to create a better situation for doing business in the country.
The reform memorandum, discussed on Thursday by representatives of the private sector and government officials including experts, has outlined 30 short-term interventions from the government that could help create better investment climate.
Similarly, the memorandum has also suggested 27 medium and long-term changes to make the situation more conducive for business.
The reform recommendations were developed mainly based on Nepal´s low ranking in the global map in terms of different indicators such as Doing Business Index and Enterprises Survey, among others.

Donors concerned over low expenditure

Nepal´s development partners, including the World Bank (WB) and the Asian Development Bank (ADB), have identified shortfall in capital expenditure and frequent transfer of human resources including government officials and project staffs as the major hurdles for the country´s development.
"Untimely transfer of senior officials from the implementing ministries and project chiefs has affected the progress in the donor-funded projects," Tahseen Sayed, the WB´s country manager for Nepal, said on Thursday.
"It is unfortunate that cases of low capital expenditure in projects are common every fiscal year," Sayed said at a meeting organized to formally unveil the Nepal Portfolio Performance Review (NPPR) 2012.
Kenichi Yokoyama, the country director of the ADB for Nepal, also blamed a sharp fall in capital expenditure for the slowing economic progress of the country.
The government´s data shows that capital expenditure in the first four months of Fiscal Year 2012/13 was limited to 15 percent of total allocation of Rs 63 billion.
The meeting focused on nine different areas such as agriculture, energy, local governance, mutual-accountability, procurement process and management of donor funded projects.

Govt intensifies talks with JICA, ADB for Tanahun Hydro

The government has intensified negotiations with funding partners to finalize terms and conditions for early development of Tanahun Hydropower Project (140 MW).
"We had a negotiation meeting with Japan International Cooperation Agency (JICA) on Wednesday. We discussed most of the issues related to terms and conditions for soft loan,” Madhu Kumar Marasini, joint secretary at the Ministry of Finance, told Republica.
JICA, which has shown interest to provide soft loan of US$ 180 million for the project, is positive about finalizing the agreement at the earliest, according to Marasini.
“However, the negotiations will be lengthy because of the size of the project and multiple funding partners involved," he said.
Marasini said negotiation meeting with Asian Development Bank (ADB) -- another major funding partner - will be held on January 27. ADB is planning to provide soft loan of $150 million for the project.
“We will discuss terms and conditions of the loan and other related issues with ADB officials in the upcoming meeting,” said Marasini.
Nepal Electricity Authority (NEA) will develop the project. Upon completion, it will be the second largest storage-type project in the country after Kulekhani.
“Hopefully, we will be able to sign loan agreements with both the funding partners within a couple of months," said Marasini.
European Investment Bank (EIB) has also pledged to lend $63 million for the project which was previously known as Upper Seti Hydropower Project.
According to finance ministry officials, other partners, including the government, will fill the funding gap for the project that is estimated to cost around $450 million, as per the revised calculation.
The national pride project based in Byas Municipality will start power generation power by 2020 if the construction works begin as planned in 2014.
"It is yet to be decided how much stake the NEA will hold in the project," an NEA official told Republica. "It will be decided after the government signs agreements with all the funding partners."
Separate teams from ADB and JICA had visited Nepal couple of months back to study the project and hold preliminary discussions with the officials concerned.

'NPBCL lacks a convincing payback plan'

Nepal Purwadhar Bikas Company Limited (NPBCL), which is planning to develop the much-touted Kathmandu-Hetauda Tunnel Highway through public funding and institutional investments, does not have convincing plans to repay the investors, government officials said on Wednesday.
"People will get huge benefit from this project and so do the country´s economy," Kush Kumar Joshi, president of the NPBCL, said at an interaction program on Wednesday. He, however, couldn´t elaborate how the company intends to repay the people investing in the project.
Officials of Ministry of Physical Planning and Transport Management said the company, which aims to generate investment from public, should have a clear plan on how intend to repay them. “The company should have a convincing plan to repay the public and institutional investors,” said a ministry official, preferring anonymity.
The company, which aims to collect investment from around 264,000 people, has not developed any framework on how the benefits will be shared among promoters of the company and other investors. "The modality of sharing benefits between promoters and public investors is yet to be decided," Joshi said.
The project, which is estimated to cost Rs 20 billion, will connect Kathmandu with Hetauda with a four-lane road.
The government officials have said the estimated cost is too low and funding sources are not clearly demonstrated in the detailed project report (DPR) that the NPBCL submitted in November 2012.
However, officials of NPBCL claimed that cost estimation was well calculated and funding source is clear as many institutions and people have already expressed commitments to invest in the project.
“The success of the project depends on people´s participation and collective work of local people, domestic contractors, professional institutions and banking sector of the country," Joshi said at the program Society of Economic Journalists, Nepal (SEJON).
The project, which is targeted to be completed within four years, will help the country save Rs 22 billion a year by reducing fuel imports, argue officials of the company.
“Our target is to make people able to travel from Kathmandu to Hetauda and vice versa in 45 minutes,” Lal Krishna KC, vice president of the company, said.

Govt to conduct sector-wise review of dev results

The government has decided to conduct sector-wise review of development results, aiming to get the picture of actual progress in the field in terms of achievements against targets.
For the first time in the decade-long history of portfolio performance review, the meeting of Nepal Portfolio Performance Review (NPPR) 2012 scheduled for Wednesday will review four different sectors -- agriculture, local governance, roads and energy.
"The government has decided to carry out sector-wise review of the development results now onwards to know the actual progress in the field," said Kailash Raj Pokharel, under secretary at the Ministry of Finance (MoF) and the coordinator of the NPPR meeting.
The country, which started receiving foreign aid for development from 1956, had started to conduct the portfolio performance review from 2000 based on themes such as public finance management, procurement, human resources, mutual accountability, and managing for development results.
"The sector-wise review of development activities will help us realize the actual benefit that people received from foreign aid," Pokharel told Republica on Tuesday.
Highlighting the government´s paradigm shift in the methodology of reviewing development projects, Pokharel said the development partners would now get to know the actual output generated by the assistance they provided.
The NPPR meeting that mainly focuses on reviewing projects and programs that are under implementation will also discuss on issues such as coordination among development partners themselves.
"We will review the achievements against targets of 2011 through group works," Pokharel added.
Meanwhile, four development partners -- Australia, Denmark, International Fund for Agricultural Development (IFAD) and United State Agency for International Development (USADI) -- have joined the core membership of the NPPR in 2012.
“Now, 11 development partners have become core members of the NPPR," said Pokharel.
Asian Development Bank (ADB), Department for International Development (UK), European Union, Japan International Cooperation Agency (JICA), United Nations, World Bank and Norway are the other development partners in the core membership of NPPR.
According to the report prepared for the meeting, the overall progress of NPPR 2011 action plan implementation has remained satisfactory. "The progress scenario his highly satisfactory in public finance management, satisfactory in public procurement, moderately satisfactory in human resource management and unsatisfactory in mutual accountability," reads the report.
The report states that internal auditing is weak in public finance management. “Lack of fairness in competitive bidding, absence of procurement plans, frequent staff transfer, inadequate and unsystematic training to the civil servants, lack of result based budgeting system and lack of transparency and predictability are major challenges in implementation of development projects," the report outlines.

Govt to realign Fast Track in Khokana

The government has changed the alignment of the Kathmandu-Tarai Fast Track at Khokana area of Lalitpur in an effort to reduce land acquisition cost. The change in plan includes a reduction in the width of the road by 50 percent to 50 meter.
"The Fast Track will now run along the Bagmati river bank instead of Danuwar village area," Rajendra Raj Sharma, a project manager of the Fast Track, told Republica on Tuesday.
The government has decided to acquire just 800 ropanis of land in the Khokana area to avoid high cost of land acquisition. "The initial plan was to acquire a total of 1,600 ropanis of land within the 8km area of Khokana," Sharma said.
Land acquisition in the Khokana area has been a major hurdle for developing the Fast Track that will connect Kathmandu and Nijghad by a 76km road. "The new alignment of the Fast Track in the Khokana area is a ministerial level decision," Sharma added.
As per the calculation of the government, it will cost more than Rs 5 billion to acquire 800 ropanis of land in the Khokana area. "The actual figure will come out only after a land evaluation committee decides on how much to pay for acquiring the land," Tulasi Prasad Sitaula, secretary at the Ministry of Physical Planning, Works and Transport Management (MoPPWTM) told Republica.
The progress report of the government for the first four months of the fiscal year 2012/13 has categorically identified land acquisition as a major problem for the project development. As of now, 63km track opening of the Fast Track has been completed.
Additionally, the government has yet to conduct environment impact assessment (EIA) of the 8.5km area in Khokana. The quarterly report that was presented in the meeting of National Development Problem Resolution Committee does not include the progress report of the Fast Track.
Meanwhile, the government has short-listed three Indian firms for developing the Fast Track, namely, Reliance Infrastructure, Larsen & Tourbo (L&T) and Infrastructure Leasing & Financial Services (IL&FS). As per the cost estimation of Asian Development Bank (ADB) in 2008, the project is estimated to cost Rs 67 billion.
A total of nine companies, including Nepali, South Korean and Indian firms had shown interest in the construction of the project.

Govt failing to track status of 74 P1 projects

Although the government has put infrastructure development in its high priority, it is failing to track progress status of 74 priority-I (P1) and three national pride projects.
The 28th meeting of the National Development Problem Resolution Committee (NDPRC) chaired by Prime Minister Babu Ram Bhattarai on Sunday couldn´t show how 27 percent of 282 P1 projects and three national pride projects are faring.
"Unfortunately, we haven´t received progress reports of 74 P1 projects and three national pride projects from different ministries,"
Dipendra Bahadur Kshetry, vice-chairperson of the National Planning Commission (NPC) said, presenting status of 751 projects that are currently under implementation.
More than 50 percent of the P1 projects that have not reported their status are under the Ministry of Physical Planning, Works and Transport Management (MoPPWTM). According to the Kshetry, other P1 projects that have not submitted progress report fall under Ministry of Industry (MoI), Ministry of Energy (MoE) and Ministry of Federal Affairs and Local Development (MoFALD).
The implementation situation of 17 national pride projects is quite dismal. The government has just made 35 percent financial and 40 percent physical progress on the national pride projects over the first four months of 2012/13.
The government officials have highlighted different reasons such as land acquisition, weak coordination among line ministries, lack of cooperation from the Ministry of Finance (MoF) and NPC as the major reasons behind slow progress of national pride projects.
Speaking at the meeting, Chief Secretary Lila Mani Paudel said political parties were creating hurdles in land acquisition at the local level. “Local leaders of different political parties are forcing the government to set higher evaluation rate for land acquisition,” he added. “We can´t speed up project implementation unless such tendency is brought to an end.”
Paudel said implementation of donor funded projects is affected due to improper use of resources. “Unnecessary parachute-consultants, expensive vehicles and lack of transparency are putting some of those projects in jeopardy," Paudel said, adding: "It´s high time we forced our donor agencies to follow our own procurement policy."
The government has even failed to keep track of projects that were already planned and started by previous governments. The dismal performance of the concerned agencies to implement national pride projects such as Kathmandu-Tarai Fast Track, Mid-Hill Highway, East-West Railway, Postal Highway, North-South Highway, Melamchi Drinking Water Project, and Bhairawa Regional Airport, among others drew attention of the attention of Prime Minister Dr Babu Ram Bhattarai.
"It´s unfortunate that even the implementation of national projects have remained quite disappointing," Bhattarai said in the meeting. "I ask all the ministries and top level officials to work in time to implement the national pride projects."
In yet another setback to the government, capital expenditure over the first four months of 2012/13 remained at just 15 percent of total Rs 62 billion. "The capital expenditure is pretty low as most of the high level officials from different ministries are busy in foreign visits and not paying attention to development activities," Finance Secretary Shanta Raj Subedi said. "The recurrent expenditure is high in almost all the ministries."
Finance Minister Barsha Man Pun said none of the ministry has made appreciable progress. “We have to focus on capital expenditure," Pun said in the meeting.

Govt tells NPBCL to clarify financing for tunnel project

The government has asked Nepal Purwadhar Bikas Development Company (NPBCL) to revise its detailed project report (DPR) on Kathmandu-Hetauda tunnel highway and clearly demonstrate the sources of finance for construction of the project.
The Ministry of Physical Planning, Works and Transport Management (MoPPWTM) after studying the DPR has asked NPBCL to demonstrate financial sources and rethink the cost estimate of the project. The company had submitted the DPR to the ministry almost a month ago.
"Some points in the report especially about the sources of finance for project construction are unclear," Tulasi Prasad Sitaula, secretary at the MoPPWTM , told Republica. "It seems the estimated cost of the project is based on unrealistic calculation." Sitaula further said that the government has asked the company to make a carefully estimate the cost.
The much-touted tunnel highway, which will connect Kathmandu and Hetauda will be 50 km long. After being convinced by the DPR report prepared by NPBCL, the government is mulling awarding the project to NPBCL under Build-Own-Operate-Transfer (BOOT) Act.
The ministry has also asked NPBCL to limit the concession period just at 30 years. "We have told NPBCL that the government cannot allow NPBCL to operate the project for more than 30 years. They have asked for 35 years but existing law -- BOOT Act -- does not allow this," Sitaula said. According to BOOT Act, the government can give just 30 years to operate project to the contractors.
The company had submitted its report claiming that it would generate money from sources such as public investment, consortium of different business groups, investment from non-resident Nepalis (NRNs) and providing shares to the workers and contractors in return for their labor. "We also are working for generating institutional finance from different public and private institutions," Lal Krishna KC, vice chairperson of the NPBCL said.
The company, which is claiming that it would complete the construction of the project in four years, had submitted the report with cost estimation of Rs 22 billion. "That is initial cost estimation. The cost varies as per the quality of materials that are used for construction and structure of the road that we opt to build," KC said.
The ministry has made it clear that the report should be clear in every single term to make the project implementation smooth and timely. "We will move forth and take a decision after the company comes up with a revised report. Government´s decision will be based mainly on the sources of finance for project development from the company," Sitaula added.

Independent NBF secretariat in the offing

The government and the International Finance Corporation (IFC), a member of the World Bank Group, on Friday signed an agreement to establish an independent secretariat of the Nepal Business Forum (NBF).
The agreement was signed between Krishna Gayawali, secretary of the Ministry of Industry (MoI), and Valentiono S Bagatsing, the IFC resident representative in Nepal.
The secretariat of the NBF, currently located at the IFC office, is being shifted to a new place so that stakeholders can have easy access to the Forum, which, in turn, is expected to enhance effectiveness of reform programs.
The NBF, which came into operation in 2010, is a common platform for public and the private sector, where dialogues on reforms that need to be implemented and ways to boost economic activities, among others, are held. The NBF, which functions through different working group committees, such as industrial investment promotion, export promotion and trade facilitation and infrastructure, among others, also aims at strengthening the capacity of public and private sectors.
Industry Minister Anil Kumar Jha, who was present at the signing ceremony, said the government was always ready to make necessary changes to laws and regulations to uplift the country´s business sector and spur economic growth.
"The first and foremost priority of the government is to boost the confidence of the private sector and accelerate the pace of economic growth," Jha said.
Gayawali said the new independent NBF secretariat will be more effective in conducting open and fruitful dialogues between the private and public sectors.
To promote public-private dialogue, the IFC, the government and the private sector have allocated a sum of US$1 million, of which 15 percent will be contributed by the government, 38 percent by the private sector and the rest by the IFC.
"However, the cost borne by the government will also include non-cash support, like extension of office space," Gayawali said at the signing ceremony.
Private sector representatives, meanwhile, have expressed their commitment to support the independent secretariat of the NBF.
Suraj Vaidya, president of the Federation of Nepalese Chambers of Commerce and Industry (FNCCI), and Narendra Kumar Basnyat, president of the Confederation of Nepalese Industries (CNI), said that the NBF played an important role in making public-private dialogue more meaningful.

NIB trudges on through high expectations and enormous challenges

Expectations are high and challenges are enormous, as Nepal Investment Board (NIB) has found out in the more than a year that it has been working to attract investment in big projects.
The NIB, a high level state body founded in late 2011 to facilitate foreign investment for mega projects in the country, is also the focal agency to implement Nepal Investment Year 2012/13, a campaign to lure big investment by creating an investment friendly climate in the country.
While announcing the campaign in July 2011, the government had declared that it would bring in US$ 1 billion in the first six months of the investment year. Then in May 2012, the government handed over 14 mega projects - which included 5 hydropower projects -- to the NIB to deal with foreign investors and implement them on a fast-track basis.
Despite its efforts, the NIB couldn´t live up to the expectations of injecting fresh investment and ultimately creating new job opportunities.
More than a year has gone by since NIB was formed, but not a single mega project has materialized. The template for the Project Development Agreement (PDA) for big projects itself is also yet to be finalized by NIB.
The NIB officials, though, say they are doing their best not to break the promises they made. “We are working seriously to kick-start at least one project that is significant for the country´s development,” Radesh Pant, chief executive officer of the NIB, told Republica.
Despite the deepening political imbroglio and inconsistent government policies, some foreign investors are still vying to grab investment prospects in Nepal.
It is, however, a good sign that investors from countries such as South Korea, France, Germany, Turkey, Brazil, China, India and the USA have shown interest in injecting fresh investment, especially in infrastructure projects like transportation, cement industries, road construction and hydro power.
“We have been able to create some interest among potential investors,” said Pant.
As an underdeveloped nation, Nepal needs foreign direct investment (FDI) in almost every sector of economy to oil the engine of economic growth.
However, Nepal´s current investment climate is not conducive to attracting investment from abroad, or even from domestic sources.
The task of providing instant and smooth services to investors is still not that much impressive despite some efforts to facilitate more investment.
The decade-long Maoist conflict that badly paralyzed the overall development of the country is over. But the situation is still not rosy for investment prospects.
Domestic investors, who are well aware of the economic situation and investment climate of the country, are still not convinced to invest more.
"Most of the investors are in ´wait-and-see´ mood," Pashupati Murarka, vice-president of the Federation of Nepalese Chambers of Commerce and Industry (FNCCI) said.
The NIB has been carrying out the task of implementing projects such as West Seti (950 megawatts), Arun III (900 MW), Tamakoshi III (650 MW), Upper Karnali (900 MW) and Upper Marsyangdi (600 MW), management and upgradation of Tribhuvan International Airport (TIA) project, Waste Management Project and developing the PDA.
The PDA template, which is still to see its finishing touches, is specifically for hydropower projects (above 500 MW). The template -- a base document to negotiate with mega investors -- will prove to be significant for the development of mega hydropower projects in the country.
NIB is in consultation with power developers like Indian giants Sutlej Jal Vidyut Nigam and GMR, and SN Power of Norway, seeking their inputs while developing the template.
NIB is in close communication with a Chinese firm -- Three Gorges -- to take forward the West Seti project that they are conducting technical and financial assessments for.
The country and its prospects are shrouded in political and economic uncertainty, but still the situation can be improved enough to draw new investment. Political stability and policy consistency of the government, local business people say, will create a favorable environment for investment.
“There is no doubt that we will see a flood of investment if the government walks the talk and goes beyond rhetoric and lip service for creating investment climate in the country,” added Murarka.
´Political consensus key for investment´
Nepal Investment Board (NIB) came into existence more than a year ago with the job of luring foreign investment for mega projects into the country amid a worsening investment climate. One year down the line, people´s expectations have been dashed as no substantial progress has been made toward securing even a single mega project. Radesh Pant, CEO of NIB since December 2011, talked with Republica about challenges and prospects of new investments in Nepal. Excerpts
What initiatives have you taken as the NIB CEO to promote investment in Nepal?
Definitely progress has been slow to fulfill the expectations that people had from us. However, we are working on establishing a system and framing policies that are crucial for facilitating foreign investors in our country. The Project Development Agreement (PDA) template that is needed before starting negotiations with developers of mega hydro projects is almost at its final stages.
How are investors (both foreign and domestic) responding to our invitation for investment, given the situation of the country?
After over a year in office as NIB CEO, I have found impressive response from investors who are showing interest in investing in Nepal if policy consistency and investment security is guaranteed.
How do you assess the future for investment in Nepal? Are you satisfied with what has been done so far by NIB?
Though there are many things to do to secure investment for mega projects in Nepal, I am satisfied with what has been achieved so far. We are still optimistic about increased flow of investment in the future given the positive responses from those investors that we have so far approached. However, we have to identify which among them are genuine investors to ensure timely implementation of the projects.
What do you think we need the most to bring in more foreign investment?
Political parties should build consensus among themselves to restore the confidence of investors. I have a long held conviction that there should be agreement amongst political parties to at least create an environment for investment in the projects that are crucial for economic development. There should also be a consistency in the state´s policies towards the economy and investment.

FDI commitment up 60% in 5 months

The foreign direct investment (FDI) commitment went up by an impressive 60 percent in the first five months of the current fiscal year despite the odds faced by the country.
Statistics compiled by the Department of Industry (DoI) show FDI commitment topping Rs 29.9 billion in the five-month period to mid-December.
If the entire amount pledged by foreign investors enters Nepal, around 12,000 additional jobs will be created in sectors such as agriculture, manufacturing, tourism and services.
But since the country does not have an effective mechanism to monitor whether the commitment made by foreign investors was fulfilled, many may not know how much of the amount pledged by them actually flowed into the country.
"The investment commitment always seems encouraging, but the actual flow is quite disappointing," a DoI official told Republica on condition of anonymity because of his limitation to speak with the media.
Pashupati Murarka, vice president of the Federation of Nepalese Chambers of Commerce and Industry, also shared DoI official´s view.
"I don´t think all foreign investors fulfill their investment commitments," he said. "But the rise in FDI commitment definitely portrays interest shown by foreigners to come and invest in Nepal, as it costs time and money to register companies here.”
However, this interest shown by foreign investors, according to Murarka, is marred by political instability and other constraints, such as power shortage and labor problems.
The latest DoI statistics show FDI commitment in the energy sector was higher than in other sectors this year.
The FDI commitment in the energy sector stood at Rs 18.38 billion in the five-month period--up 72 percent than in the same period last fiscal year.
"This year, a total of 28 firms expressed commitment to invest in the energy sector, as against 12 in the same period last year," the statistics show.
The response received by the country´s service sector was also impressive, as FDI commitment in the sector surged by 53 percent to Rs 2 billion in the five-month period.
If this commitment translates into reality, a total of 1,976 new jobs would be added in the service sector alone.
Unlike in energy and service sectors, FDI commitment in the manufacturing sector was not encouraging, as pledges made by foreigners to invest in the sector fell by three percent in the review period.
The sector had attracted Rs 6.3 billion in FDI commitment in the first five months of last fiscal year, which dropped to Rs 6.1 billion in the five-month period this year. If the amount pledged by foreign investors enters Nepal, a total of 4,865 jobs would be created.

India cuts power supply by 25 MW

India has unilaterally and without notification cut power supply to Nepal by around 25 megawatts. India had recently promised to provide an additional 55 megawatts for this winter.
"India has cut supply of a total of 25 MW to different points such as Birgunj, Janakpur, Hetauda and Rajbiraj without notifying us," Rameshwar Yadav, managing director of Nepal Electricity Authority (NEA) told Republica on Tuesday.
Nepal was importing around 115 MW from India and was expecting additional 55 MW as agreed during the visit to India by President Ram Baran Yadav in December last year.
"We have been trying to communicate with Indian officials about this sudden cut from the Uttar Pradesh state," Yadav said, adding, "No Indian official is available."
According to Yadav, India has cut power supply without apparent reason. "I don´t think this is the decision of the central government of India but of the state government of Uttar Pradesh."
Interestingly, India has cut down power just a week after President Yadav returned from India. A team of officials had visited India a few days ago purportedly to prepare ground for importing additional 55 MW. "We had a very nice conversation with Indian officials on issues including additional power and transmission lines," Yadav said.
After Monday´s cut in supply, NEA has not yet made any decision to reschedule the load-shedding hours. "We still don´t know whether the cut in supply is temporary or permanent," an official said.
Yadav also said NEA is still trying to contact Indian officials regarding the cut in supply.
NEA officials said the country could see load-shedding up to 20 hours a day if the cut in supply from India is permanent.

'Unfair treaties with India put Nepal's interest at risk'

The topic of water resources--the most crucial issue in the bilateral relations between Nepal and India--has so far been neglected by both the countries and Nepal is bearing the brunt owing to this oversight, experts have said.
"Our bilateral treaties with India are not equitable and we have not been able to reap maximum benefit from our own water resources because of obstruction created by the treaties we signed with India," Prakash Chandra Lohani, former finance minister and vice chairman of the Rastriya Janashakti Party, said on Tuesday.
Speaking at a program organized in Kathmandu, Lohani said that the reason behind this is the laxity shown by Nepali politicians.
"The issues between Nepal and India can´t be dealt just by bureaucrats and diplomats," Lohani said.
Giving examples of Koshi and Gandaki, Lohani said that Nepal has succumbed to India by signing those treaties.
Yubaraj Sangroula, former attorney general, said: “Projects like Koshi, Gandaki and others have been tools of election maneuvers and pseudo-nationalism."
But no politician, according to Sangroula, “has taken those agreements seriously and reflected on how much people have lost in the course of Nepal´s development".
"Looking from a larger perspective, people from all over the South Asian region have not benefited from treaties on water resources," Sangoula said.
He was speaking at the launching ceremony of a book titled ´International Watercourses Law and a Perspective on Nepal-India Cooperation´ written by Surya Nath Upadhyay, former chief commissioner of the Commission for the Investigation of Abuse of Authority (CIAA).
The book that delves into most of the crucial agreements between Nepal and India and international water laws, among other, has argued that the relationship between Nepal and India was never friendly.
"India was never and will never be Nepal´s friend, and we have always lost in most of the negotiations," Upadhayay said.
Additionally, experts also claimed that the recent Bilateral Investment Promotion and Protection Agreement (BIPPA) has a clause that takes away Nepal´s right to use the Indian territory to reach the sea as a land locked country.
"BIPPA is against our national interest but that might not be intentional," Sangroula said. "Such mistake occurs due to lack of technical understanding and our inability to meticulously go through each and every clause."

Govt to seek soft loans to develop two sections

The government has said that it would seek soft loan from bilateral and multilateral development partners, including international investment banks, to develop a section of East-West Electric Railway -- Simara-Bardibas (108 km) -- and Simara-Birgunj (28 km) link line.
Tulasi Prasad Sitaula, secretary at the Ministry of Physical Planning, Works and Transport Management, said this after receiving draft of the detailed project report (DPR) of the mega infrastructure project on Sunday.
“The draft DPR has paved the way for the government to talk with development partners and investment banks for developing the project,” Sitaula said.
A consortium of six consulting firms -- Chungsuk Engineering, Korea Railway Network Authority and Kunhwa Consulting and Engineering of South Korea; Consulting Technocrats of India; and Fulbright Consultancy and Shah Consulting of Nepal -- had prepared the draft.
According to the draft, Rs 120 billion would be required to develop these two sections.
The consortium has also suggested the government to develop the sections in different phases.
“Taking into consideration the high construction cost, it would be practical to develop the project in three phases -- 54 km segment in the first phase, another 54 km segment in the second phase and remaining 28 km in the third phase,” the draft DPR states. “It would take at least five years to construct each phase.”
The railway line will have two cross border links -- Simara-Birgunj-Raxaul and Bardibas-Janakpur-Jayanagar. It will have 11 stations in places such as Bhawanipur, Manahara, Parsauna, Chocha, Chnadranigahapur, Karmaiya, Dhukauli, Jabdi, Barantol and Belgachhi.
Minister for Physical Planning, Works and Transport Management Hridayesh Tripathi said land acquisition, energy crisis and availability of funds were the project´s major bottlenecks. “But we are serious about addressing these bottlenecks.”
Tripathi also said the government would study whether the alignments suggested by report are feasible from the land acquisition perspective. “The alignments should not go through the major towns and where land price is too high,” Tripathi said.
According to the report, the government should acquire 370.5 hectares of land for the project

Govt inks performance contracts for nine infrastructure projects

In its bid to ensure timely implementation of national pride projects, the government on Sunday inked performance contracts with chiefs of nine different projects ranging from Kathmandu-Terai Fast Track and Mid-hill Highway to Postal Highway and North-south Highway.
The performance contracts--that insulate project chiefs and team members from sudden removal or transfer--were signed between Tulasi Prasad Sitaula, secretary at the Ministry of Physical Planning, Works and Transport Management (MoPPWTM) and respective project chiefs.
According to a statement issued by the Office of the Prime Minister and Council of Ministers (OMPCM), Bal Ram Mishra, chief of the eastern part of the Mid-hill Highway project, Umesh Jha, chief of the western part of the Mid-hill Highway project, Mukti Gautam, chief of the Postal Highway project, Devi Shakya, chief of the North-south Highway project and Rajendra Raj Sharma, chief of the fast track project, among others, signed separate performance contracts with the MoPPWTM secretary.
“These contracts make it mandatory for all project chiefs to meet targets set for the fiscal year 2012/13,” says the statement.
Mishra and Jha, for instance, have been assigned to complete tasks of opening tracks, developing bridges and upgrading roads on eastern and western parts of the Mid-hill Highway that connects Chiyobhanjyang in the east and Jhulaghat in the west by a 1,750km road.
OPMCM Secretary Krishna Hari Baskota said the government also has a plan to establish around 25 urban hubs in different parts of the Mid-hill Highway.
Similarly, Gautam has been assigned to complete the task of land acquisition, track opening and bridge construction on the Postal Highway (1,824 km). The highway, being built with the financial support of the Indian government, comprises 125 bridges. According to the statement, the government is also planning to request India to develop bridges on the highway.
The chief of much touted fast track project that connects Kathmandu and Nijgadh, on the other hand, has agreed to complete land acquisition and track opening tasks this fiscal year.
Currently, the Nepal Army is opening the 76-km track, of which 56 km has been opened.
“I am confident that the implementation of national pride projects will be smooth and these performance contracts will allow project implementing teams to work with confidence,” the statement quoted MoPPWTM Secretary Sitaula as saying.
Last week, the government had signed performance contracts with the project chiefs of three irrigation projects, namely Babai, Rani Jamara and Sikta.

Global FDI inflows falls by 17 pc, Nepal's by 30 pc in 2011/12

The foreign direct investment (FDI) commitment fell by 30 percent to US$ 84 million during 2012 compared to a year earlier. The statistics compiled at the Department of Industry (DoI). The whopping decline in FDI inflows has resulted in 17 percent fall in employment generation with creation of only 9,050 new jobs in the country.The decline in FDI inflows was witnessed in crucial sectors of the national economy such as manufacturing and agriculture.

Meanwhile, the scenario of global FDI inflow is also not satisfactory.

• Global foreign direct investment (FDI) inflows declined by 18% in 2012, to an estimated US$1.3 trillion (figure) – a level close to the trough reached in 2009 – due mainly to macroeconomic fragility and policy uncertainty for investors.

• The FDI recovery that had started in 2010 and 2011 will take longer than expected. FDI flows could rise moderately over 2013-2014, although significant risks to this scenario persist.

• The strong decline of FDI flows presents a stark contrast to other macroeconomic variables, including GDP, trade and employment growth which remain in positive territory

• In developed countries FDI flows fell drastically to values last seen almost ten years ago. The majority of EU countries saw significant drops in FDI flows with the total fall amounting to some US$150 billion. Unites States FDI flows also fell by US$80 billion. FDI flows to developing economies, for the first time ever, exceeded those to developed countries, by some US$130 billion.

• FDI flows to developing economies remained resilient, declining only 3%. Flows to developing Asia lost some momentum, although they remained at historically high levels. Latin America and Africa saw a small increase.

• Cross-border merger and acquisitions (M&As) data shows that developed country investors are divesting massively while investors from developing countries are bucking the trend. Their share in cross-border M&A purchases rose to a record 37%.