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

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

Czech Republic shows interest to boost investment in Nepal

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

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

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

Inability to define 'Sick industry' delays relief packages

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

 

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

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

Project to upgrade Janakpur-Bijalpura railway line in limbo

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