Govt forms committee to prepare guidelines for select investors

The Cabinet has approved formation of a high-level committee, as recommended by Ministry of Physical Planning and Works (MoPPW), to prepare guidelines for selecting investors for Kathmandu-Tarai Fast Track, a national priority project.

Ministry, which was entrusted to open the six-lane 76 km road linking Kathmandu and Nijghad, had recommended the cabinet to form a six-member high level committee to prepare basic documents needed for inviting bids and selecting investors few weeks back.

"The Cabinet endorsed our proposal last week. The committee will start its function immediately," Hariom Srivastav, joint secretary at MoPPW told Republica. The government´s plan is to build the fast track under build-own-operate-and-transfer (BOOT) mechanism.

The high-level committee, which is assigned to prepare the guidelines for selection of investors, is led by by Birendra Bahadur Deuja, former director general of the Department of Road (DoR).

"Ram Ayodhya and Hari Prasad Dhakal, both are former division engineers of DoR, Dinkar Shamara, director general of the DoR and representatives from MoPPW and Ministry of Finance (MoF) are other members of the committee," said Srivastav.

According to Srivastav, the ministry has provided three months to prepare the guideline“. "Ministry will proceed to get expression of interests from different investors after the committee finalizes the guidelines," he said. However, the committee won´t have any authority to screen the final investors.

Ministry has allocated Rs 1.9 million for the committe. "The money will be used as remuneration for members of the committee," Srivastav shared. According to Asian Development Bank´s 2008 estimate, the project will cost Rs 67 billion.

Kathmandu-Tarai Fast Track is one of the prioritized projects of the government. Track opening works on 51 km of the 76-km expressway has already been completed.

Nepal-Bangladesh trade talks in May

Nepal and Bangladesh are aiming to ink an agreement in May, which would pave way for commencing the operation of transit route between the two countries. The draft of the agreement was finalized more than a year ago.

Ministry of Commerce and Supplies (MoCS) has started preparations for the secretary-level talks scheduled to be held in Katmandu in May during which an agreement on transit route will be signed, an official of the ministry said on condition of anonymity. However, the two sides are yet to finalize the exact date of the meeting.

The draft was finalized during a commerce secretary-level talk held in Dhaka in 2010. The meeting had also decided to hold next bilateral meeting in Kathmandu between February and March this year.

According to Naindra Prasad Upadhya, joint secretary at the MoCS, though agendas of the meeting are yet to be finalized, Nepal is seeking for a zero tariff facility from Bangladesh.

However, Nepal does not intend to provide similar facility to Bangladesh. Nepal cannot provide equal and less than equal tariff treatment to any third country as per the revised Trade Agreement 2009 between Nepal and India.

"This is the reason why we are not preparing agenda on tariff," the official said. "We are only looking forward to establishing connectivity with Bangladesh."

The draft of the agreement on bilateral transit includes provisions that allow Nepal to use Mongla and Chittagong ports for international trade. Nepali traders are currently facing problems in transit of goods through Fulbari-Banglabanda route due to complicated transit process.

Nepali exporters also have to bear up with poor road infrastructure along the Kakarvitta-Fulbari-Banglabanada route and hassles caused by Indian security personnel.  

The proposed pact is crucial to boost Nepal´s exports to Bangladesh. According to statistics compiled by Central Bank of Bangladesh, Nepal exported goods worth $7.5 million during the three months between July and September last year, compared with imports of $3.6 million from the country in the same period.

Statistics shows lentils contribute to 75 percent of Nepal´s export to Bangladesh. The agreement, which is expected to improve connectivity between the two countries, is expected to further boost Nepal´s trade with Bangladesh.

Secretary Purshottam Ojha, who was recently transferred to the Prime Minister´s Office from the MoCS, however, said Nepal´s progress in signing a deal with Bangladesh has been very slow.

"Though Bangladesh is ready to ink the pact any time, the progress on our side has been slow," he said.

Court stays strike at Surya Nepal

Surya Nepal, the largest tobacco manufacturing factory of the country has escaped the risk of immediate industrial shut down after Hetauda Appellate Court on Thursday issued a stay order against workers´ strike.

The Appellate Court has also summoned the trade union officials for hearing on April 5 to ascertain the rationale behind their demands.

The Maoist-affiliated Nepal Multinational Companies´ Workers Union (NMCWC), which has been pushing the management to raise perks and benefits, had on Wednesday threatened to shut down the industry from Monday if the company did not fulfill its 11-point demands.

Following the union decision, the management moved the court seeking legal remedy, citing the demands placed by the union were not rationale.

"We have deferred our strike for now,” said Beni Prasad Timilsina, president of NMCWC. Talking to Republica on Saturday over phone, Timilsina said the trade union officials will appear before the court as per its order. “We will take decision on our future course of action depending on what the Court says on the issue,” he stated.

Senior officials of Surya Nepal said they had knocked the court´s door because they believed there were ample rooms to resolve the tension through talks.

“We always wanted to settle the problem within the company,” Rabi KC, corporate vice-president of the Surya Nepal said, adding that the management still feels there is scope of reaching an understanding.

Though trade union officials said they are firm on their stance, they admitted the court´s decision will be crucial.

Meanwhile, both the sides have shown flexibility on the demands after the court´s order.

For instance, the management which increased basic salary of its workers few months back by Rs 1,165 has shown flexibility to increase it by further Rs 400 and allowance by Rs 500.

It has also floated that it will increase gratuity by Rs 20,000 for those who serve the company for 20 years and by Rs 120,000 for those serving for 25 years at the time of retirement from existing Rs 180,000. It has also expressed readiness to increase medical expenses from Rs 300,000 to Rs 400,000 for those workers who become the victim of cancer.

“We have exercised maximum flexibility. This is all we can do at this moment,” said KC.

Trade union, for its part, too has reduced the number of its demand to 7 from 11 points. “But we are firm on other demands like raising basic salary by Rs 2,000, allowance by Rs 1,000 and increasing gratuity paid at the time of retirement to Rs 500,000,” said Timilsina.

The union has also refused to let go its demand that seek job guarantee to off springs of staff in case they die while working. “These are our bottom line,” he stated, adding that the union has dropped its demands like raise in medical insurance and compulsory residential quarters for workers.

Settle labor row, FNCCI tells PM

Federation of Nepalese Chambers of Commerce and Industry, which received a request from Surya Nepal to settle the labor row, has raised the problem faced by the industry with Prime Minister Baburam Bhattarai.

“We informed the PM what actually is the problem in the industry and have requested him to take prompt steps to address the labor tension in one of the largest multinational companies of the country,” said Vaidya.

Referring that Surya Nepal, a subsidiary of ITC Ltd of India, had faced ill-fated closure of its garment unit in 2011 due to labor stir, Vaidya said the government must intervene into its case immediately, particularly as situation in the industry remains volatile.

“It is unfortunate that our industrial sector continues to face grave problems due to rigid labor law and irrational demands coming from the workers,” he stated.

FNCCI has urged the government to take concrete steps to reform labor law if it wants to convince investors that the country has more favorable environment when it celebrate Investment Year in fiscal year 2012/13.

According to Vaidya, PM assured him of taking sincere steps to address Surya Nepal´s problem.

Govt allocates Rs 150m for land acquisition

The Ministry of Finance (MoF) has decided to release Rs 150 million for acquistion of land for the purpose of expanding and upgrading the country´s only existing railway line and building new railway track to connect Rani Sikiyahi and Biratnagar.

The government had floated a plan to upgrade the existing Janakpur-Jayanagar railway line linking Bardibas long ago. Recently, it had also laid plans to build a new railway line from Rani Sikiyahi to Biratnagar.

But Tulsi Prasad Sitaula, secretary at the Ministry of Physical Planning and Works (MoPPW), informed that the sum allocated by MoF was not enough to compensate the people for acquisition of their land.

"We need at least Rs 1.25 billion to acquire land for upgradation of the Janakpur-Bijulpura rail track and building new railway line from Rani Sikiyahi to Biratnagar," he said.

As of now, MoPPW has only been able to collect a total of Rs 390 million -- Rs 190 million from MoF and Rs 200 million from MoPPW.

The Indian government, which had agreed to build the railway track from Rani Sikiyahi to Biratnagar and upgrade the Janakpur-Bijulpura track, has been postponing the construction work citing failure of the Nepal government to arrange adequate land. As per the agreement between Nepal and India, the Indian government will have to bear construction expenses, while the Nepal government will have to allocate money for land acquisition.

The Indian government had agreed to upgrade the railway track from narrow gauge to broad gauge. "We need to acquire the land as soon as possible," secretary Sitaula said.

According to Sitaula, locals have been asked not to use their land for the last one year but the government has not been able to compensate them. He, however, expressed hope that the ministry may be able to start distributing compensation by next week. He also informed that the amount will be initially released to compensate land owners along the Janakpur- Bijulpura railway line. "After this we can request India to start upgrading the tracks," he said.

According to DoR, a total of 220 hectares of land is acquired to upgrade Janakpur-Bijulpura rail track to broad gauge. "Since land in Janakpur is expensive, the amount we have may not be enough," said a DoR official.

Interestingly, parliament´s Public Accounts Committee (PAC) had directed MoF to release the required amount to upgrade and expand the railway track last August.

"The released amount is not sufficient but it somehow is enough to get the work started," said Hridayesh Tripathi, minister for physical planning and works. "The good thing is that, we can at least compensate some of the land owners."

Govt endorses inception report on metro rail

The government has approved the preliminary inception report of metro rail in the Kathmandu Valley and has asked the consulting companies to start feasibility study for laying down a mass rapid transit system to ease traffic in the city.

Korea Transport Institution, Chungsuk Engineering Company, Kunwa Consulting and Engineering Company, Korea Rail Netwrk Authority and two local companies, BDANepal Private Limited and EMRC Private Ltd, that prepared the inception report will start the feasibility study soon, said a senior official at Ministry of Physical Planning and Works (MoPPW).

"They will submit the feasibility report of the Metro by coming October," said Tulsi Prasad Sitaula, secretary at the Ministry. The study will ascertain feasibility of laying railway tracks, types of technology, coaches and other details, and also assess the cost of its development.

As part of the feasibility study, the consulting firms plan to conduct trial run of metro rail in Kalanki and Satdobato area, according to Mahendra Thakur, deputy team leader of the consulting groups. "We have to do that in order to know how much it costs to build the foundation," Thakur said, adding that the trail will give technical inputs on whether it is possible to make underground rail track in the given places or not.

The inception report that the groups shared with experts and top MoPPW officials, inlcuding Minister Hridayesh Tripathi, on Thursday has proposed laying down 5 different lines and 31 stations.

Speaking about problems that might arise once the construction of rail while actually starting the construction of rail tracks in the Kathmandu Valley, Minister Tripathi said that the land pooling could emerge as a major problem.

"But Metro in Kathmandu is a highly prioritized program of the government and we will press ahead with full dedication to implement it," he stated. Tripathi also noted that the project would be completely handled by expert technicians, but he requested the consulting firms to focus on minimizing the need of land acquisition as far as possible.

Among others, the inception report explicitly cites that the system should have a dedicated power system of its own to ensure uninterrupted supply of electricity.
"I am hopeful that we will be able to make such arrangement in the near future," said Tripathi.

The study team members said that they will develop a complete design concept of the metro by the end of coming August. After that they will begin financial assessments.

"The cost developing metro will be known only after the completion of feasibility report," said Thakur.

Given the technical preciseness and other factors, Secretary Sitaula said that the government will develop the railway lines in different phases. "Therefore, I request the study team also to prioritize the lines," he said.

Department of Railway (DoR) also shared the preliminary report of detail project report (DPR) of Simara-Bardibas segment and Simara-Birgunj linkage of the proposed East-West Railway Line. Officials said the completed report of the DPR will come out in 10 months.

Maoist trade union threaten to shut down Surya Nepal from Monday

In a fresh case of worsening industrial relations in the country, Maoist-affiliated Nepal Multinational Companies´ Workers Union (NMCWU) at Surya Nepal has threatened to shut down the country´s largest tobacco manufacturing company from Monday, if the management did not fulfill its demands.

The union has submitted 11-point demand to the management. It announced the strike after majority of its members voted to go for the strike in case the management did not heed their demands.

“We have already informed our decision to the labor office and the company management,” said Devendra Sitaula, senior member of the workers´ union, who also took part in talks with the management.

He informed Republica that the workers were demanding the management to raise basic salary by Rs 2,500, double the life insurance cover to Rs 200,000 and pay Rs 1 million in gratuity at the time of retirement. The union has also demanded the management to deposit 2 percent of its annual profit in the workers welfare fund and provide permanent job to next of kin in case the workers died while working.

The union has also demanded with the management to allocate 50 percent of total vacant jobs to the offspring of workers, provide grant to the workers to construct houses and increase the retirement age to 58 from existing 55 years, among others.

Surya Nepal staff said that the workers and the management had sat for rounds of talks in the presence of representatives of local labor office. But the talks failed to settle the differences.

During the talks, the management had offered to pay them Rs 1,600 in addition to perks and benefits they were enjoying now. But union officials refused the offer.
“We want the management to address our demands in a package. We will not agree on a piecemeal deal,” said Sitaula.

Meanwhile, Surya Nepal has knocked on the doors of the Department of Labor as well as Federation of Nepalese Chambers of Commerce and Industry to settle the problem.

Man Bahadur BK, director general of the Department of Labor, said the department has taken up Surya Nepal´s request seriously. “We will forward the request to Labor Relations Improvement Committee and take immediate steps to avoid the looming shutdown,” he added.

Water transport for trade and commerce not feasible: Report

For years the government believed the country could make use of its rivers for water transportation. But a latest feasibility study conducted to assess such possibilities concluded that operating water transportation in three major rivers -- Koshi, Gandaki and Bheri was almost impossible due to their irratic flow pattern.

Two private consulting companies that presented preliminary report conducted under the terms of Ministry of Physical Planning and Works (MoPPW) said water transportation was not commercially viable in Nepal. However, the report notes that 11 out of 14 different sections of those rivers can be used for recreational purposes for tourism.

"River flow pattern that affect the operation of vessel vary greatly in those rivers. Though jet boats can be operated by constructing dams and other physical infrastructures, the cost involved in such development are so high, those make commercial operations of water transportation unviable," reads the report.

Officials who were sought to make comments on report said that this was a first step towards studying the potential of water transport in the country. "This report does not show any prospects of building water transport in these rivers. However, we are ready to do more study to see if there are still any chances of utilizing the rivers for transportation," said one of the senior officials of the ministry.

Ironically, the study team which was solely focused on finding the possibilities for water transportation couldn´t express the confidence in their own report. "Many aspects are yet to be studied though this is what we found," Padam Shahi, team leader of the study said, "Water transportation might be potential if we analyze it through the complementary perspectives but this is not comparing to other means of transportation."

The feasibility report which even failed to estimate the total cost of water transportation in three rivers has recommended making some short term plan to experiment the viability of the water transportation. Moreover, the study report proposed only two sections of the Bheri river for transport namely, Kamalpur to Bhtechaur and Ghatgaun to Taranga.

The report studied five sections of the Koshi, six sections of the Gandaki and three sections of the Bheri. "Some of the sections are already used for recreation and transport purpose," Shahi said, presenting the study report on Wednesday, "Even in those sections, locally manufactured boats are in use, this can´t be called as sound water transportation."

"This report has an indication that we can´t develop water transportation as substitutes to road transportation," senior official at the ministry said, "We had assigned companies to do the feasibility study in those rivers which were anticipated to be useful for the water transportation. After this report, I don´t think we would be able to develop water transportation in other rivers."

However, Dolalghat to Chatara and Chatara to Tribeni sections of Koshi River, Devghat to Ramdi and Mugling to Fishlin sections of Gandaki river are in use for recreational purpose already.