A delegation of Korean private sector has expressed interest to invest in Nepal´s hydropower and infrastructure projects.
The four-member delegation, which is in Kathmandu to study the prospects of investment in Nepal, met with the officials of Federation of Nepalese Chamber of Commerce and Industries (FNCCI).
“Yon Yong Suk, chief executive of Office of ILIJIN International Company Ltd, Korea and Bhaskar Raj Rajkarnikar, vice president of FNCCI lead the discussions between two parties,” reads a statement of FNCCI.
According to the release, Suk said the Korean investors are interested to invest in Nepal´s hydro sector. "I am hopeful that this discussion will pave the way forward for to us to invest in Nepal,” the release quoted Suk as saying in the meeting.
Sharing the vision of Investment Year 2012/13 among the Korean delegates, Rajkarnikar requested Korean investors to come to Nepal.
“The government is also formulating policies that are friendly for both domestic and international investors. This is why I request you to come here with investment,” Rajkarnikar told the Korean delegates.
Tuesday, March 27, 2012
Korean delegation studying investment prospects in Nepal
Govt belatedly assigns West Seti to Investment Board
Following controversy surrounding the signing of a memorandum of understanding (MoU) with the Chinese power developer Three Gorges on the 750 MW West Seti Hydropower Project, the government on Monday asked the Investment Board to take up the project enabling the latter to take further decisions on its development.
Although officials did not explicitly explain how it could impact the deal that Minister of Energy Post Bahadur Bogati inked with Three Gorges, sources said the Prime Minister´s Office has entrusted the board to take all required decisions on the project. This means it can review and even revoke it if it deems appropriate.
Legally, the whole deal of West Seti should have been handled by the board since the very beginning, as its Act clearly entrusts the board to handle the large projects, including hydropower projects of over 500 MW. “Ignoring the board while signing the MoU was a mistake in itself,” a senior official at Prime Minister´s Office told Republica.
Now that the board has been assigned to take up and steer the project´s development, he said the board will have all the authority to decide on the project.
Following the government´s signal, the board on Monday began assessing every communication made in the past between the governments of Nepal and China, and also China Three Gorges Corporation. “We are also studying the MoU in order to figure out how to move forward,” said a source at the Board.
However, as the board was unaware of interest of the Chinese government, particularly how it would react if Nepal government wanted to make some changes or scrap the MoU. “We don´t want to hurt China´s sentiment for we are still eyeing the soft loans from the Chinese Exim Bank for developing the project. MoU has complicated matters for us,” said the source.
During the bilateral communications, Investment Board is also planning to request China to resume negotiations on a soft loan of US$ 1.6 billion -- the identified project cost of West Seti for which Ministry of Finance was negotiating till recently.
“We are still discussing what will be the best model for West Seti development. Nonetheless, we are making request for resumption of talks for soft loans because we want to keep all the options open,” said the source.
"Our whole efforts at present aim at two things; one is to make the project happen, and the other is to maximize the benefits for country," he told Republica, adding how the board will steer the project will become clear only after it talks with Chinese officials, mainly those based in Kathmandu.
Meanwhile, the board on Monday wrote to the sub-committee formed by the parliament´s Committee on Natural Resources and Means to probe West Seti MoU that the board was ready to take up the project with high priority if it is brought under the board´s jurisdiction after requisite amendment and revision.
Sunday, March 25, 2012
Indian Investment in Nepal
No matter what goes wrong, Indian investors will come to Nepal. One reason for business men is definitely to make profit. But that is not the only one. Indian business men who have complete support of government wants to explore the volume of business in Nepal in order to know the dynamism of Nepal's private sector. Interestingly, an economic national daily from India has a report about Indian incs in Nepal. However, the report is well compilation of information and sentiment of Indian investors but substantial information about their areas of interest to make investment and volume of money that will flow into Nepal in the upcoming days.
Raw materials, fuel crises hit cement factories
Supreme Cement that has been producing 400 tons of cement and 200 tons
of clinker every day is on the verge closure. It is not because of power
shortage or labor problems, but because the company will soon run out
of raw material and fuel as Indian exporters have declined to supply
them in Indian currency after the scrapping of duty refund procedure
(DRP) on March 1.
The company had been using firebricks imported from Dalmia Refractories and petroleum coal from Reliance in India. But both the Indian companies are now demanding Supreme Cement to pay for its purchases in US dollar if it wants to maintain supply.
"It is already 24 days since we have operated with reserve stocks and that will run out soon. Once that happens we will be forced to shut down the factory,” said Pashupati Murarka, promoter of the company and vice president of Federation of Nepalese Chamber of Commerce and Industries (FNCCI).
Supreme is not the only company that is facing this problem. All cement factories are fast running out of raw materials, particularly firebricks and petroleum coal. "Unfortunate for us, we can not pay the supplier in US dollars as Nepal Rastra Bank (NRB) has opened payment in dollar for only 250 items and items we import are not included in that list,” said Murarka.
Given the situation, all cement factories could shut down in the near future, he said.
Then there are new problems. Nepali firms that recieved supplies against IC payment too have been compelled to pay more as Indian exporters have forced them to pledge 10 percent collateral on the total value of the consignments.
Their condition is that they will refund the collateral once the importing party furnish them customs document proving the supplies crossed the border. They are refunding the money too. “But the problem is our customs officials do not accept the collateral is refundable amount and are charging excise duty on that amount too,” said Murarka.
Aerated drinks manufacturers like Barun Beverages, beer manufacturers and many other companies are currently facing this problem.
“The nature and extent of problem is different. But lack of India and Indian exporters´ support in the wake of termination of DRP has affected all the Nepali firms importing excisable items,” said another official of FNCCI.
Govt deaf to private sector´s plea
Despite such problems that fundamentally goes against bilateral deals agreed by the two governments and the central banks, the private sector is unable to find people in Ministry of Commerce and Supplies to support their cause.
"We are constantly asking government officials what could be the reason behind this problem? Sadly, they have nothing to say to us,” said Murarka.
That is not all. Following government´s silence, the business community even approached the Embassy of India in Nepal, seeking explanations behind rejection of Indian exporters to supply goods against IC. But even that has not been of any help.
“Officials in both MoCS and Embassy say the governments have changed nothing in the procedures and practice, hence, there should be no problem. But our reality is something else,” said Murarka.
On being queried why the government has not taken over the industries´ complaint, officials like Commerce Secretary Lal Mani Joshi said they were not aware of reasons behind the problem. Just like a week ago, he reiterated that he had approached the Indian counterpart seeking explanations but have not heard anything so far. Surprisingly, Joshi even said there were no problems any more.
The problem on import of excisable items surfaced after Indian exporters demanded Nepali traders to make payment in USD following the scrapping of DRP arrangement on March 1. That brought import of such items to a grinding halt for about two week.
Though some exporters have started supplying goods against IC, entrepreneurs said their demand for collateral had created new problem.
"Exporters from Indian states including Gujrat and Maharastra are still asking us to make payment in dollar,” said Murarka. Those supplying against IC too have inflated the cost for them.
The company had been using firebricks imported from Dalmia Refractories and petroleum coal from Reliance in India. But both the Indian companies are now demanding Supreme Cement to pay for its purchases in US dollar if it wants to maintain supply.
"It is already 24 days since we have operated with reserve stocks and that will run out soon. Once that happens we will be forced to shut down the factory,” said Pashupati Murarka, promoter of the company and vice president of Federation of Nepalese Chamber of Commerce and Industries (FNCCI).
Supreme is not the only company that is facing this problem. All cement factories are fast running out of raw materials, particularly firebricks and petroleum coal. "Unfortunate for us, we can not pay the supplier in US dollars as Nepal Rastra Bank (NRB) has opened payment in dollar for only 250 items and items we import are not included in that list,” said Murarka.
Given the situation, all cement factories could shut down in the near future, he said.
Then there are new problems. Nepali firms that recieved supplies against IC payment too have been compelled to pay more as Indian exporters have forced them to pledge 10 percent collateral on the total value of the consignments.
Their condition is that they will refund the collateral once the importing party furnish them customs document proving the supplies crossed the border. They are refunding the money too. “But the problem is our customs officials do not accept the collateral is refundable amount and are charging excise duty on that amount too,” said Murarka.
Aerated drinks manufacturers like Barun Beverages, beer manufacturers and many other companies are currently facing this problem.
“The nature and extent of problem is different. But lack of India and Indian exporters´ support in the wake of termination of DRP has affected all the Nepali firms importing excisable items,” said another official of FNCCI.
Govt deaf to private sector´s plea
Despite such problems that fundamentally goes against bilateral deals agreed by the two governments and the central banks, the private sector is unable to find people in Ministry of Commerce and Supplies to support their cause.
"We are constantly asking government officials what could be the reason behind this problem? Sadly, they have nothing to say to us,” said Murarka.
That is not all. Following government´s silence, the business community even approached the Embassy of India in Nepal, seeking explanations behind rejection of Indian exporters to supply goods against IC. But even that has not been of any help.
“Officials in both MoCS and Embassy say the governments have changed nothing in the procedures and practice, hence, there should be no problem. But our reality is something else,” said Murarka.
On being queried why the government has not taken over the industries´ complaint, officials like Commerce Secretary Lal Mani Joshi said they were not aware of reasons behind the problem. Just like a week ago, he reiterated that he had approached the Indian counterpart seeking explanations but have not heard anything so far. Surprisingly, Joshi even said there were no problems any more.
The problem on import of excisable items surfaced after Indian exporters demanded Nepali traders to make payment in USD following the scrapping of DRP arrangement on March 1. That brought import of such items to a grinding halt for about two week.
Though some exporters have started supplying goods against IC, entrepreneurs said their demand for collateral had created new problem.
"Exporters from Indian states including Gujrat and Maharastra are still asking us to make payment in dollar,” said Murarka. Those supplying against IC too have inflated the cost for them.
Saturday, March 24, 2012
'Nepal has underutilized trade opportunities with India'
Despite enjoying zero tariff
entry facility on most of the goods to India, which has a huge market
potential, Nepal has largely underutilized the opportunities it holds in
penetrating market and expanding exports to the next-door neighbor in
the south, shows a latest report.
For instance, the total import demand for iron and steel in India in 2010 was close to $8 billion.
But Nepal´s share of that was only 1.22 percent. Similarly, Nepal´s share of exports in India´s total imports of other exportable items on which Nepal has comparative advantage, including edible vegetables, copper articles, edible fruits and nuts among others, is below 2 percent.
According to the report unveiled in Kathmandu on Friday, the reason behind low exploitation of available market potential in India is due to supply side constraints such as infrastructure, human capital, access to finance and technology, and labor issues. Touching upon the debate over the pegged exchange rate with India, the report notes that there is no decisive evidence to change the peg despite real exchange rate appearing to be revalued.
"Devaluation is helpful if constraints like weak economic fundamentals, institutional and political fluidity and weak industrial and tradable sector is taken care of," reads the report.
The report that is totally focused on Nepal-India trade has outlined that Nepal has a highest degree of trade intensity with India after Bhutan. "Nepal´s export basket is heavy with low-value products like ferrous metals, chemicals, crops and food products," states the report. The report prepared by South Asia Watch on Trade, Environment and Economics (SAWTEE) with the help of United States Agency for International Development (USAID) argues that Nepal has not been diversifying its production to increase the volume of export.
According to the report, the non-tariff barriers that are hindering Nepal´s export to India are quarantine related issues, rules of origin, transport hassles, technical barriers to trade, quantitative restriction, domestic production and transit state permit. "Quarantine related issues have 39 percent of share in obstructing export to India," reads the report.
Moreover, the report argues that Nepal should ratify the Special Economic Zone bill as soon as possible. "There are issues that should be addressed in domestic level and by India as well," the report states, adding: "The Inter-governmental Committee meeting between Nepal and India should address the issues like transporters´ accessibility and transit issues."
The report also argues that the article III of Treaty on Control of Unauthorized Trade between Nepal and India should be reviewed and it should be open for the items that are imported for use in agriculture, manufacturing and service sector.
For instance, the total import demand for iron and steel in India in 2010 was close to $8 billion.
But Nepal´s share of that was only 1.22 percent. Similarly, Nepal´s share of exports in India´s total imports of other exportable items on which Nepal has comparative advantage, including edible vegetables, copper articles, edible fruits and nuts among others, is below 2 percent.
According to the report unveiled in Kathmandu on Friday, the reason behind low exploitation of available market potential in India is due to supply side constraints such as infrastructure, human capital, access to finance and technology, and labor issues. Touching upon the debate over the pegged exchange rate with India, the report notes that there is no decisive evidence to change the peg despite real exchange rate appearing to be revalued.
"Devaluation is helpful if constraints like weak economic fundamentals, institutional and political fluidity and weak industrial and tradable sector is taken care of," reads the report.
The report that is totally focused on Nepal-India trade has outlined that Nepal has a highest degree of trade intensity with India after Bhutan. "Nepal´s export basket is heavy with low-value products like ferrous metals, chemicals, crops and food products," states the report. The report prepared by South Asia Watch on Trade, Environment and Economics (SAWTEE) with the help of United States Agency for International Development (USAID) argues that Nepal has not been diversifying its production to increase the volume of export.
According to the report, the non-tariff barriers that are hindering Nepal´s export to India are quarantine related issues, rules of origin, transport hassles, technical barriers to trade, quantitative restriction, domestic production and transit state permit. "Quarantine related issues have 39 percent of share in obstructing export to India," reads the report.
Moreover, the report argues that Nepal should ratify the Special Economic Zone bill as soon as possible. "There are issues that should be addressed in domestic level and by India as well," the report states, adding: "The Inter-governmental Committee meeting between Nepal and India should address the issues like transporters´ accessibility and transit issues."
The report also argues that the article III of Treaty on Control of Unauthorized Trade between Nepal and India should be reviewed and it should be open for the items that are imported for use in agriculture, manufacturing and service sector.
66-km network, 5 lines, 31 stations
KATHMANDU VALLEY METRO INCEPTION REPORT
The preliminary inception report on the much-awaited Metro Railway in
Kathmandu that was submitted to the Department of Railways (DoR) by
consulting companies this week has outlined five lines for the network
-- four inside the Ring Road and one that will travel along the Ring
Road.
The proposed 66.1-km network comprises 31 stations in total -- including transfer and ordinary stations. The main terminal of the metro will be located at Ratnapark, says the report, which is yet to be approved by DoR.
According to the report, the 27.35-km Line 1--which follows the Ring Road--will connect different locations between Kalanki, Satdobato, Chabhil and back to Kalanki.
The Line comprises 18 stations including transfer points at Kalanki, Balkhu, Satdobato, Koteshore, Tinkune, Sinamangal, Chabhil, Narayan Gopal Chowk and Gongabu, from where passengers can change trains. Line 1 will have pick-up and drop stations at Ekantakuna, Dhobighat, Sitapaila Chowk, Swoyabhu, Balaju, Machhapokhari, Tilangatar, Dhumbarahi and Gwarko.
Those who want to go from Kalanki to Sinamangal can take trains on Line 2. This Line will have six stations in places ranging from Kalanki and Sanogaucharan to Sinamangal. The Line will pass through the main terminal.
The preliminary report shows that Line 3 will link Koteshwore and Gongabu. It will have eight stations in places like New Baneshwore, Singha Durbar and Thamel and will pass through the main terminal.
Similarly, Line 4, which is 11.5-km long, will connect Satdobato and Narayan Gopal Chwok, while Line 5 -- the shortest at 8.4 kilometers -- will link Balkhu and Chabhil.
According to Rajeshwar Man Singh, superintendent engineer at DoR, the Metro Railway will travel above ground in some places, underground in some areas and on the surface in selected places.
“But how it travels in each specific area will be decided after the complete feasibility report is prepared,” Singh said.
DoR has given the consulting companies until November to prepare the complete feasibility report.
The feasibility report of the project -- which will be based on the preliminary inception report -- will be prepared by Korea Transport Institution, Chungsuk Engineering Company, Kunwa Cunsulting and Engineering Company, Korea Rail Network Authority and two local companies-- BDAnepal Private Limited and ERMC Private Limited. These companies were also involved in preparation of the preliminary inception report.
“We have paid around Rs 60.5 million (to the companies) to prepare the preliminary report and conduct the feasibility study,” Singh said.
The proposed 66.1-km network comprises 31 stations in total -- including transfer and ordinary stations. The main terminal of the metro will be located at Ratnapark, says the report, which is yet to be approved by DoR.
According to the report, the 27.35-km Line 1--which follows the Ring Road--will connect different locations between Kalanki, Satdobato, Chabhil and back to Kalanki.
The Line comprises 18 stations including transfer points at Kalanki, Balkhu, Satdobato, Koteshore, Tinkune, Sinamangal, Chabhil, Narayan Gopal Chowk and Gongabu, from where passengers can change trains. Line 1 will have pick-up and drop stations at Ekantakuna, Dhobighat, Sitapaila Chowk, Swoyabhu, Balaju, Machhapokhari, Tilangatar, Dhumbarahi and Gwarko.
Those who want to go from Kalanki to Sinamangal can take trains on Line 2. This Line will have six stations in places ranging from Kalanki and Sanogaucharan to Sinamangal. The Line will pass through the main terminal.
The preliminary report shows that Line 3 will link Koteshwore and Gongabu. It will have eight stations in places like New Baneshwore, Singha Durbar and Thamel and will pass through the main terminal.
Similarly, Line 4, which is 11.5-km long, will connect Satdobato and Narayan Gopal Chwok, while Line 5 -- the shortest at 8.4 kilometers -- will link Balkhu and Chabhil.
According to Rajeshwar Man Singh, superintendent engineer at DoR, the Metro Railway will travel above ground in some places, underground in some areas and on the surface in selected places.
“But how it travels in each specific area will be decided after the complete feasibility report is prepared,” Singh said.
DoR has given the consulting companies until November to prepare the complete feasibility report.
The feasibility report of the project -- which will be based on the preliminary inception report -- will be prepared by Korea Transport Institution, Chungsuk Engineering Company, Kunwa Cunsulting and Engineering Company, Korea Rail Network Authority and two local companies-- BDAnepal Private Limited and ERMC Private Limited. These companies were also involved in preparation of the preliminary inception report.
“We have paid around Rs 60.5 million (to the companies) to prepare the preliminary report and conduct the feasibility study,” Singh said.
Wednesday, March 21, 2012
IMF appreciates India's fiscal budget for 2012/13
International Monetary Fund (IMF), a global institution which develops the routes to connect and maintain the global economy has appreciated the steps that India took while framing the fiscal policy for 2012/13. Christine Lagarde, Managing Director of the IMF, who is in New Delhi and having discussion with high profile politicians, ministers along with senior government officials, appreciated the budgetary allocation of India.
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