ANTUF-R demands Rs 15,000 as minimum pay

The All Nepal Trade Union Federation-Revolutionary (ANTUF-R) affiliated to the CPN-Maoist has threatened to shut down all industrial establishments across the country for indefinite period if minimum monthly remuneration and daily wage of workers are not raised to Rs 15,000 and Rs 700, respectively, within five days from Friday.
The warning comes four days after the government raised minimum monthly remuneration of workers to Rs 8,000 --including basic salary of Rs 5,100 and dearness allowance of Rs 2,900 -- from Rs 6,200. The daily wage of workers was also raised to Rs 318 from Rs 231.
“We had to issue this ultimatum as the new deal reached between the government, employers and trade unions is not in the interest of workers,” says an ANTUF-R statement issued on Friday.
The ANTUF-R claims a delegation led by the trade union had met with Chairman of the Interim Election Council Khil Raj Regmi in March and handed over a 25-point memorandum seeking radical changes to minimum remuneration and daily wage structures. After the trade union´s calls were not heard, it issued a seven-day ultimatum on May 15 and announced a series of protests.
“But instead of listening to our genuine concerns the government reached a deal with trade unions that had deviated from our movement,” says the ANTUF-R statement, adding, “The newly reached agreement on minimum remuneration and daily wage is not acceptable to us.”
The Federation of Nepalese Chambers of Commerce and Industry (FNCCI), the largest umbrella body of the private sector, has called the demands and ultimatum of the ANTUF-R as “unfortunate”.
“Such demands would only discourage private and foreign investment. This would ultimately affect job creation process and force more youths to leave the country,” Manish Agarwal, vice chairman of FNCCI´s Employers´ Council, told Republica.
He also said it would not be appropriate to initiate any discussion on wage revision at the moment as “we had just raised minimum remuneration and daily wage of workers in a significant manner”.
A high-ranking official of the Ministry of Labor and Employment said, “At a time inflationary pressure is creating hole in the pocket of ordinary citizens, the demands of the trade union sound genuine. But we also have to take the condition of industrial establishments into account as many are not operating in full capacity due to various problems ranging from power outage and labor-related problems to lagging economic growth rate.”
Asked why the ANTUF-R was not included in the wage negotiations between the government, employers and trade unions, the official, on condition of anonymity, said the government sends its invitation to the Joint Trade Union Coordination Committee, a group of leading trade unions operating in the country. “It is up to the committee to send representatives to participate in the wage-related negotiations,” the official further said.

IBN, SN Power hold PDA talks

The two-day negotiation talks on project development agreement (PDA) between the government and SN Power, a Norwegian power developer, for Tamakoshi III (650 MW) hydropower project concluded here on Monday.
Officials of the Investment Board Nepal (IBN) said the talks became successful in setting the ground for further discussion. Both the sides have agreed to hold next round of meeting soon, according to a source that attended the meeting.
Radesh Pant, CEO of IBN, had led the government side in the meeting while Dr Sandeep Shah, vice president and country director of SN Power, led the Norwegian firm in the meeting.
The IBN, which was formed around one and half years ago with the aim of facilitating the implementation of large scale projects on a fast track mode, held the discussion based on the PDA template developed with the help of London-based legal consulting firm Herbert Smith.
SN Power is the first power development to sit in PDA negotiation for the development of large scale hydropower projects (above 500 MW).
The PDA negotiation indicates that SN Power is serious about developing the project.
“The project will materialize if the government concludes PDA negotiation with the developer successfully," an official at the Office of the Prime Minister and Council of Minister (OPMCM) told Republica.
The IBN and SN Power signed the project negotiation agreement (PNA) a couple of weeks ago. As per existing rules, PDA talks should be finalized within one and half years of signing the PNA.
SN Power had received survey license of the mega hydropower project in 2007. It has already completed the environment impact assessment (EIA) of the project that is estimated to cost Rs 120 billion.
Meanwhile, the IBN is also trying to finalize PDA with two Indian power developers -- Sutlej Jal Vidyut Nigam and GMR. Sutlej is developing the Arun III (900 MW) project, while GMR is involved with Upper Marsyangdi and Upper Karnali projects.

Deloitte India presenting report on bond market next week

Deloitte India, a consulting firm, is presenting its preliminary study report on regulatory and institutional framework for bond market to the government next week.
The consulting firm was hired by the government to conduct study on three components -- regulatory and institutional framework on bond market, private sector on infrastructure development, and identifying projects that can be developed under public-private partnership (PPP) model.
“We have received some of the preliminary drafts of the reports prepared by Deloitte India,” Nava Raj Bhandari, joint secretary at the Ministry of Finance (MoF), told Republica. "We are trying to manage public debt efficiently so that the government can gain higher returns from it."
The government hired Deloitte India under ´Capital Market and Infrastructure Capacity Support Project´ with assistance form the Asian Development Bank (ADB).
According to information posted on the website of ADB, the government has received assistance of US$ 5 million for the project.
The project, which will continue till 2015, has been tasked with the responsibility of preparing a comprehensive report on how public debt of the country can be managed and utilized with comparatively higher rate of returns.
The government implemented the project, realizing its low investment in infrastructure development, underdeveloped bond market and loose implementation of PPP models.
"Long-term committed funding for infrastructure projects is best supported by a mature and vibrant bond market. But Nepal´s bond market remains constrained, accounting for just 12.6 percent of the gross domestic product at the end of 2009," reads the project concept paper available on the ADB website.
The concept paper further says, "There is no coherent public debt management strategy to guide decisions on the volume and maturity of each issuance, which are done on an ad hoc basis, preliminary to meet short-term needs."
An official at the finance ministry said, “We are hoping that the report that comes from the Deloitte will help the government to manage public debt more effectively in long-term goals."
Meanwhile, the government is also envisioning establishing a different institution for bond market management. However, the Nepal Rastra Bank (NRB), the central bank of the country, and the finance ministry are divided over establishing a separate agency for bond market management.
According to a source privy to the issue, the ministry wants to establish the agency under it, whereas the NRB says the agency should be an autonomous body.
At present, Public Debt Management Department at the NRB is looking after the country´s bond market.

NRB to let more imported goods against convertible currency from India

The Nepal Rastra Bank (NRB) has decided to increase the number of goods in the list that are imported from India by paying convertible currency.
The central bank, through the Monetary Policy 2013/14, aims to reduce the cost of goods that are imported from the Southern neighbor. "Additional goods will be included in the list of goods that are imported from India by paying convertible currency," reads the full text of Monetary Policy that the NRB unveiled last week.
As of now, there are 161 different goods that are imported from India against convertible currency.
"The Nepali traders shouldn´t pay additional taxes when they import goods from Indian market against convertible currency," Bhaskar Gayawali, spokesperson of the NRB, told Republica.
The NRB had added only one good in the list, namely, Mango Pulp, in last fiscal year 2012/13.
Businessmen have welcomed the NRB´s move. "We want the NRB to include goods pertaining to the automobile and service sectors," Pashupati Murarka, the vice-president of the Federation of Nepalese Chambers of Commerce and Industry (FNCCI), said.
According to Muraraka, Nepali businessmen have to pay 12.36 percent as a service charge to the Indian government while importing different consulting services. “We even pay a trading charge to the Indian government when we carry out transactions in dollar,” Murarka said.
Similarly, the central bank has also stated that it would simplify the procedure of exchanging amount of currency that is required for transport.
The NRB will include the goods in the list only on the basis of the recommendation made by the Department of Industry (DoI). "We will request the DoI to add goods from the automobile industry and service sectors," Murarka informed.
Additionally, the NRB has increased the amount of one-time payment money from USD 25,000 to 30,000 while importing goods from third countries.
However, trade experts aren´t that upbeat about the NRB´s move. "This move is not going make any significant difference to the bilateral trade between Nepal and India," trade expert Dr Ratnakar Adhikari at the South Asia Watch on Trade, Economics and Environment (SAWTEE), said. "Nonetheless, this is a good move."

Unclear benefit sharing mechanism hindering growth of energy sector: Report

Nepal´s energy sector is not becoming competitive mainly due to politicization, unclear mandates to the responsible institutions and unclear benefit sharing mechanism, a study report shows.
"The development of energy sector and its competitiveness have some binding constraints such as political and market uncertainties," a report on ´Practical Approach on Supporting Competitiveness in Carbon Constrained World´ reads.
The report, which is in the final state of production, is being prepared by South Asia Watch on Trade Economics and Environment (SAWTEE) and Overseas Development Institute (ODI) -- a UK based think tank.
The report, which has taken three sectors, namely, energy, forestry and tourism, has made some policy recommendation on how to achieve a higher level of economic growth and maintaining low carbon emission.
"All three sectors -- energy, forestry and tourism -- are important in case of Nepal and we have to be careful while exploiting the natural resources," Asish Subedi, research officer at SAWTEE, who is also involved in the preparation of the report, said.
Presenting the findings of the study on Friday, Subedi said public-private dialogues should be carried out in order to improve the livelihood of people.
The three sectors that have been accommodated in the report should be linked up with each other, Dr Posh Raj Pandey, executive chairman of SAWTEE, said.
"We have to think of achieving higher economic growth and maintaining competitiveness in the long run," Pandey said.

Record budget amid slim prospect of effective implementation of power programs

The great potential that Nepal holds in generation of electricity through hydropower has been a favorite topic no matter where you go in Nepal, from school classrooms to high-level party and business and trade conferences. But that is all it has been limited to -- babble.
The government this year went a step forward by allocating a record-high budget for the energy sector for Fiscal Year 2013/14. People from the general public to the hydropower developers are upbeat with the budget which has also offered some incentives for investors in this crucial sector.
However, going by our recent history, the government´s target of developing hydropower can not be achieved even with allocation of a sufficient budget.
This year, the budget for energy promotion has risen to an all time high of Rs 30 billion, which is one of the largest allocations for a single sector.
But, merely arranging a budget can´t bring about the desired result if it is not backed up by effective implementation.
The 12th development plan, which ended in mid-July, had envisaged adding 184 MW power to the national grid. But that ended up with bleak progress with addition of only 21 MW during the three-year period. The progress in extension of transmission lines is even worrisome.
The National Planning Commission (NPC), the apex body of the government to formulate policy guidance, revealed that the government could construct hardly 500 meters of transmission line against a target of completing 500 km of lines during the plan period.
"A reform of Nepal Electricity Authority (NEA) is a must to utilize the allocated amount of budget for the development of the hydropower sector in the country," an official at the Ministry of Energy (MoE) said after the government announced it was injecting comparatively higher amounts of investment into the sector.
The government in its approach paper for 13th three-year development plan has set a target of developing an additional 668 MW in the next three years.
"The government´s move to develop the hydropower sector is appreciable but the implementation institutions are weak," Subarna Shrestha, a power developer, said.
Finance Minister Shankar Prasad Koirala, who is also a former energy sectary, while unveiling the budget for the current fiscal year said that the government´s first priority would be to develop hydropower projects in the coming years keeping in view the deepening power shortage.
However, the budget failed to speak about the measures to effectively implement the programs planned in the budget.
"Our emphasis on power development is based on the grounds that the manufacturing sector should not have to be affected by crunch of the power," he added.
Realizing the need of government involvement in power generation, the government has provided authority to the Department of Electricity Development (DoED) -- an implementing body for power development -- to develop hydropower projects.
The DoED, which was simply engaged in issuing licenses for the development of hydropower projects, has got a mandate to develop the 25MW Budhi Ganga hydropower project through the fiscal policy for 2013/14.
"We want to utilize our available human resources for the programs to generate power in addition to our other regular functions,” Gokarna Raj Pantha, a senior divisional engineer at the DoED, said.
The government´s move to expedite the development of the hydropower sector should not be squeezed due to bureaucratic red-tape and the ill-performing NEA.
"We have to focus on reforming NEA and push it to sign power purchase agreements (PPAs) with private-sector power developers," said a power developer.
In many cases, NEA itself has been creating hurdles in the development of the hydropower sector.
It has been reluctant to sign PPAs for six hydropower projects – collectively called the super-six -- being developed by the private sector.
The super-six projects, which include 16 MW Singti, 24.1 MW Khare, 23.5 MW Upper Solu, 82 MW Lower Solu, 14.9 MW Maya Khola and 50 MW Mewa Khole, are well prepared for initiating construction. But NEA’s reluctance in signing the PPA deals with developers of these projects has dashed the prospects of their implementation.
NEA should be responsible for the loss of the private sector´s confidence due to its indifference in signing the PPAs.
The government has not mentioned anything about effective implementation of its projects and plans so far. The government should work on creating an environment so that the modus operandi of the implementing agencies is improved to pave the way for achieving the targeted plans for the current fiscal year and the three-year plan.

IBN, Three Gorges to hold talks on transmission lines

After more than a year of silence, China Three Gorges Corporation (CTGC) has showed interest to take forward the talks on 750-megawatt West Seti Hydropower Project.
"Officials of the CTGC have told us they would like to talk about taking forward the project, mainly about developing transmission lines to evacuate power generated by the project," a source privy to the development told Republica.
According to the source, a team of officials from CTGC are planning to come to Nepal for the talks. “The date of their visit has not been confirmed yet,” the source said.
The Investment Board of Nepal (IBN) will be holding talks with the officials of CTGC.
"The officials from IBN and CTGC will hold talks on how to develop transmission infrastructure to evacuate power generated by the project," the source added.
The CTGC officials are visiting Nepal after IBN told them its officials would not be able to visit China for the talks.
The Chinese power developer had invited officials of IBN for talks in China.
Earlier, CTGC officials had said they the project was financially viable. The officials had made the remark after conducting field study.
The government had handed 14 large scale projects, including West Seti, to IBN in May 2012.
"The talks will be mainly focused on transmission line this time as development of project largely depends on power evacuation arrangements from the project site," the source said.
The project´s fate had become uncertain after CTGC stopped communicating with the government following dissolution of Constituent Assembly in May, 2012.
West Seti, one of the mega hydropower projects in the far-western region, is among the priority projects of the government. Through this project, the government aims to supply up to 150 MW of electricity in the western industrial corridor.