●Govt promises ´half-hearted´ reforms●

　Posted on 2009-07-15
　KATHMANDU: Finance Minister Surendra Pandey´s budget for 2009/10 featured numerous programs to enhance public service delivery. Still, it was weak in terms of giving impetus to reforms long pushed on the sideline.
　So much so, reforms commitment expressed in policies and programs such as petroleum sector liberalization did not feature in the budget.
　“Reforms initiated in two large public banks - Rastriya Banijya Bank and Nepal Bank Limited - will be continued,” said Pandey, presenting the budget in the parliament on Monday. He also announced measures to encourage loan defaulters to repay their loans and promised to implement an action plan to inject required capital in the banks within the next two years.
　However, Pandey failed to present strong commitments to labor reforms. He remained silent on labor commission and other steps mooted by the past governments to achieve labor reforms.
　Rather the budget gave emphasis on job security. The budget, however, promised to put in place legal arrangement to compensate industries from losses incurred due to highway closures. “The organizers of such bandas will be made to compensate the industries.”
　In a bid to enhance service delivery, the budget announced the program of registering all land records in computers at 68 Land Revenue Offices within the new fiscal year, and awarding land-ownership certificate through computer.
　Under the public transport and management reform, the budget announced that an electronic record management of drivers´ license will be completed the next fiscal year and new vehicle registration, route permit and driver´s license will be distributed and renewed electronically starting from November 16, 2009.
　Pandey also promised to put in place special facilitation measures at the international airport for the departure and arrival of the overseas workers.
　In order to motivate the traffic police to fully enforce traffic rules, he proposed to raise the existing penalty for the defaulters by 25 percent and make a provision to distribute the additional amount raised to the traffic police concerned as an incentive.
　He unveiled "People´s Residences Program", offering low cost modern houses in Siraha, Saptari and Kapilvastu districts to provide housing facilities to 1,000 households in each district to disadvantaged and underprivileged communities such as Dom, Musahar, Chamar, Dusadh, Khatwe, other Dalits and Muslims.
　Pandey admitted public enterprises have been adding liability to the state, however, he refrained from citing privatization, which was once among the top priority of the government.
　Under the Public Enterprises (PEs) Reform program, he rather pushed for increasing the people´s ownership in the PEs and hydropower projects to be built by state-owned enterprises.
　As an initiation of reform in the judiciary sector, he allocated Rs 1.41 billion for strengthening the capacity of the judiciary, which is still traditional.
　In a step to cushion low-income group, the budget allocated Rs 7.78 billion for social security purposes. It also introduced a grant of Rs 100,000 to encourage inter caste marriage and Rs 50,000 to promote widow marriage.
　The government also vowed reforms to make public administration accountable, capable, impartial, transparent and compatible with state restructuring.
　“Strategic plan against corruption will be implemented strictly and policy of zero tolerance will be adopted besides strengthening Commission for the Investigation of Abuse of Authority (CIAA) and National Vigilance Center and other agencies concerned with justice management,” said Pandey.

●Hydropower gets huge budget boost●

　Posted on 2009-07-15
　KATHMANDU: The government has decided to formulate programmes to develop 25,000 MW in the next two decades. The previous government led by UCPN (Maoist) had projected development of 10,000 MW in the next ten years.
　The allocated budget for hydropower is Rs. 14 billion 690 million for this fiscal year. This marks a 131 percent rise compared to the revised estimates of the previous fiscal year.
　Construction work at the 130 MW Upper Seti, a reservoir type hydro project will be initiated as a project of national priority and pride. Likewise, work on the 456 MW Upper Tamakoshi Hydropower Project -- the first big project being implemented with domestic investment -- will be initiated. It is expected to be complete in fiscal year 20122013.
　Meanwhile the government has also stated it will expedite construction of various middle scale hydropower projects including the 60 MW Upper Trishuli, 30 MW Chameliya and the 27 MW Rahughat among others.
　Preliminary work on Pancheswor Multip-urpose Project will be initiated by developing infrastructure like access road to the project site and ropeway construction.
　Construction of Naumure Hydroproject will be initiated along with other multi-purpose projects like Sunkoshi-Kamala diversion and Bheri-Bababi diversion. The private sector will be encouraged to construct large scale projects such as Arun III, Upper Karnali, and West Seti.
　The government will give emphasis to feasibility studies of new projects along with extension and repair of transmission lines.
　Immediate import of 30 MW from the second circuit of Kataia-Kusaha and 30 MW from the point of Surajpura　will be initiated. Extension lines will be constructed in Birgunj, Biratnagar, and Kusaha for additional import of power.
　According to hydro expert Gyanendra Lal Pradhan, in overall terms the budget looks good, but it does not reflect a clear cut policy for implementation of VAT subsidy on construction materials like cement and iron rods.
　"The government´s plan to develop 25,000 MW in the next 20 years is unrealistic and has been mentioned in the budget just to make it populist. The government should have continued with the Maoist proposal of 10,000 MW and worked on implementing that successfully," he said.
　Likewise, the government should have proactively involved the private sector along with the international sector for construction of hydropower projects.
　Pradhan also underscored the need to revise the Power Purchase Agreement to lure the private sector towards hydropower development through a new policy.

●Govt waives FM, TV license renewal fee●

　Posted on 2009-07-15
　KATHMANDU: The government has decided to continue with the decision of the previous government to waive license renewal fees for television channels and FM radio stations operating across the country, according to Minister for Information and Communications Shankar Pokhrel. A Cabinet meeting -- which also passed the new annual budget tabled by the finance minister before the special Parliamentary session later on Monday -- decided in favour of the budding Nepalese electronic media considering the "critical times" they are going through.
　This is the second consecutive year the electronic media have been granted renewal fee waiver.
　The government has, however, denied a complete lift on the royalty charged to the broadcasters. FM and television broadcasters were also demanding a total lift on the two percent royalty charge from their total income. The previous Maoist-led government had reduced the royalty percentage from four to two.
　Despite some disappointment over the government decision to keep intact the royalty fee, broadcasters have lauded the renewal fee waiver. "We have taken the government move as a positive step.

●NRB warns wayward banks of action●

　Posted on 2009-07-15
　Pokhara: Governor of Nepal Rastra Bank (NRB) Dipendra Bahadur Chhetri said the central bank will punish financial institutions flouting its directions.
　The NRB has initiated action and inspection against financial institutions disobeying financial discipline, he said talking to journalists in Pokhara this morning.
　"We took action against the Nepal Development Bank for refusing to comply with the central bank´s directives, though we aware the bank time to time," he said. "Similar action will be taken against those banks violating the NRB´s instructions."
　While mentioning that the central bank has been allowing banks to resume operation considering the present financial possibility, he said that some financial institutions have been seeking merger and the NRB has been screening them.
　"Financial status of most of the banks is satisfactory. But case of some banks is exceptional. So, they are under the supervision of the central bank," he said. Dispelling rumours that some banks will go bankrupt in the near future, the governor urged consumers to stay in no doubt about this.
　He, however, expressed sadness over the recent trend of investing in unproductive sectors.

●Budget for sports up●

　Posted on 2009-07-15
　KATHMANDU: The Ministry of Finance has allocated a budget of Rs 273.2 million for the sports sector for the coming fiscal. Finance Minister Surendra Pandey made this announcement during the budget speech in the parliament on Monday. This is an increment by 32.94 per cent from the current fiscal´s budget.
　Of the budget allocated for sports, Rs 223 million will be spent on regular expenditures and Rs 50 million for development. Last year Rs 205 million had been allotted for the sports sector.
　Pandey also declared that national-level stadiums will be built in Sunsari, Chitwan and Kailali and a sports academy in the Hetauda. He also expressed commitment to provide lifelong remuneration to gold medal winner of the SAG and Olympics. However, no Nepali player has won a gold medal in Olympics so far.

●Hoarding fuels shortage of cigarette, beer●

　Posted on 2009-07-09
　KATHMANDU: The local market has started experiencing shortages of some of brands of cigarettes and alcoholic beverages, as the government is preparing to announce the budget for the upcoming fiscal year.
　A snap survey conducted by myrepublica.com found that Surya ´hard´ brand of cigarettes and Tuborg beer are not being released to the retail market in sufficient amounts, giving leeway for some retailers to arbitrarily raise the prices.
　"For the past one week, my wholesaler hasn´t released more than four packets of Surya ´hard´ cigarettes per day, whereas demand at my shop for this brand hovers around one to one and half cartons," said Indira Faiju, owner of Sampanna Store at Maharajgunj.
　Ishwor Upadhyaya, owner of a retail store at Nayabazar, echoed Faiju´s views. He had gone to buy two cartons of Surya ´hard´ cigarettes the other day, but had to return with only two packets.
　The same is the case with Tuborg beer, one of the most popular beers in the country.
　Ambika Shrestha, owner of Shrestha Kirana Store at Sankhamul, used to stock two boxes of this beer brand per day. But she has not been able to lay her hands on more than two boxes over the last one week. "Per day demand for Tuborg at my store stands at one and half to two boxes," she said.
　These are common problems faced by most of mom-and-pop stores in town this time of year. And this is giving some retailers an opportunity to profiteer.
　The other day, a store at Jyatha asked this scribe Rs 80 for a packet of Surya ´hard´ cigarettes. The maximum retail price of the brand is Rs 70. As for Tuborg beer, retailer Upadhyaya told myrepublica.com that a box of Tuborg, which costs Rs 1,490, is being sold at up to Rs 1,600 in the Balaju area.
　Although no one can give a clear-cut reason for this supply crunch, manufacturers´ statements that they have not reduced production give a clear indication that rampant hoarding is creating the artificial shortages.
　A senior official at Surya Tobacco, requesting anonymity, told myrepublica.com that Surya Tobacco has not lowered production of Surya ´hard´ brand of cigarettes. Ashish Bista, marketing manager of Gorkha Brewery, also said something similar. "May be stockists are hiding the products as the government is preparing to announce the budget," he said.
　Prior to the budget announcement, most stockists hoard such consumer items as they deem that the government will hike taxes on tobacco and alcoholic beverages through the budget speech. An increment in taxes allows stockists to sell the products at higher prices later on.

●Govt mulls branding hand-knotted carpets●

　Posted on 2009-07-09
　KATHMANDU: After successful international trade mark registration for pashmina, the governing is mulling over branding the Nepali hand-knotted woolen carpet to assure buyers of quality and strengthen the product image in the international market.
　The step is being pushed as international buyers have recommended quality accreditation and labeling for this premium Nepali export. It also comes as one major step towards establishing image differentiation between hand-knotted and cheaper machine-made carpets.
　The Ministry of Commerce and Supplies (MoCS) has pushed the program as a key step for building the product image during the new fiscal year and has sought allocation of Rs 20 million for the purpose.
　Part of the proposed budget will go for supporting trade mark registration for pashmina, under a program which has moved ahead successfully, and the rest will go for a carpet development program, said a government source.
　Unlike in the past when participation in international trade fairs used to top the export promotion program, the government has decided to de-prioritize this, in view of the global economic slowdown.
　“The demand for carpets has shrunk substantially in the wake of the global economic downturn and we understand our participation in trade fairs alone will not change the situation,” he stated. Instead, the ministry prefers to concentrate in 2009/10 on product development, labeling and accreditation, and to consolidate the product image.
　The ministry argues that registration of international trade mark and labeling for hand-knotted carpets will set up a system whereby hand-knotted and machine-made carpets can be differently labeled and tagged. This will make it easy for the government to open up exports of machine-made carpets as well, if manufacturers and exporters converged over the issue in future.
　Presently, Nepal restricts exports of machine-made carpet, even though exporters have been demanding the government open it, given rising demand and price advantages.
　The restriction has continued because manufacturers have resisted change, saying it will open the space for wrongdoers to manipulate quality and market products under different categories, thereby tainting the image of the product.

●NRB fails to meet IC demands●

　Posted on 2009-07-09
　JANAKPUR: The Indian Currency (IC) here costs more than the exchange rate due to short supply of IC.
　People of bordering villages and Janakpur are in want of more IC notes as they need to go to the nearby Indian cities to purchase daily consumer goods. People have had to pay more for IC as Nepal Rastra Bank has failed to provide enough Indian notes.
　The NRB has fixed commission at 40 paisa for exchange of Rs. 100. But, exchange centers have been charging one to three rupees for the exchange.
　Chandrika Prasad Singh of Janakpur Money Changer, said the NRB provides just IRs 25,000 a day to each exchange center but each center receives demands of as high as IRs 200,000 per day.

●Nepal-India power exchange meet in August●

　Posted on 2009-07-09
　KATHMANDU: India and Nepal have agreed to hold the much-delayed Power Exchange Committee meeting in the first week of August. The meeting will decide how the two sides will utilize the 30 MW additional power supply from India.
　The Indian government agreed to provide the additional 30 MW of power to Nepal Friday, as requested by the government of Nepal in April when the country was facing acute power shortage. Both the Ministry of Energy (MoE) and Nepal Electricity Authority (NEA) had then said that the Indian government´s nod is now too late as Nepal no longer faces heavy load-shedding.
　The request was made for April and May, the driest months in Nepal. However, the NEA will now discuss the mechanism to utilize the power as and when Nepal requires it. Even after the claims by the ministry and NEA, the Indian embassy had claimed that the agreement can be renegotiated for a later period.
　The date for the meeting this time has been proposed by the Indian government which is yet to finalize who will head the delegation from India. From Nepal´s side, Managing Director of Nepal Electricity Authority (NEA) Uttar Kumar Shrestha will head the negotiation team, the MoE said Tuesday.
　“India has proposed the meeting for the first week of August which is likely to take place in Kathmandu. The Indian side is yet to finalize its team,” Anup Upadhyay, the spokesperson of the Ministry said.
　During the meeting the two sides will discuss the tariff rate for power exchange between Nepal and India, determine the price structure for import of additional electricity from India, determine quantity of export and import from various points and discuss maintenance and other technical issues.

●Bids to be opened for 7 park resort leases ●

　Posted on 2009-07-08
　KATHMANDU: The Ministry of Forest and Soil Conservation is preparing to award lease contracts for seven resort sites inside Chitwan National Park (CNP) through open competition.
　The ministry´s move comes as the 15-year leases of the existing big seven resorts operating inside the park approach their end on July 15.
　“Under open competitions for lease contracts, existing resorts can also bid for new leases, besides new aspirants,” said an official of the ministry who requested not to be named.
　The official said the new contract period will be for 15 years subject to renewal every five years.
　As per existing National Park and Wildlife Conservation Regulations, companies must be selected through open completion for providing services inside the park. “The then government arbitrarily extended lease contracts for the resorts without any open competition, thereby flouting the regulations,” the official added.
　Under the new agreement, no permanent structure will be allowed and existing structures must also be relocated.
　The seven big resorts operating inside the park are Tiger Tops Jungle Lodge -the first resort of its kind in Nepal, Machan Wildlife Camp, Chitwan Jungle Lodge, Gaida Wildlife Camp, Island Jungle Resort, Hotel Narayani Safari and Temple Tiger.
　“A maximum of five years will be given to relocate permanent structures outside the park so that wildlife safaris won´t be affected,” said the source. “Resorts are allowed to set up only tented camps inside the park,” added the source.
　A taskforce headed by Madhav Acharya, a joint secretary at MoFSC, had suggested a few months back different models for operating the existing resorts, besides identifying four new resort sites inside the park.
　The taskforce had divided resorts into three categories on the basis of the service they can provide and wildlife sightings in their areas.
　“We have recommended annual royalties of Rs 10 million and Rs 8 million for categories A and B respectively where as Rs 6 million is set for category C resorts,” said a member of the panel.The committee had also suggested allowing only tented camps inside the parks, allowing the resorts three years to construct their permanent structures outside the park.
　The then government had decided to extend the lease term by 15 years in 1994, drawing criticism from conservationists and civil society who blamed the resorts for destroying bio-diversity inside the park. The park is listed among UNESCO´s World Natural Heritage sites.
　The resorts are paying the government around Rs 30 million in royalty and conservation fees in addition to tourist entrance fees and camping fees. However, they are criticized for dillydallying in revenue payment. A case has been filed at the Commission for Investigation of Abuse of Authority against MoFSC and hoteliers for failing to collect or pay revenue as agreed in the lease contracts.

●NB Bank rights shares auctioned●

　Posted on 2009-07-07
　KATHMANDU: The rights shares of Nepal Bangladesh Bank (NBB) which found no takers during an earlier issuance have been picked up at Rs. 231 per share at auction.
　The price is a little lower than the current market price of its stock which was traded at Rs. 255 per share on NEPSE on Monday.
　NBB allotted the shares on Monday in accordance with its auction notice published on June 20. The bank had put up 366,761 units of shares for auction.
　According to Awatar Neupane, NBB company secretary, the general public emerged the highest bidder for its rights shares. Those who bid more than Rs. 162 per share have been allotted shares, he said. The number of investors who have received rights shares has not been revealed.
　As per a recent directive of the Security Board of Nepal (SEBON), unsubscribed rights shares were put up for auction.
　Earlier, the employees and existing shareholders used to divide the remaining shares among themselves. SEBON introduced the new directive so that companies could collect more money through auction instead of distributing the stock among employees and existing shareholders.
　With the new share allotment, the bank´s paid-up capital will increase to Rs. 1.86 billion.
　Earlier, Nepal Rastra Bank (NRB) had allowed NBB to issue rights shares to help it to increase its paid-up capital and reduce the holding of the NB Group in the bank.
　The bank´s financial condition is still not sound with the capital fund against risk weighted asset remaining still negative by 8.2 percent and its non-performing loans remaining at 29.9 percent, according to the bank´s third quarterly report of the current fiscal year.
　The capital fund must be positive by above 10 percent as per NRB rules and the NPL should be under 5 percent for a healthy bank.
　There was also speculation that the bank could scrap the auction of its remaining shares as the number of quoted tenders had surpassed the sealed tenders.
　According to sources, two bidders had enclosed eight more tenders in two sealed envelopes. However, the price of each tender was quoted.
　Neupane said, without giving details, that the issue was settled as per the legal provisions of the country.
　However, an official at NEPSE said the different tenders quoting different prices in a sealed envelope by a single person was accepted when Nepal Bank Limited had sold its shares in Standard Chartered Bank at auction a few years ago in order to end crossholding.
　"The same tradition could have been followed," the official said.

●Steel import soars five-fold●

　Posted on 2009-07-07
　PARSA: The import of Indian semi-structured steel rods has increased five-fold during the current fiscal year.
　Nepal imported 5.89 million kg of semi-structured steel rods worth Rs. 271.9 million via Birgunj transit in the first 11 months of the fiscal year. Imports during the same period last year amounted to 1.05 million kg worth Rs. 4.19 million, according to the Birgunj Customs Office.
　Rajesh Kyal, manager of Narayani Rolling Mill, said that imports soared this year as domestic production fell short of demand.
　He added that the country´s monthly requirement of steel rods stood at 50,000 tons. Nepal produces 40,000 tons of steel rods per month.

●FNCCI asks parties to get their act together●

　Posted on 2009-07-07
　KATHMANDU: The eighth executive committee meeting of the Federation of Nepalese Chambers of Commerce and Industry (FNCCI) has expressed concern over the ongoing political stalemate and deteriorating law and order.
　The meet held on Friday asked the political parties to give a way out to the nation.
　Making public the executive committee´ decision on Sunday, FNCCI president Kush Kumar Joshi said that the recently formed Alliance of Citizen Professionals and Entrepreneurs, of which FNCCI is also a member, would organise a meeting of all the stakeholders to end the cycle of strikes and bandhs and maintain law and order.
　The FNCCI has also reiterated its demand for an end to the disposal tax and instituting multiple value added tax (VAT) rates. Expressing concern at increased hooliganism in the collection of disposal tax, Joshi said that the tax was three-fold higher than what used to be a reasonable amount.
　He stressed that the government should impose multiple VAT in order to ensure competitiveness of Nepal´s products.
　The apex body of the private sector has also decided to pressurize the government not to introduce any new taxes. The previous government wanted to introduce a wealth tax which the private sector has been opposing fiercely.
　The meeting also decided to spearhead construction of small- and medium-scale hydropower plants in 45 districts. "It will select a company to do a study of the technical aspects of these projects," he said.
　The FNCCI has decided to permit Power Take to carry out a study on alternative energy generation from the waste produced in the Kathmandu Valley.
　The FNCCI, chambers in the valley and local agencies of the valley have reached an agreement on FNCCI´s role on waste management in Kathmandu.
　The meeting also decided to take the initiative to keep the Nagarkot area free from labour problems. During the meeting held in Nagarkot, FNCCI officials also held talks with leaders of trade unions there, according to Joshi.
　The FNCCI will also help to develop Bhaktapur as a district with commercial agriculture, handicrafts and tourism. It also demanded continuation of the Youth and Small Entrepreneurs Self-Employment Programme introduced by the former government.

●Thailand dominates upmarket fruit sales in Nepal●

●Handicraft trade picks up in Okhaldhunga●

Posted on 2009-07-06
OKHALDHUNGA: Gift House, a shop and promotion centre of handicraft goods established by 24 entrepreneurs in the district headquarters, has been attracting a clientele of government officials, local residents and internal and external tourists.

"Normal products can be bought in the market. But it is hard to find hand-woven products," said chief district officer Chandra Prakash Pant, who was buying a dhaka shawl prior to

his transfer from the

district. Similarly, district education officer Shyam Prakash Subedi, who was bargaining for allo fabric, added, "Cottage handicraft products are the best in quality."

Till a few months ago, the handicraft business in the district had been decreasing; but now it has slowly started to win the hearts of the people. There are various handicraft products in the house. Hand-woven bags, handkerchiefs, sweaters, shawls, caps, mufflers, purses, shoes, sandals and bamboo products are put on display for sale.

The 24 entrepreneurs from Baruneshwor, Ketuke, Jyamire, Moli, Thaklo, Shree Chaur, Salleri, Bayteni, Bigutar, Okhaldhunga, Rumjatar and Makhma had jointly set up the house after completion of their

training provided by Cottage and Small Industry with a view to selling and promoting handicraft goods.

According to entrepreneur Milan Chandra Shrestha, the house has helped entrepreneurs to sell their products and increase business at a time when there was a lack of market.

The entrepreneurs have also been exporting handicraft products to Jammu and Kashmir of India, Sweden, the U.S.A. Switzerland, the U.K., Korea and Canada, said Kul Bahadur Rai, manager of the Gift House.

●Court freezes NDB assets●

Posted on 2009-07-06
KATHMANDU: The Appellate Court, Patan issued an interim order on Sunday stopping any transaction of the assets of Nepal Development Bank (NDB) while ordering it to submit a clarification within seven days why it should not be liquidated.

The single bench of Judge Devendra Gopal Shrestha gave the order in response to the application of Nepal Rastra Bank (NRB) asking that the bank be liquidated. The court has also fixed the hearing for July 15.

Ordering the bank to produce itself before the court on July 8, the Appellate Court, as per the Insolvency Act, has prohibited the bank to hand over, sell or put up its property as collateral.

The court didn´t issue any order regarding NRB´s request that it be allowed to return the money of ordinary depositors. There is about Rs. 190 million worth of deposits belonging to ordinary depositors in the bank. They have been demanding an early return of their money.

It is the first instance in Nepal´s history of any financial institution being taken to court for liquidation. NRB said that it was compelled to go to court for liquidation of NDB as it had violated the central bank´s repeated directions to improve its financial condition which resulted in losses amounting to more than double its paid-up capital.

NDB has incurred losses of Rs. 690 million although its paid-up capital is just Rs. 320 million. Its liability stands at Rs. 1.41 billion, according to NRB.

If the court gives the order for liquidation, the Office of the Company Registrar will appoint a liquidator. As per the Bank and Financial Institution Act, ordinary depositors get the highest priority after the expenses of the liquidator. Institutional depositors at NDB including the Army Welfare Fund and the Employees Provident Fund are most unlikely to get their money back because they are fourth in line after fixed depositors, according to NRB. Their deposits are worth Rs. 180 million and Rs. 331 million respectively in the bank.

Those who invested in rights shares are most likely to get

their money back because that money has not been allotted yet, according to NRB. Shareholders had invested Rs. 81 million in rights shares.

●New iron ore deposit found in Nawalparasi●

Posted on 2009-07-05
KATHMANDU: A government team that went to Nawalparasi to explore coal mine has instead found the third and possibly the largest iron ore deposit in the country.

The Department of Mines and Geology (DoMG) had initiated the exploration hoping to find coal deposits, given the past geological finding. However, its exploration team struck at iron ore deposit in Pokhari and Durlung villages, east of Arunkhola in the district, recently.

The deposit is 20 meters thick and two square kilometers of area. The quality of the ore and economic viability of extracting iron from it are yet to be ascertained.
Preliminary tests of the samples, nonetheless, have indicated that the ore could be of the best quality found so far in the country, said a senior DoMG official.

“We have forwarded the sample for detailed laboratory study, which will disclose its contents and quality,” Uttam Bol Shrestha, senior Divisional Mining Engineer at the department told myrepublica.com. Test report will come in next one-and-a-half month.

Although occurrence of iron ore has been reported in more than 85 localities across the country, government´s study has so far established only two reserves at Thoshe in Ramechhap district and Fulchowki in Lalitpur district as qualitatively and commercially viable for extraction.

However, the country has not been able to smelt the ores for commercial benefits.

The government never handed over the ore reserve of 10 million tons in Fulchowki to the private extractors because the area lies in the area possessed by the Nepal Army. Besides, the mining factory could also threatened the rich bio-diversity available in the locality.

“We could never know the socio-economic benefits of iron mining, as environmentalists´ resistance to mining has prevailed without appropriate cost-benefit analysis,” said an official at Ministry of Industry.

Deposits in Thoshe, which is estimated to possess iron ore reserve of 10 million tons, on the other hand was extracted in bits and pieces during Rana regime for making arms and agricultural utilities.

It was also smelted and used for constructing bridges along Bhainse-Bhimphedi section of Tribhuvan Highway. The mining was, however, closed in later decades. Easy availability of finished iron in the market reduced significance of resuming its mining.

However, considering the latest technological viability and private sector´s interest, the department recently granted the prospection license to NNC Minerals for conducting further exploration and mining of Thoshe deposit.

Sources informed myrepublica.com that NNC Minerals is presently taking initiatives to bring in Chinese investment and technology for further study and mining. If things moved ahead positively, Nepal could have first ever commercial iron mining industry in the next few years, noted officials.

As for the newly found ore deposit, officials said they would need to conduct a detailed study of the site to assess the volume of deposits and determine commercial viability of its extraction.

However, as it was found after the department forwarded its annual programs and budget requirements at the Ministry of Industry and National Planning Commission, the officials doubt whether they will be able to conduct further study on it in the next fiscal year.

“The department receives a meager budget. Hence, there is a little room of pursuing the study before mid-July 2010, unless the government decides to give additional budget for it,” said Shrestha.

●Indian cement import up●

Posted on 2009-07-05
PARSA: The import of Indian cement has been rising as load-shedding takes a toll on production at the country´s cement factories.

According to Ram Prasad Regmi, information officer at the Birgunj Customs Office, about 190 million kg of cement worth Rs. 1.09 billion was imported through Birgunj Customs as of mid-June. Imports during the same period last year amounted to 70 million kg. The figure does not include cement brought in illegally.
There are about 32 cement factories operating in Hetauda and Udayapur. Likewise, Jagadamba, Ambe, Shalimar, Star, Shri and Trishakti are among the cement factories operating in the Parsa Industrial corridor.

According to manager of Star Cement Factory, Rajesh Kayal, bandhs, strikes and load-shedding have prevented cement factories from running at their full capacity. There is only a 5 to 7 percent difference in the prices of Indian and Nepali cement.

●4 global firms vie to deliver 25,000 tons fertilizer●

Posted on 2009-07-05
KATHMANDU: The government is preparing to purchase an additional 25,000 tons of chemical fertilizer from overseas suppliers for distribution to farmers at subsidized rates.

According to a government official, four global firms have submitted bids as of June 26, the last day for bidding, to supply 12,500 tons each of diammonium phosphate (DAP) and urea, responding to a tender call by the Agriculture Inputs Corporation (AIC).

Bulk Trade of Bangladesh, Mid-Gulf International of Cyprus, Transammonia of Switzerland and Iskenderun company of Turkey have bid for supplying 12,500 tons of DAP. Similarly, Bulk Trade, Mid-Gulf International and Transammonia submitted proposals to supply 12,500 tons of urea.

“We are studying the documents submitted by bidders and a board meeting will make the appropriate decisions within a week, taking into consideration the prices quoted and their international reputations,” Pashupati Gautam, managing director of AIC, told myrepublica.com.

The government has already selected Mid-Gulf International to procure 12,500 tons of DAP from China. The company offered a price of US$ 439 for delivery of the fertilizer to Nepal´s customs entry point. The company is delivering the fertilizer by mid-August.

Besides, out of the 32,500 tons of fertilizer (25,000 tons urea, 5,000 tons complex, 2,500 tons nitrogen) pledged for supply at Import Parity Price - an existing international market price, 7,500 tons of urea has already arrived and an additional 2500 tons is arriving in Nepal within a week. Brahmaputra Fertilizer Company, an Indian government undertaking, has been designated to supply fertilizer sold by the Indian government.

“We sent Rs 80.5 million to the supplier company Tuesday to procure an additional 5,000 tons of urea from India,” said Gautam. AIC has already paid Rs 304.8 million for 10,000 tons of urea. The Ministry of Finance recently provided Rs 500 million to AIC as reimbursement of fertilizer bills.

“The remaining 17,500 tons will be procured by the end of August,” added Gautam.

Ending a more than decade long prohibition of subsidy on fertilizer the government decided a few months ago to provide a yearly subsidy to farmers on 100,000 tons of chemical fertilizer- one third the total fertilizer demand.

The government had ended fertilizer subsidies in 1997, bowing to mounting pressure from the donor community, which alleged massive misuse of subsidized fertilizer.

●Biratnagar sub-metropolis seeks more budget●

Posted on 2009-07-05
KATHMANDU: Biratnagar needs Rs 7 billion to develop it as a model city, according to Morang Society of Kathmandu (Mosoko) that has organised a programme here today in association wi-th Biratnagar sub-metropolis “To prevent Biratnagar from being dead city, the government should address the need of infrastructure development by allocating Rs 7 billion budget that would help complete five year master plan,” they said.

“The transformation of Dharan from a dead city to a model city is a role model,” said former mayor of Biratnagar Ashok Koirala. “The minimal budget of Rs 500 million is current requirement to solve key problems like flood,” he said.

“Biratnagar generates revenue of Rs 80 million annually from internal resource, whereas it has overall reso-urce of Rs 180 million,” Dilip Chapagain, chief of Biratnagar sub-metropolis, said.

“The administrative expenses alone is about Rs 80 million,” Kedar Karki, coordinator of of Biratnagar sub-metropolis said adding that Rs 100 million budget is not enough for development activities. The government has addressed only 10 per cent of our demands like proper sewage management system, construction of ring road, bypass, sports hall, children parks and well organised urbanisation along with industrialisation.

“Biratnagar needs to develop infrastructure,” said Babu Lal Paswan, CA member from Biratnagar. He also suggested to mobilise donors’ fund properly. “Economic and social development is an urgent need.”

Similarly, Tek Nath Neupane, president of Media Mission said that substaintial budget allocation in the budget for 2009-10 could bring lost glory of Biratnagar back.

●CG Manipal, Campion JV●

Posted on 2009-07-05
KATHMANDU: CG Manipal — a joint venture of Chaudary Group (CG) and Manipal K-12 formed — is in the process of acquiring 90 per cent shares of Campion schools and colleges with the original owners retaining 10 per cent.

“The joint venture in the field of education will offer management services to existing and new schools under the brand name CG-Manipal Schools,” said Nirvana Chaudary, executive director of CG. “The venture would also offer ICT-based school learning solutions and tutorials,” he said adding that CG believes that high quality affordable education is the key to development.

“CG already runs Chandbagh School’ in Kathmandu. Based on the experience from Chandbagh School and with a desire to relplicate and move to the next level, CG has joined hands with Manipal K12 Education,” Chaudhary added.

●NDB liquidation: NRB moves to court●

Posted on 2009-07-05
KATHMANDU: Nepal Rastra Bank (NRB) registered an application at the Patan Appellate Court on Friday seeking liquidation of crisis-ridden Nepal Development Bank (NDB).

It is the first ever instance of any financial institution being taken to court for liquidation.

"We filed the application at 2.45 p.m. asking the court to appoint a liquidator," said Dharma Raj Subedi, director of NRB who oversees the legal department.

"We also requested the court to order the liquidator to pay off the money belonging to ordinary depositors as soon as possible."

In the application running to more than 20 pages, the central bank has responded to the allegations made by the promoters of NDB in their clarification submitted to the central bank before it decided on liquidation, said Subedi.

The depositors have been asking the central bank to facilitate an early withdrawal of their deposits worth around Rs. 190 million.

The Appellate Court has fixed the hearing on July 5, said Subedi. The court may ask the defendant to submit its clarification before deciding whether to appoint a liquidator or not as per the Insolvency Act.

In addition to the ordinary depositors´ money, the Employees Provident Fund and the Nepal Army also have deposits of Rs. 331 million and Rs. 180 million respectively in NDB. They have been urging the central bank that they should be treated equally if the bank is liquidated.

The Bank and Financial Institution Act (BAFIA) has given first priority to ordinary depositors after the liquidator´s expenses followed by fixed depositors and then only other types of depositors.

"Institutional depositors have been classified as other types of depositors," Subedi said.

Meanwhile, the central bank has fined the chairman and directors of NDB for falsifying their report about their involvement in other financial institutions.

According to NRB, it has slapped a penalty of Rs. 200,000 on NDB chairman Amar Gurung and Rs. 100,000 each on the directors for sitting on the board of both NDB and Nepal Cooperative. The law prohibits directors of one financial institution for sitting on the board of other financial institutions.

After NRB initiated the liquidation process in the first week of June, the central bank found that NDB chairman Amar Gurung was also chairman of Nepal Cooperative where NDB had deposits of Rs. 90 million. Likewise, NDB´s directors Kiran Joshi and Lab Raj Joshi are also directors of both institutions.

NRB had sought clarification from three NDB promoters in the first week of June why they should not be penalised for being involved in the board of both institutions.

●Nepal drops JNP for Visakhapatnam port●

Posted on 2009-07-04
KATHMANDU: Nepal has decided to seek Visakhapatnam port in Andhra Pradesh of India as additional transit port for catering to the Nepali west-bound transit cargos, dropping previous request for Jawaharlal Nehru Port (JNP) in Mumbai.

The change has been made after a study by Ministry of Commerce and Supplies (MoCS) reckoned that funneling the export cargo through Visakhapatnam will be more cost effective and efficient than through JNP.

Previously, Nepal had identified JNP as the most feasible port for the movement of third-country transit goods, particularly those to-and-from the key western markets, such as the US and EU, among others.

A study commissioned by Trade-Related Capacity Building Project based in the ministry too had reported that movement of transit goods through the port in Mumbai will be cost-effective by some 20 percent than the Kolkata port.

JNP is located some 1,900 kilometers from the dry port in Birgunj. Although about two-fold distant than Kolkata port, the study has noted that shipping freight cost from JNP, located in the west cost of India, will be cheapest than any other ports of India.

Subsequent to that finding, Nepal government consistently pushed for securing transit rights through JNP, apart from the regular Kolkata port. India had very recently agreed in principle to allow movement of transit goods through the port for Nepal, and the two sides were scheduled to sign agreement to this effect during the upcoming visit by Prime Minister Madhav Kumar Nepal to India.

However, MoCS officials said that the study done then had taken into account shipping cost and time of travel only and ignored the transportation cost along the land route. It had also ignored factors such as efficiency and handling cost.

"The latest study, which took note of all the costs and even evaluated the efficiency of various Indian ports, has recommended that moving the transit goods through Visakhapatnam port will be cheaper than JNP," an MoCS official told myrepublica.com.

Visakhapatnam port, although located in the east coast of India and more far from the ports of western destination markets, is closer to Birgunj dry port than JNP by about 600 kilometers.

"This will raise shipping costs marginally, but as the cost of overland transport is far higher than ship transport, it is more cost effective than JNP," said the source.

Besides, the report has pinpointed that Visakhapatnam port is more efficient than JNP and, hence, will subject lesser demurrage and handling costs for the traders.

Sources said that the MoCS is informing its Indian counterpart about the latest change in their choice soon. "Since India has already agreed in principle to provide additional transit ports to Nepal, we think India will go along with our priority," said the source.

●Govt okays Korea labor pact renewal●

Posted on 2009-07-04
KATHMANDU: The cabinet meeting held on Wednesday has given a go ahead to the Ministry of Labor and Transport Management (MoLTM) to renew the existing labor pact with South Korea to send Nepali workers under Employment Permit System (EPS).

“We have forwarded the Memorandum of Understanding on labor to Korean government through the Ministry of Foreign Affairs, after the cabinet´s nod to renew the two-year-long pact that expires on July 22,” said a senior official at the MoLTM.

Nepal and Korea had signed the deal on July 23, 2007 to provide Nepalis employment opportunities in Korea in different sectors under EPS. Under the agreement foreign workers are entitled to salaries and benefits at par with Korean counterparts.

Korea, which is employing total 195,000 foreign workers including 2,800 Nepalis, has already signed labor pacts with 15 countries to employ foreign workers under EPS. Under EPS, foreign workers [including Nepali workers] can earn monthly salary of around US$970 to US$ 1000 depending upon the companies they work for.

Under the EPS--Nepali workers between the age of 18 and 39 years can get employment opportunities in Agriculture, fishery, manufacturing, service and construction sectors.

More than 6,500 Nepali blue-collar job aspirants have been selected and names of those job aspirants have been sent to Korea´s Human Resource Department (HRD), which arranges job contracts as per demands by Korean employers.

Korea has suspended from July 10 the fresh intake of foreign workers till August 30 in manufacturing sector saying that quotas for foreign workers in this sector have exhausted. However, workers signing the work contracts for other sectors such as agriculture and fishery have not been affected by the suspension.

●Air arrivals up 6 percent●

Posted on 2009-07-04
KATHMANDU,: Tourist arrivals by air increased by 6 percent in June. The latest figures released by the Nepal Tourism Board (NTB) reveal that 23,222 tourists visited Nepal in June against 21,901 in June 2008.

According to the NTB, the most encouraging results came from the European market which registered an overall growth of 25 percent. Arrivals from the U.K. have maintained the increasing trend with a growth of 15 percent. Nepal tourism´s major generating markets in Europe are Germany, the Netherlands, Italy and Norway. All have posted significant increases.

Likewise, Chinese tourist arrivals have increased by 17 percent besides Thailand (37 percent), Malaysia (3 percent), South Korea (55 percent) and Singapore (8 percent). Japan was the one Asian market from where arrivals decreased (-4 percent).

According to the NTB, arrivals from Bangladesh, Pakistan and Sri Lanka have witnessed a positive growth of 16 percent, 4 percent, and 7 percent respectively. However, arrivals from India, one of the major markets for Nepal, dropped 6 percent.

Tourist arrivals from the United States have also registered a growth of 21 percent. Despite a 6 percent rise in June, overall tourist arrivals by air in the first six months of 2009 are still down by 6 percent compared to the same period last year.

Posted on 2009-06-30
KATHMANDU: Finance Minister Surendra Pandey ruled out multiple value added tax (VAT) rates -- something that the private sector has been demanding for a year -- for the time being, saying that more discussions were needed for switching over to the new regime.

He also stated that immediate establishment of Central Revenue Board (CRB), which was promised by the Maoist-led government, was also not possible, as the modality of its operations and functions still called for more discussions.

The private sector has been demanding that the government enforce multiple VAT rates of 1, 4, 9 and 13 percent from the present 13 percent from the new fiscal year. While pushing for the change, the private sector has argued that multiple rates would enable the government to mobilize more revenue by plugging under-invoicing problem, among others.

“The past government deferred the change, despite its approval, because revenue administration required additional time for the adjustment. But as the whole fiscal year has passed, we urge the government to implement it in 2009/10,” Kush Kumar Joshi, president of Federation of Nepalese Chambers of Commerce and Industry (FNCCI) said.

Speaking at a function in Kathmandu on Monday, Minister Pandey, however, said discussions were still on about the implications of the change in VAT rates. “It cannot be implemented immediately as the private sector has demanded,” he stated.

As for the CRB, Pandey noted that the Board was very necessary for giving directions and guiding the operations of the revenue administration.

But we have not yet concluded its governance framework - whether to develop it as an independent and autonomous supervisory body or limit it as an advisory body with mere investigating authority,” said the minister.

The Maoist-led government in the budget for the current fiscal year had announced that the CRB with a complete authority will be set up this year.

Contrary to the urgency shown by the past government, Revenue Advisory Committee (RAC) that submitted its report to the Finance Minister at the function has also suggested to the government to first be clear on the degree of autonomy to be granted to the CRB, carefully chalk out its functions and its relations with the government and ways to make its structure accountable.

The private sector representatives, on the other hand, demanded their representation in the CRB.

They also demanded that the government revoke tax on scraps, saying that the government was getting mere Rs 300 million in revenue from it, whereas the parties assigned to collect it mobilize more than Rs 2 billion from the private sector.

Likewise, the businessmen also urged the government to set up industrial security force and also announce differential tariffs on import of raw materials and import of finished goods.

Posted on 2009-06-30
SANKHUWASABHA: The current fiscal year ends in two weeks, but this has not stopped the Ministry of Finance from allocating three million rupees to Sankhuwasabha District Development Committee (DDC) as development budget.

Sankhuwasabha DDC received a fax from the ministry on Monday pertaining to budgetary allocation for six development projects. The District Financial Comptroller Office (DFCO) will release the sum to the DDC once the latter produces the ministry’s letter.

After getting the sum, the DDC must constitute consumers’ committee for each project, do cost estimation and release the budget to committees so that they can start work on the projects, which, according to DDC officials, will take about five days.

With the new fiscal just days away, there is no way the budget can be spent, which means the budget will freeze.

“The budget will freeze and will ultimately be added in the government’s revenue account,” says Local Development Officer (LDO) Laxmi Niraula. “Allotting development budget at this time does not make sense.”

DFCO will close the accounts of all government offices in the district by next week or so — five days before the end of the fiscal year — as all projects are supposed to complete by then.

The DDC is already worried about spending the development budget of Rs.13.5 million and eight million rupees released earlier, and now the weight of three million rupees has been placed on its shoulders.

CPN-UML lawmaker Dambar Bahadur Khadka, who lobbied for the latest budget for Sankhuwasabha, believes the budget will be spent on time. “The budget will be spent. That is why it was allocated in the first place.” DDC officials, however, are opposed to the lawmaker’s claim. “The only way possible to spend the budget I see,” Niraula says, “is to extend the fiscal year.”

●NAC incurs Rs 50m loss●

Posted on 2009-06-30
KATHMANDU: Nepal Airlines Corporation (NAC), the national flag carrier, incurred an operating loss of around Rs 50 million in the last fiscal year, largely due to unavailability of one of the aircraft and rising fuel prices.

The unaudited report of NAC says that the government-owned airline company generated revenue of Rs 2.97 billion in the last fiscal year ended July 2008, whereas its expenditure in the same period stood at Rs 3.02 billion. In the fiscal year 2006/07, the company had generated an operational profit of Rs 610 million, Manik Man Bajracharya, director of NAC´s finance department told myrepublica.com.

“The company incurred a loss last year since one of the airplanes failed to conduct daily flights for eight months due to engine problems,” Bajracharya said. NAC currently has two 757 Boeings purchased some two decades ago and one of them usually lands in the garage due to its old age. One of its planes is currently undergoing regular check-up in Israel and is expected to come back to Nepal on July 15 or 16.

Due to lack of aircraft, NAC on the one hand has not been able to cover many destinations worldwide while on the other has been postponing or canceling many flights. This has also had negative impact on the tourism sector of the country.

Another cause that had eroded the earnings of the company in the last fiscal year was high fuel prices, which had skyrocketed to up to US$146 per barrel in July.
The company´s expenditure on fuel had stood at Rs 1.12 billion in the last fiscal year, whereas it had spent a total of Rs 1.96 billion in the fiscal year 2006/07 when both of its planes were operating for most of the parts of the year. The company´s expenditure on fuel makes up around 40 percent of the company´s total expenditure. In terms of income, the company generates majority of its revenue from passenger ticket sales and ground handling at Tribhuvan International Airport.

In the last fiscal year, the company had generated revenue of Rs 1.50 billion from ticket sales and Rs 934 million from ground handling. Likewise, the company had earned Rs 300 million from tariff levied on excess baggage, Rs 57.10 million from cargo operation and Rs 6.30 million from charter flights operation.

NAC currently has a fleet of six aircraft. Of this, three are Twin Otters which operate on domestic sectors. The airline company flies to six international destinations and in 25 domestic sectors.

●CG joins hands with Manipal. Plans to invest in a chain of schools ●

Posted on 2009-06-30
KATHMANDU: After successful operation of businesses related to fast food, banking, electronic appliances, daily consumable goods and services, Chaudhary Group, one of the leading business houses in Nepal, is planning to strengthen its hold in the education sector.

The group, which has invested around Rs 18 billion in several industries in Nepal, had made a foray into the education sector two decades ago with the establishment of Chandbag School in Maharajgunj, Kathmandu.

Although there had been a lull in the group´s investment in this sector since that time, CG has finally demonstrated that it has rejuvenated that interest by entering into partnership with Manipal K-12 of India.

Manipal K-12 is a part of Manipal Group, which has 60 years of experience in higher education field. The group is present in over 20 countries worldwide and has two universities, four offshore campuses and 20 higher education institutions that offer over 180 courses to more than 12,000 students a year. Manipal K-12 itself is in the process of opening schools across India.

As per the announcement made on Monday, the joint venture company between Chaudhary Group and Manipal K-12 will acquire the management of a chain of schools and +2 colleges in Nepal. These institutions will be rebranded as CG-Manipal Schools. New educational institutions from pre-primary to higher secondary level will also be opened throughout the country in the coming days.

"The primary aim of this joint venture is to provide world class education at reasonable cost to all Nepalis," Nirvana Chaudhary, executive director of the Chaudhary Group, told a gathering organized to annouce the partnership. He had earlier told Republica that CG-Manipal plans to enroll around 10,000 students in CG-Manipal institutions in the next five years.

With a theme of ´learning for life,´ CG-Manipal is planning to make use of cutting-edge teaching methods to provide one of the best education to students, said Umashankar Vishvanath, president of Manipal K-12 Education. A visibly upbeat Vishvanath stressed that the partnership between Nepal´s top business house and a leading educational network will greatly help the country to enhance its educational quality to match with the international level.

CG-Manipal also plans to offer ICT-based school learning solutions and tutorials. But the use of technology will be rightly mixed with pedagogy for an effective learning process. Literary and cultural activities will also be blended with every student´s academic life and teachers will be highly trained to exploit the full potential of every student.

The 138-year-old Chaudhary Group is one of the largest corporate houses in Nepal with over 40 businesses to its name.

●FMD breaks out in over dozen districts●

Posted on 2009-06-25
KATHMANDU: Outbreaks of Foot and Mouth Disease (FMD)- a viral ailment - have been recorded in livestock in more than a dozen districts with the beginning of the hot season and increasing movement of animals. Officials said FMD, which is also called hoof-and-mouth disease, is gripping different districts from the Himalayan district of Manang to far eastern districts like Ilam and districts in western Nepal.

“With the soaring mercury levels reports of FDM cases have been pouring in for the last couple of weeks. Even districts with a cold climate such as Manang are witnessing the disease,” Baikuntha Parajuli, head of the Animal Health Directorate, told myrepublica.com.

“We have been receiving applications from farmers to extend them support to control the disease.”

With reports of the outbreak still trickling in, the exact number of infected animals is unknown.

Parajuli said FDM - or Aphtae epizooticae in scientific parlance - is a highly contagious and sometimes fatal viral disease that affects cloven-hoofed animals including domestic animals such as cow, bull, water buffalo, sheep, goat and pig as well as animals in the wild like antelope and bison.

“As herds of domestic animals are moving upward from lowland pastures with the onset of the hot season, such animals are acting as carriers of the disease,” Parajuli added.

The disease is characterized by high fever that declines rapidly after two or three days, blisters inside the mouth that lead to excessive secretion of stringy or foamy saliva and to drooling, and blisters on the feet that may rupture and cause lameness.

Veterinarians also said an infected adult animals may suffer weight loss from which they do not recover for several months, and in the case of cows milk production can decline significantly.

However, he said the directorate has been delivering necessary antibiotics to the affected districts in addition to technical support to control the disease.

Though the fatal disease occurred in the past also, the government has failed to formulate any concrete program to fight it.

“We had devised a plan a few years ago to combat the disease with some suggestions including massive vaccinations in dairy pocket areas and restriction on the movement of animals in the disease outbreak season.

"However, the plan is collecting dust due to lack of interest in coming up with a special plan against the disease,” added Parajuli.

●VAT collection falls short of target●

Posted on 2009-06-25
KATHMANDU: Revenue collection has broken all records, but the collection of value added tax (VAT) has fallen short of the target.

The government has set the goal of raising Rs. 41 billion in VAT in the current fiscal year. However, with three weeks remaining in the fiscal year, it has collected only Rs. 35 billion.

There was a clear indication in the half-yearly review of the budget that VAT collection would fall short. In the first six months of the fiscal year, the government collected Rs. 17.15 billion as VAT which was 88.78 percent of the target. The half-yearly target was Rs. 19.32 billion.

According to the latest data of the Inland Revenue Department (IRD), it has collected Rs. 12.36 billion as VAT against the target of Rs. 13.11 billion. Revenue officials say lack of enforcement is one of the reasons for the low collection. Krishna Hari Banskota, acting secretary for revenue, said the less than expected collection was a result of weak enforcement. Banskota added, "There is need to enforce the

law requiring traders to issue VAT bills and to monitor it."

According to revenue officials, under valuation of goods at the customs offices by importers and the disinterest among retailers to demand the actual bill from importers is a problem.

The government had said that a monitoring team would be set up and mobilized to monitor the VAT billing system strictly.

Given the fragile political environment, the IRD has not been able to enforce it stringently. Three months ago, when the Revenue Investigation Department (RID) mounted a raid at Suraj Arcade and the RB Complex on suspicion of tax evasion, the officials were manhandled and held captive for hours.

Another reason behind the low VAT collection is low development expenditure. Banskota said, "When there is a slowdown in development expenditure, VAT also goes down."

Meanwhile, revenue collection in the first 11 months rose to Rs. 121.24 billion against the goal of Rs. 117.80 billion.

However, the level of development expenditure is still low. According to the ministry, capital expenditure remained at Rs. 33 billion as of mid-June which is one-third of the total capital expenditure allocated for the current fiscal year.

●Jute industry hamstrung by raw material shortage●

Posted on 2009-06-25
ITAHARI: More than one dozen jute factories in Sunsari and Morang are facing a shortage of raw materials.

Because of the short supply, the factories have downsized their workforce. Many jute workers are at risk of losing their jobs, and jute production is headed for a decline.

Nepal´s jute industry imports 80 percent of the raw material from India and Bangladesh with the rest being obtained locally. The annual import amounts to 100 tons worth Rs. 1 billion.

The jute industry faces tough days ahead as output of raw jute in Nepal, India and Bangladesh has dropped because of drought. "Mainly factories dependent on imported raw jute are in a tough spot," said Phul Kumar Lalwani, who has headed Biratnagar Jute Mills for a long time. "As there is no work, the labourers and the economic sector as a whole will face difficulties."

According to traders, the production of jute has decreased drastically this year in Nepal, India and Bangladesh. India, which used to produce 2.5 million tons of raw jute, is expected to produce only 1.7 million tons. Similarly, Bangladesh will be producing only 600,000 tons of raw jute this year compared to 1 million tons previously.

According to Hari Prasai, technical officer of the Jute Research Programme, jute production this year was negative due to the Koshi flood of last August which swept away huge areas of land used for jute farming. "There has been talk of jute farming at the national and regional levels. But all the effort initiated by the government two years ago to increase output have been futile," said Prasai.

●Realty transactions spiral down●

Posted on 2009-06-25
KATHMANDU: As buyers withhold procurement plan anticipating a price drop, realty transactions in two districts of Kathmandu Valley have spiraled down substantially during the last one month (mid-May to mid-June). Records at the Department of Lard Reforms and Management (DoLRM) show that transactions dropped by 15 to 45 percent in the 11th month of 2008/09, compared to the previous month, at land revenue offices in Kathmandu and Lalitpur districts.

Land transactions were faring through a double-digit growth every month at those offices till the first eight months of the fiscal year.

Transactions are still growing at positive rate in Bhaktapur though, stated Raju Basnet, planning officer at the Department.

Among the three LROs in Kathmandu, transactions have dipped the most at Chabahil that covers deals from the eastern and northern parts of Kathmandu. Said Dhruba Bahadur Singh, an official there, daily transactions at the office have dropped to an average of 150, whereas it used to cross 300 deals a day till last month.

The number of transactions in Lalitpur too have dropped by about 15 percent, compared to the previous month.

As a result, revenue collection of the government dropped by 22 percent to Rs 237 million during the eleventh month of the fiscal year. Government´s revenue collections had totalled almost Rs 400 million in the eighth month of the fiscal year, when realty transactions touched its peak.

However, market had started to stagnate from the 9th month (mid-March to mid-April) of the fiscal year, with revenue collection slowing down in the following months.

Raghunath Adhikari, chief of Kalanki LRO, attributed the present slowdown as an impact of the banks´ and financial institutions´ tightening their lending in the sector.

Banks and financial institutions have mainly refrained from lending in the sector after Nepal Rastra Bank (NRB) warned them that real estate boom was unnatural and instructed them not to make further investments in the sector.

The commercial banks have invested about Rs 30 billion in the sector, and the central bank has tagged it unsafe, as realty burst, if happens, will straight away subject those investments to risk.

Following the warning by the central bank, property dealers stated that the buyers have developed a perception that the realty bubble is on the verge of burst and have preferred to ´wait´ for now.

“They (buyers) have anticipated prices to fall and hence, have withheld their procurement plan for now,” said an official of Nepal Land and Housing Developers´ Association.

Present stagnation has not impacted the prices of the property though, which have more than doubled over the past one year.

Despite the latest slowdown, the government has already mobilized Rs 6 billion in revenue from the sector over the first eleven months of the fiscal year. The collection is far above the target set for the year, which is Rs 4.80 billion.

●Bankers meet PM●

Posted on 2009-06-25
KATHMANDU: A delegation led by Manoj Bahadur Shrestha, chairman of the Forum of Nepalese Banks, met with Prime Minister Madhav Kumar Nepal on Wednesday and briefed him about the burning issues related to the banking sector and the domestic economy.

Shrestha also apprised the PM of the global economic crisis and cohesive efforts that the board and the management of Nepali banks should make to escape unscathed.

“The PM commended the initiative of the forum and assured the delegation that he will positively look into the concerns of the forum and direct the concerned authority for early resolution of issues raised in the memorandum,” states a release issued by the forum on Wednesday.

The forum is a corporate social forum established recently. The forum has created a nine-member ad-hoc executive committee under the chairmanship of Shrestha. The prime objective of the forum is to fairly represent and lobby for the interest of all stakeholders in the banking sector.

●LPG firms, NOC in dispute●

Posted on 2009-06-24
KATHMANDU: Liquefied Petroleum Gas (LPG) companies and Nepal Oil Corporation (NOC) are in dispute over the latter´s move to regulate the companies´ operations and monitor the cooking gas market by enforcing LPG bylaw.

NOC executive board has already endorsed the bylaw that has for the first time set clear parameters for establishing LPG bottling companies and laid down codes of conduct for gas companies and their dealers.

However, Nepal LPG Industries´ Association (NLPGIA) has flayed the move, saying that the corporation is mere importer of fuel and has no authority to regulate the market. It has demanded the corporation scrap the regulation instantly.

NLPGIA has also forwarded a four-point demand to the corporation and has urged the state-owned petroleum import monopoly to fulfill it by June 28. “If the corporation does not pay heed, we will bring import and retailing of cooking gas to a grinding halt from June 29,” said Sita Ram Timilsina, official of the association.

Officials at the corporation, however, said that they are ready to talk with the association if they have problems with the provisions of the bylaw, but will not scrap the bylaw. Digambhar Jha, the chief of NOC, told myrepublica.com that until the government makes changes, NOC has the authority to monitor the petroleum market. “And we cannot allow them to continue supplying less gas (than the stipulated 14.2 kgs) and circulate substandard cylinders that put consumers´ lives at risk,” he stated.

The bylaw has for the first time tagged short-supplying of gas and circulation of substandard cylinder as serious crimes, and provisioned action as tough as termination of their operating licenses in case companies are found resorting to such practices.

The corporation, however, is open to holding talks on other demands of the association, such as ´no license to new companies´, adjustment of transportation fares while importing gas from farther off refineries including Haldiya and Mathura.

●Commodity prices hit the roof●

Posted on 2009-06-24
KATHMANDU: Inflation continues to rage at 11.9 percent with commodity prices increasing by up to 95 percent in recent months.

Prices of essential goods such as rice, oil, pulses, sugar, maize, vegetables and fruits have soared with a few goods like vegetable ghee, maida and wheat flour becoming cheaper.

According to the essential goods price list of the Department of Commerce, the price of mansuli rice has jumped by 64.49 percent to Rs. 43 per kg from mid-May to mid-June. It was selling for Rs. 26 during the same period last year. Likewise, the price of masino rice soared by 57 percent during the month against Rs. 46 per kg last year.

Pulses -- broken lentils, rahar and mash -- went up to Rs. 98, Rs. 102 and Rs. 95 from last year´s Rs. 23, Rs. 75 and Rs. 75 respectively. Maize rose to Rs. 67 per kg from Rs. 35 last year, which is an increment of 95.59 percent.

Prices of mutton, chicken and buff have increased by 22, 36.60 and 72.50 percent respectively. These meats used to cost Rs. 380, Rs. 180 and Rs. 100 during the same months last year.

Kailash Kumar Bajimaya, acting director general of the DoC, said that lower production, drought, dependency on imports, electricity shortage, hoarding, curtailing, frequent protests, strikes and blockages in various parts of the country are the major causes that pushed the prices up.

He said that the government was under process to bring Market Competition Act after which the trend of commodities hoarding and curtailing would be monitored strongly and completely discouraged.

Pabitra Bajracharya, president of the Nepal Retailers Association, said that there wasn´t any shortage of commodities in the market. "But still the prices are soaring and there isn´t any control mechanism initiated by the government," he said.

He said that the government should control the monopoly of the traders. "Prices of commodities controlled by the government have not soared. Only the prices of products which are being supplied by traders have been increasing," Bajracharya added.

Joint secretary at the Ministry of Commerce and Supplies, Ganesh Dhakal, said that the government was conducting a comparative study regarding the price hike in Nepal compared to India. "Our report will be completed within a month and measures to control price hikes will be taken accordingly," he said.

He added that the government would set up a Department of Supply Management under the DoC for addressing various issues related with market, consumers, commodities and its smooth supply. "The department is going to be established as per the upcoming budget," he added. Currently, the government has been distributing sugar, rice and oil at cheaper prices with a view to interfering with the unnatural price hike of these commodities.

●IPPAN calls for tax reforms●

Posted on 2009-06-24
KATHMANDU: A team from the Independent Power Producers Association Nepal (IPPAN) led by its president Sandip Shah on Tuesday met with Minister for Energy Prakash Sharan Mahat to put forward their demands regarding accelerating hydropower development in the country.

According to Sandip Shah, the meeting was held to discuss the present social, political and economic issues faced by a majority of hydropower projects and share the ongoing activities of IPPAN on the overall hydro sector development in the country.

Various issues hindering the development of hydropower in the country including tax holiday, VAT exemption, mortgage tax, wheeling tax and supremacy of the electricity acts, among others, were discussed during the meeting.

Likewise, reasonable power tariff rates for power producers, differential tariffs, construction of access roads and transmission lines under the BOOT scheme (buy, own, operate and transfer) were also discussed.

According to Shah, the power purchase agreement rates (PPA) offered by the Nepal Electricity Authority (NEA) for hydropower projects are not sufficient to encourage power producers to invest in the power sector.

He said the government should implement the new PPA in hydropower projects which is working on the old PPA rate so that investors would get some relief from the increasing prices of construction materials.

IPPAN has also urged the government to address its decision to provide income tax exemption for 10 years for all the projects which have started power generation in the new budget of the government.

Meanwhile, the team also dealt with the amendments being forwarded for the proposed Nepal Electricity Regulatory Commission Act 2066 and the Electricity Act 2066 including provision of VAT exemption for imported construction equipment, construction equipment and income tax.

He added that if the issues raised by IPPAN were addressed properly, lots of IPPs would make a beeline to generate power.

Speaking during the meeting, Minister Mahat said, "There is a need for more interactions between IPPAN and the ministry in order to identify possibilities regarding changes to be made in the power sector."

●Accounts manipulation lands finance company in the soup●

Posted on 2009-06-24
KATHMANDU: A day after Nepal Rastra Bank (NRB) decided to liquidate Nepal Development Bank, another financial institution has landed in trouble for trying to cook up its balance sheets.

World Merchant Banking and Finance Limited, a finance company, initially thought accounts manipulation would help it hide its bad loans, but this immoral act has proved self-defeating and causing a long-term damage on the company.

The entire saga began in December 2002 when a company named Eastern Suppliers approached the finance company for a loan of nine million rupees to supply coal to Udaypur Cement Factory. The amount was given in two installments of two and seven million rupees of which Rs 1.83 million has been recovered.

But when Eastern Suppliers deferred payment after repaying Rs 1.83 million, the finance company became suspicious and contacted Udaypur Cement Factory. To the surprise, Udaypur Cement told that the tender for supplying the coal was scrapped after Eastern Suppliers was found delivering inferior quality of coal. This meant the money that the finance company had lent to the company was at risk.

This sent alarm bells in World Merchant as the finance company established a year ago was on the verge of running in loss in the very first year of its operation. Fearing this would tarnish the image of the company, the evil bankers formed an unholy alliance with the borrowers and created a new loan portfolio but transferred the same ´troubled´ loan amount in the account created in another person´s name. In other words, the finance company´s balance sheet showed that the amount owed by borrowers was paid back and new loans were issued to new applicants. "But, in fact, the finance company was, only transferring the liability from one person to another, without recovering a single penny from the original borrower," said a high ranking official of World Merchant, requesting anonymity. At that time Ranjit Koirala was the CEO of the finance company, who currently lives in the US.

This illegal practice of transferring the ´troubled´ loan into a new person´s name continued for five years till 2007, when borrowers started asking the finance company to release some of the land held as collateral by the finance company. "To coax the management the borrowers paid back Rs 700,000 of the loan amount. But we did not agree," said the source. Then subsequently, the borrowers started claiming they did not owe any money to the finance company and it had failed to deduct the installment amount that borrowers had paid over the years, which, the finance company calls a "total lie." "We challenge the borrowers to show cash receipt if they had truly repaid the loan amount," said the source.

Then the matter went to the police and in January 2008, it asked the finance company to submit all the documents involved in the loan transaction. Then the central bank became wary of malpractices going in the financial institution and in April 2008 it warned World Merchant to discontinue the illegal practice of transferring liability of loan amount to new persons.

Soon after this, the finance company listed the main borrower, Rakesh Raj Sharma Dhungel of Biratnagar and eight other guarantors, as willful defaulters. According to the finance company, the borrowers owe Rs 14.56 million, including principal and interest, of which Rs 10.59 million can be recovered through foreclosures.

Today the management of the finance company acknowledges that it "made a mistake by establishing partnership with people having bad intentions." "Moreover, we made a mistake by not making public statement on what went wrong at the finance company. We were worried about losing our reputation," the source said. "But the damage has already been done."

On June 14 this year, Binit Mani Upadhyaya, CEO of the finance company, was arrested after borrowers lodged a complaint at the Commission for the Investigation of Abuse of Authority. Since then depositors have withdrawn around Rs 400 million from the finance company. "But we are not facing cash crunch as the central bank is indirectly pumping money into the financial institution," the source said.

The company is trapped in the mess that it had engineered itself.

●Govt targets netting 200,000 taxpayers●

Posted on 2009-06-24
KATHMANDU: In a bid to widen the tax net, the Inland Revenue Department (IRD) is planning to rope in 200,000 new taxpayers in the next fiscal year. The department is also proposing to mark the next fiscal year as tax compliance year.

The department is planning to make it compulsory to have a Permanent Account Number (PAN) for professionals also. Earlier, persons engaged in business, partnership firms, companies and organizations engaged in commercial transactions who have to pay income tax or VAT had to obtain a PAN.

In order to widen the tax net and to control tax leakage, the department has proposed this new arrangement. Shanta Bahadur Shrestha, director general of the IRD, said, "By the next fiscal year, we´ve decided to make PAN compulsory for individuals who´re involved in commercial transactions."

According to the department, professionals like doctors, engineers, consultants, IT experts, lawyers, auditors, stock brokers and government employees will have to register themselves in the PAN by the next fiscal year. For this, the department is planning to come up with a web-based PAN card.

Shrestha said, "Without adding more taxpayers, revenue can´t be increased." In this fiscal year, the IRD has added 70,000 new

taxpayers.

In order to expand revenue administration, the department is also considering strengthening its structural setup. The department will be adding more Inland Revenue Offices (IROs) and service centres in the next fiscal year.

According to Shrestha, an organizational management survey is being carried out for the department which will advise on issues like how the new offices should be and where they need to be set up. The survey being done by Dr. Shree Krishna Shrestha will be made public by next week. At present, there are 22 IROs in the country including one large taxpayers´ office.

●Supply of agro products down, prices go up●

Posted on 2009-06-24
KATHMANDU: Due to prolonged drought and scorching sun for the last few weeks, supply of agro-products to the capital has decreased drastically for the last few weeks. With the decline in supply of vegetables, fruits, spices, fishes and other farm products, markets are also witnessing continued price rise of these products, according to traders.

Kalimati Fruits and Vegetables Market Development Board (KFVMDB) figures show that arrivals of agro-products nosedived to 498 tons on Tuesday from 513 tons a week ago. During normal season, total 650 tons of agro products would enter the Kalimati wholesale market every day.

Average daily arrivals of agro products in June last year were recorded at 508 tons.

Geeta Prasad Acharya, former president of vegetable whole-sellers in Kalimati market said ongoing drought in the major vegetable producing districts is the main reason behind the decline in arrivals of farm produces.

“The prices are going to rise further in coming days as vegetable seedlings have started dying due to blazing sun heat in some vegetables farms in the absence of irrigation facilities,” said Acharya.

At present, Bara, Parsa, Sarlahi, Chitwan, Dhading, Kavre, Nuwakot and Makawanpur districts are supplying fresh vegetables to the capital whereas India has been fulfilling onion demand in the Nepali market.

With the drop in supply, prices of some vegetables have slightly gone up. Wholesale prices of big tomatoes and red potatoes went up to Rs 30 per kg and Rs 26 per kg respectively on Tuesday from Rs 26 per kg and Rs 24 per kg respectively a month ago.

The price of cabbage sharply rose to Rs 40 per kg from Rs 30 per kg. Prices of carrots shot up to Rs 40 per kg from Rs 20 per kg while onion became a rupee pricier at Rs 20 per kg.

However, price of small tomatoes and white potatoes have come down to Rs 26 per kg and Rs 21 per kg respectively from Rs 36 per kg and Rs 22 per kg.

Similarly, some of the popular fruits also become dearer over one month. Prices of apple and papaya rose sharply to Rs 130 per kg and Rs 40 per kg respectively from Rs 85 per kg and Rs 22 per kg a month ago.

●NRB to move ahead with NDB liquidation●

Posted on 2009-06-24
KATHMANDU: Nepal Rastra Bank (NRB) has decided to move ahead with the liquidation of the troubled Nepal Development Bank (NDB).

A meeting of board members of NRB decided to move Appellate Court, seeking its approval for the liquidation of the bank, after the board members concluded that the bank´s clarification were not convincing on Monday, when the fifteen days´ time given to the troubled bank management to clarify why the bank should not be liquidated ended.

The NDB management, in response, had argued that it will recover non-banking assets within 3 months and recapitalize through rights issue. However, a source said that the central bank board members did not buy those arguments because its management had consistently failed to recover assets since the past one-and-a-half years and its rights issue was also undersubscribed.

"We have decided to move ahead with the liquidation process, and will soon lodge application at the Appellate Court, as per the existing laws," the source told Republica. The source elaborated that the court can explore the possibilities of the revival of the bank. However, given the financial status and its failed revival efforts, the court will most likely endorse NRB decision.

Monday´s board decision has made clear that shareholders and institutional depositors of NDB would most likely lose the money they put in the bank. Two institutional depositors -- Employees Provident Fund (EPF) and Nepal Army Welfare Fund -- have deposits of Rs 330 million and Rs 200 million, respectively, in NDB. Shareholders, who hold more than Rs 100 million worth of shares of the bank, too are exposed to risk of losing their money.

The central bank has said cash deposited by small depositors, however, will be recovered. It has also announced that shareholders will get money -- totaling to some Rs 80 million -- they put in recently for its rights shares.

NRB on June 2 had decided to send the long-troubled Nepal Development Bank into liquidation after concluding that all its five-year effort to revive the bank failed owing to incompetent and defiant management.

The central bank has frozen all the transactions of the bank, including accounts maintained by the NDB in other financial institutions until the appointment of a liquidator.

After conducting the investigation for more than a week, the central bank last week had once again concluded that there was no alternative to liquidating NDB.

The conclusion was drawn after its investigation revealed that the troubled bank´s cumulative loss had amounted to Rs 690.2 million, as against Rs 640 million claimed by the management; and its non-performing loans stood at 55.09 percent of the loan portfolio.

The central bank also found that NDB was maintaining a negative capital adequacy of 48.31 percent as against 11 percent provisioned by NRB.

The bank had deposits of more than Rs 720 million.

●Handicraft exports soar despite global slump●

Posted on 2009-06-24
KATHMANDU: Despite the worldwide recession, Nepal´s handicraft exports have been able to maintain double-digit growth. During the first 11 months of the current fiscal year, exports rose 28 percent to Rs. 2.7 billion from Rs. 2.3 billion during the same period last year.

Most of the exports consisted of pashmina, woollen goods, silver jewelry, metal crafts and handmade paper.

According to the Federation of Handicraft Associations of Nepal (FHAN), pashmina accoun- ted for 23 percent of the total exports. Similarly, woollen goods made up 15 percent, silver jewelry 9 percent, metal crafts 12 percent and handmade paper 12 percent of the exports.

Among textiles, pashmina exports surged by 21 percent to Rs. 632 million. Dhaka products witnessed a growth of 69 percent with exports worth Rs. 2.7 million. Similarly, woollen goods and felt products rose by 29 percent and 49 percent to Rs. 407 million and Rs. 235 million.

Exports of beads, stone crafts and ceramic products also soared by 102 percent, 58 percent and 39 percent respectively. Bamboo products and metal crafts, however, declined by 31 percent and 4 percent respectively.

FHAN president Pushkar Man Shakya said that the export of handicraft goods was satisfactory as compared to other products. He added that handicraft exports would have been greater if it weren´t for the global meltdown.

"As our goods are comparatively cheaper and are of good quality, I do not expect the recession to affect exports in the future," said Kush Kumar Joshi, president of the Federation of Nepalese Chambers of Commerce and Industry. He also stressed the need to improve the packaging and casing systems of Nepalese handicraft goods. Nepal´s handmade products are exported to more than 80 countries with the U.S.A., Germany, Japan, the U.K., France, Canada, Italy, Switzerland, the Netherlands and Australia being the main buyers.

●Oldest rosin industry closed●

Posted on 2009-06-23
NEPALGUNJ: Laxmi Rosin and Turpentine Industry (LRTI), the first rosin industry of Nepal, closed down on Sunday. The management had laid off about 250 labourers on Saturday.

The industry was shut down after it was unable to compete in the local market and obtain raw materials.

"We were forced to close down the industry because there was no raw material available," said Hom Pandey, manager of the industry. The Forest Ministry did not renew the old agreement or create a market to compete for the industry, he added.

Ganga Rosin Industry, Khanal Rosin Industry and Baglamukhi Rosin Industry are also close to being shut down.

LRTI was the biggest producer of rosin in the entire western region of Nepal. The industry had been exporting more than 4,000 tons of rosin to India every year and used to pay more than Rs. 15 million in taxes.

The government had increased the export duty on rosin by 100 percent to Rs. 6 per kg.

Pandey appealed to the government to introduce policies which are beneficial to domestic industries and can encourage them to produce more.

●Govt to reimburse banks this year●

Posted on 2009-06-23
KATHMANDU: The government is planning to pay within this fiscal year all the money it owes to government-owned banks for getting them to write off loans adding up to Rs. 5.1 billion taken by farmers and small entrepreneurs.

The government had announced through the budget speech this year that both principal and interest of loans of up to Rs. 30,000 would be waived. Likewise, it has also been announced that the interest and fines of loans of up to Rs. 100,000 would be cancelled.

Although the government had planned to compensate the banks within 10 years, it has decided to pay them this year, said a senior official of the Finance Ministry. "We will decide this issue within this week," the official added.

The government has allocated Rs. 400 million to repay the banks. They include Agricultural Development Bank, Rastriya Banijya Bank and Nepal Bank. They have waived loans amounting to Rs. 5.1 billion as per the government´s write-off plan.

The government still has around Rs. 18 billion reserved in the national treasury as it failed to spend the budget on development activities.

The government has been able to spend just Rs. 33 billion in cash and around Rs. 10 billion in commodities and direct grants for development purposes as of mid-June. The government has allocated Rs. 92 billion for capital expenditure.

Earlier, the banks had requested the government to pay all the outstanding dues to them given the government´s failure to spend the money.

The Agricultural Development Bank had written off the largest amount in such loans which stands at Rs. 4.17 billion, according to its CEO Janak Shah. "We have already sent all the details about the write-off to the ministry," he said.

He expected that with the payment from the government, the bank would be able to maintain its liquidity in a good condition.

Likewise, the Rastriya Banijya Bank and Nepal Bank have written off loans adding up to Rs. 650 million and Rs. 270 million respectively, according to officials of the two banks.

●Robust tomato variety getting popular●

Posted on 2009-06-23
KATHMANDU:Dr Kedar Budhathoki, a agricultural scientist, had never thought that his contact with Shrijana Upadhya, a research fellow from Himachal Agriculture University of India, would bring a remarkable change in his research career.

Shrijana left for further study to the USA few years ago, but her name has stayed on, becoming popular among Nepali tomato growing farmers, seed traders and most importantly among seed developing scientists.

Budhathoki, the then chief of Horticulture Research Division at Nepal Agriculture Research Council (NARC) in 2001, developed the first ever hybrid tomato seeds with the help from Shrijana, who provided some bacteria wilt-resistant hybrid lines of tomatoes from Himanchal.

Budhathoki cross-bred between HRD1--a small fruit giving, short plant and bacteria-wilt resistant breed--with HRD 17--a big fruit giving, tall bacteria resistant plant--to develop ´Shrijana´ (F1 hybrid).

"It took more than six years of rigorous research to develop the hybrid--Shrijana--as a bacteria-wilt resistant and high-yielding variety," said Budhathoki.

The variety is popular among more than 3,500 Nepali farmers across the country. That is not all. It has begun penetrating the Indian and Bhutanese markets. "We have received encouraging response from farmers of Sikkim and Bhutan where we sent 5kg and a 500 grams of seeds from this year," said Budhathoki. ´Shrijana´ seed is selling for Rs 110,000 per kg in the Nepali market.

Budhathoki is now leading a team of technicians for the commercial production of ´Shrijana´ at a farm of Gorkha Seeds Company--a commercial seed producer--at Nakhkhu, Lalitpur.

Bishnu Marahaththha, proprietor of Gorkha Seeds and Agro Traders--an authorized dealer and marketer, said that sales of ´Shrijana´ rose to 35 kg this year from 27 kg last year.

"We have targeted to sell 50 kg through next year," said Marahaththa.

"We have also received purchase orders for ´Shrijana´ from Bangladesh," said Budhathoki, who is heading for Bangladesh next week for marketing and training the Bangladeshi farmers and agriculture technicians about the techniques of tomato farming.
According to Budhathoki, Shrijana can be produced throughout the year in any climate across the country.
It is not only all-season breed, but is fully resistant to bacteria-wilt as well as moisture during rainy season.
Budhathoki claimed that Shrijana can give a yield of 6 kg to 12 kg per plant depending on the techniques applied in farming. Khuma Arayal, who hails from Harineta- 4 of Gulmi, is one of the farmers benefiting from the ´Shrijana´ for the last one year.
"I have doubled the number of tomato plants to 13,000 this year from 6,000 last year as I saw more benefits in tomato farming with the rising price of tomatoes in the market," said Aryal who is farming tomatoes in more than 17 ropanies of leased land using plastic tunnel.

●Developing countries´ GDP to slow to 1.2 percent: World Bank●

Posted on 2009-06-23
The World Bank on Monday estimated economic growth in developing countries of 1.2 percent this year, and said that without China and India, output would shrink 1.6 percent. Amid the worst global financial and economic crisis in seven decades, the multilateral institution eight days ago lowered its outlook on global growth, to a contraction of 3.0 percent this year.

Developing countries´ GDP to slow to 1.2 percent: World Bank

It slightly revised the global gross domestic product (GDP) figure Monday, to a 2.9 percent decline.

The development lender´s preceding forecast, published in late March, put developing countries´ annual growth at 2.1 percent, and at zero if China and India were excluded.

In 2010, global growth was projected at 2.0 percent, and that of the developing countries at 4.4 percent, according to the bank. Excluding China and India, the developing countries would grow 2.5 percent.

China´s economy was forecast to expand 7.2 percent in 2009 and 7.7 percent in 2010, while India´s forecast was for 5.1 percent followed by 8.0 percent.

The latest World Bank forecasts on gross domestic product (GDP) -- a measure of goods and services output in a country -- came in a report, "Global Development Finance 2009: Charting a Global Recovery," published to coincide with a three-day Annual Bank Conference on Development Economics opening Monday in Seoul.

The World Bank expressed concern about the thinning flow of private capital into developing countries, which has fallen nearly by half this year -- 49 percent -- to 363 billion dollars compared with 707 billion in 2008, after a record 1.2 trillion in 2007.

The development lender also projected a 9.7 decline in global trade volume this year, before a 3.8 percent growth rebound in 2010.

"The need to restructure the banking system, combined with emerging limits to expansionary policies in high-income countries, will prevent a global rebound from gaining traction," Justin Lin, World Bank chief economist, said in a statement.

The anti-poverty bank called for "special attention" to "the risk of balance-of-payments crises and corporate debt restructurings in many countries," in order to "avoid another debt crisis as seen in the 1970s and 1980s."

That was particularly the case in the hard-hit developing countries in Europe and Central Asia, where GDP was projected to fall 4.7 percent this year, before a slight recovery to 1.6 percent growth in 2010.

A similar pattern of decline and rebound was seen for Latin America and the Caribbean, where a 2.2 percent GDP contraction in 2009 would be followed by a 2.0 percent expansion the next year.

Other regions of the developing world continued to show growth but no contraction. In East Asia and Pacific, GDP was expected to rise 5.0 percent in 2009 and 6.6 percent in 2010, while South Asia would expand 4.6 percent, followed by 7.0 percent.

GDP in the Middle East and North Africa was expected to rise 3.1 percent in 2009 and 3.8 percent in 2010.

Sub-Saharan Africa would expand 1.0 percent, then accelerate to a 3.7 percent pace next year.

The relative economic weakness in the developing countries after recent years of robust growth heightens the risks of social unrest and deepening poverty, the 185-nation institution said.

●Govt to extend reach of tax office in hills●

Posted on 2009-06-18
KATHMANDU: The government is mulling the addition of new Inland Revenue Offices (IROs) in a bid to extend the reach of the revenue administration and tighten the net against possible tax evaders.

It is also planning to pursue government-to-government transfer of revenue, establishing operational tie-ups between revenue offices and branch offices of the Office of Financial Comptroller in places where tax offices cannot be set up, in a bid to enable taxpayers to pay their dues to the state at the local level.

“A special task force has currently been assigned to study the present shortcomings and recommend places where new offices need to be set up and ways to better serve the taxpayer, chalking out a clear-cut execution plan,” said Shanta Bahadur Shrestha, director general of the Inland Revenue Department (IRD).

The government will initiate the process of revamping the existing setup and introduce reforms within the structure once the task force submits its report, he told myrepublica.com.

The new initiatives have been taken after a study by IRD showed that sparse presence of revenue offices has affected revenue collection outside Kathmandu Valley and prevented the department from tightening the net against tax evaders.

“Most importantly, it has created serious hassles for taxpayers, as they need to travel far, sometimes over days, to pay their taxes,” said Shrestha. This is believed to have discouraged many taxpayers from complying with the tax laws.

Presently, there is one large Taxpayers´ Office in Kathmandu and 21 IRO offices across the country. Of the total IROs, five are in the Valley alone. The majority of the 14 zones have just one revenue office to cater to the needs of taxpayers. As almost all the offices are based along the Tarai region, businessmen from the hills and mountain areas need to travel for days to clear their dues.

For instance, taxpayers in Solukhumbu, one of the tourism hot spots, need to pay their taxes at the IRO office in Udayapur, and for doing so they either need to travel on foot and by bus for a couple of days, or fly to Kathmandu and then travel on to Udayapur, which again takes an additional day.

“There is a glaring need to expand the reach of the tax office in different parts of the country,” said Shrestha.

However, as setting up offices in all the districts would not be possible for now, the government is planning to delegate revenue collection authority to existing local offices such as branch offices of the Office of Financial Comptroller (OFC).

Going by the IRD´s proposal, this mechanism for collection and transfer, termed government-to-government transfer, will be arranged mainly in the hill and mountain districts.
“We will decide on the offices for local tie-up, areas for setting new IRO offices and recruitment of additional manpower on the basis of the recommendations that the task force will make,” said Shrestha. Presently, the IRD and IRO have a staff of about 1,000.

●NARC to launch farm support drive●

Posted on 2009-06-18
KATHMANDU: The Nepal Agriculture Research Council (NARC) is gearing up to launch an agriculture village model programme ´Scientists with the Farmers´ in the coming fiscal year.
Bhola Man Singh Basnet, chief agronomist at the NARC, said the innovative farmer-oriented drive aims to involve scientists and farmers across the country to share expertise.

The scientists will interact with farmers of specific regions separately, encouraging the latter to apply efficient technologies and opt for agro-biodiversity (crops, livestock and fish).

The agronomist said the scientists will be mobilised at Tarahara in Sunsari district for the eastern region, Parwanipur for the central region, Lumle for the western region and Khajura in Banke district for mid-western and far-western regions.

This programme will enable farmers to interact directly with agricultural scientists, say NARC officials.

The programme will identify the crops, livestock and fisheries for the specific regions and promote them.

For instance, NARC will extensively promote Rara-12, a rice variety, in the eastern region, Basnet said.

The programme also aims to raise awareness on NARC´s improved crop varieties and encourage the farmers to use the improved seeds for better production.

The research council has released 221 improved varieties of 44 crops in 48 years. Farmers have been using old improved seeds for over a decade, Basnet said, suggesting the use of newly-released batches of improved seeds.

Among others, the scientists teams will comprise crop experts, irrigation and manure experts.
´We want to reach out to the farmers to show we can utilise our scientific knowledge on the field for better crop yield,´´ said Basnet.

●NT to call tender for system upgrade●

Posted on 2009-06-18
KATHMANDU: Nepal Telecom (NT) is going to issue a tender notice soon, calling interested parties to submit their bids to upgrade its fixed line system into next generation network (NGN). The conversion is expected to enable customers to enjoy high-speed internet connection through the existing fixed phone lines that they have at home.

Basically, NGN is the convergence of two networks, namely the public switched telephone network (PSTN) and the data network also known as the Internet. This, thus, makes NGN capable of transporting all information and services like voice, data and videos from a single platform. Once the existing traditional network is upgraded, customers who now have PSTN lines at home can make calls, sit down for online video conferences and perform everything on the Internet, including watch television and play online games, using the same connection.

NT is currently using the PSTN network to provide voice service. Lately, the same network is also being used to provide ADSL service in which data are being transferred at a speed of up to 256kbps. But once the system is upgraded to NGN, customers will have access to very high-speed internet connection. On top of that, the new network is also expected to reduce NT´s cost of operating PSTN system by up to 30 percent.

"The work of upgrading the network will begin as soon as we select the bidder. We hope to start it in the next fiscal year," an NT source told Republica, adding that the work will begin simultaneously in all 73 districts where the NT has fixed-line network.

To begin with, NT will lay optical fibers all over the places where fixed phone lines are operating. These additional lines will provide support to the existing copper wires laid by NT and widen the paths through which data and voice travel.

In addition, new remote switching units will also be established at closer proximities to avoid chances of congestion in the network. Remote switching units link customers´ phone lines to service providers´ network. Each of these switching units can cover a radial distance of 6.2 kilometers. But to ensure that customers get seamless service, NT is planning to establish these units at closer distances so that data and voice do not get corrupt.

●EBL begins branchless banking●

Posted on 2009-06-18
KATHMANDU: In a first in Nepal´s banking history, Everest Bank on Wednesday launched a branchless banking service.

Its Everest Ghar-Dailo Banking Sewa brings modern banking services to the doorsteps of the rural populace who have no access to banks.

Nepal Rastra Bank (NRB) had introduced a regulation a few days ago allowing commercial banks and national-level development banks to operate branchless banking service.

Initially, the Bank will offer the new service in Baglung and then expand to Bhaktapur in the valley and Nepalgunj in the Tarai.

"With the experience gained in these places at the initial phase, we will be extending the service to all our branches within three months," said B.K. Shrestha, chairman of the bank. According to R.K. Ummat, chief operating officer of the bank, there is no limitation on the amount needed to open an account. Account holders will be provided a free special smart card which will contain all the information related to the account along with their finger prints.

The bank will appoint an authorized representative called Business Correspondent (BC) in selected villages to operate the branchless banking. These BCs, with the help of a Point of Transaction (POT) machine and the account holder´s smart card, will carry out banking transactions like deposit, withdrawal, fund transfer and remittance.

The POT machines will be connected to their respective branches via a telephone line at the end of the day to transfer data of the day´s transactions. "Villagers having an the bank account can also have money sent to them by their family member in foreign countries," said Ummat. According to Ummat, the POT machine allows account holders to withdraw or transfer funds after identifying one of their 10 finger prints.

Everest Bank has introduced this modern banking technology after reaching an agreement with India´s FINO Company. The system has been successfully used in many countries including in India by Punjab National Bank and other major banks.

●NCC Bank hands over insurance sum NLIC opens City Center●

Posted on 2009-06-18
KATHMANDU: NCC Bank hands over insurance sum NLIC opens City Center

KATHMANDU: Nepal Credit and Commerce (NCC) Bank handed over Rs 431,776 as accident benefit to the family of Nanda Kumar Manadhar, who was a account holder at the bank and passed away in an accident in India. Resident of Panauti Municipality-7, Manandhar died when a bus he traveled in met with an accident while returning from pilgrimage of Indian religious sites.

City Center

Ramesh Raj Aryal, chief operation officer of the bank, and Nirmal Manandhar, general manager of NB Insurance, jointly handed over a check to the family at the bank´s Banepa branch office. The bank provided the amount under the free accident insurance scheme it has offered to its saving account holders.

The bank has already settled accident insurance amount of Rs 1.1 million to the families of five deceased account holders, besides providing Rs 903,221 to 128 individuals as treatment expenses.

NLIC opens City Center

KATHMANDU, June 17: Nepal Life Insurance Company (NLIC) on Wednesday commenced operation of NLIC City Center, a commercial mall built by the company at Kamalpokhari. Chairman of Insurance Board Dr Fatte Bahadur KC inaugurated the mall amid a function.

The mall of international standard has 125 showrooms and retail outlets of popular international branded commodities, says a press release. It also houses 15 restaurants and offers separate playing areas for children.

Speaking on the occasion, senior officials of NLIC said that the company would develop more commercial complexes in the city with due permission of the Insurance Board for generating sound returns for its policy-holders and investors. The company says such projects would also contribute to consumerism, tourism and employment creations.

NLIC presently has 210,000 clients that have bought its insurance policy. Its shareholders also number at 10,000. The company has also set a target to sell 75,000 insurance policies in the next fiscal year, according to the release.

●Oil import prices rise Govt refuses to adjust retail rates●

Posted on 2009-06-17
KATHMANDU: Import prices of petrol and diesel have inched up, shrinking the profit margin of Nepal Oil Corporation (NOC) and hence its loan repayment capacity, the latter by Rs 315.50 million for June. However, this is not going to impact consumers, as the government has refused the corporation´s proposal to adjust retail prices, fearing political resistance and consumers´ ire.

Under the new import rates received on Tuesday, the corporation´s profit margin on petrol has dropped to Rs 6 a liter, or nine rupees less than what it needs to be able to repay loans. In the case of diesel, NOC has suffered a net loss of about Rs 1 a liter, whereas for meeting its loan repayment schedule, the corporation was required to post a profit margin of Rs 6.5 a liter.

“The new pricing has lowered our profit margin to Rs 184.50 million a month,” said NOC spokesperson Mukunda Dhungel. To keep up with its loan repayment schedule, the corporation needs a profit of Rs 500 million a month.

NOC had Rs 15.96 billion in loans till eight months ago, taken for financing imports as it went bankrupt after crude prices skyrocketed and the government refused to adjust domestic rates in line with international trends over the last four years.

But when prices receded, the government endorsed NOC´s repayment plan, which set a target of clearing loans in 30 months through profit-taking of Rs 500 million a month. Profit-taking was to be maintained by not lowering retail prices even though crude dropped as low as US$ 38 a barrel.

“Unfortunately, crude prices have caught a rising trend yet again and threaten to jeopardize our payment schedule,” said Dhungel to myrepublica.com, adding that the corporation would surely miss the payment timeline unless the government gave a nod on time for local price adjustments.

Close on the heels of rising crude prices, the Indian government this week hinted at an oil price hike. However, the newly formed government here has argued that the time is not appropriate for adjusting oil prices.

Sources said NOC did seek consent for a price adjustment, but the government turned it down.

With profits reaped by fixing domestic prices at a higher level, the corporation has managed to lower its loan liability to Rs 11.19 billion as of mid-June 2009.

Of the total outstanding loans, NOC presently owes Rs 8.01 billion to the government, Rs 986 million to the Citizens Investment Trust (CIT) and Rs 2.20 billion to the Employees Provident Fund (EPF).

●Slash corporate tax, CGT: FNCCI●

Posted on 2009-06-17
KATHMANDU: The Federation of Nepalese Chambers of Commerce and Industry (FNCCI) has asked the government to slash corporate taxes to 20 percent from the present 25 percent in the upcoming budget for Fiscal year 2009/10.

Making presentations on the private sector´s recommendations to Finance Minister Surendra Pandey, FNCCI officials Tuesday also appealed for a waiver on income tax for exports and cottage industries, and reduction of capital gains tax (CGT) to 10 percent from the present 15 percent.

"These measures are very necessary for promoting smaller industries and giving investors a boost," Pradeep Man Vaidya, chairperson of FNCCI´s Tax and Revenue Committee, said.

Interestingly, the apex business body also asked the government to raise the tax exemption ceiling for an individual to Rs 160,000, and for householders to Rs 200,000.

Citing rigid labor laws as a big hurdle in industrial operations, the private sector demanded that the government grant them flexibility over lay-offs and incorporate a ´no-work, no-pay´ provision in the new budget.

"The new budget should focus on investment promotion and incorporate measures that do away with existing problems such as political instability, labor rigidity and policy ambiguity, among others," Vaidya said.

FNCCI President Kush Kumar Joshi urged the government to either ban bandas and chakka jams or make provisions in the next budget for compensating industry for the losses they suffer from such closures.

He also asked the government not to enforce a new tax policy until the new constitution comes into force.

FNCCI in the main asked the government not to impose a property tax, as announced by the Maoist-led government, through the present budgetary program. But it suggested the government continue youth self-employment programs, saying that their effective implementation could help in creating employment, managing conflict and supporting the peace process.

Joshi tagged the power crisis the most critical problem the industrial sector is facing. And pointing out that there is no indication of this problem being solved soon, he requested the government to pledge concessions to promote solar and wind energy, among others.

FNCCI has also demanded that the government formulate an Employers´ Act in order to protect the rights and interests of investors.

While making suggestions on numerous taxation and infrastructure-related issues, the apex business body also demanded the government prioritize the industrial sector and devise policies accordingly for supporting its development.

The paper presented Tuesday suggests to the government to declare hydropower, limestone and cement, biodiversity, agro-industry complexes, animal husbandry, mountaineering and forest-based and herbs-processing industries, among others, as priority sectors.

●10pc less Nepali workers leavin●

Posted on 2009-06-17
KATHMANDU: The number of Nepalese migrant workers leaving for foreign destinations during the first 11 months of the current fiscal year is down from last year.

There were 197,347 departures to 50 countries worldwide during the period, a drop of 10.07 percent from 219,458 previously.

However, the number of jobseekers going to foreign lands through personal contact surged by 234.99 percent to 40,658 individuals during the same period. Departures last year numbered 12,637.

Mohan Krishna Sapkota, director general of the Department of Foreign Employment (DoFE), said that the trend of finding employment through personal contact had increased due to fear among manpower agencies caused by the global recession.

“They are afraid of sending fresh workers, and entertain only genuine demands from foreign employers," said Sapkota.

A manpower agency, requesting not to be identified, said that it was easy to get personal approval from the DoFE to leave the country for foreign employment. "If you are going through a manpower agency, there is a lot of red tape," he added.

Tilak Ranabhat, president of the Association of Foreign Employment Agencies, said that the practice of obtaining government approval through an agent was increasing.

According to the DoFE, Qatar, Saudi Arabia, Malaysia, the United Arab Emirates, and Bahrain are the top five countries to absorb Nepalese workers during the period.

Qatar took in 68,844 individuals, Saudi Arabia received 44,741 individuals and Malaysia received 31,157 individuals during the period. Similarly, the United Arab Emirates and Bahrain provided jobs to 28,607 and 6,102 individuals respectively.

Malaysia, which is one of the major labour markets for Nepalese workers, had hired 45,697 persons last year during the same period. The number of Nepalese going to work in Malaysia started declining in mid-August 2008 due to falling demand.

In January 2009, the DoFE stopped issuing work permits to fresh workers after the Malaysian government announced that it would stop recruiting foreign workers citing the worldwide financial crisis.

According to Sapkota, the government is sending Nepalese jobseekers to work in other sectors in Malaysia besides textiles, electrical and manufacturing.

"Malaysia is employing less foreign workers than before in sectors which Nepalese jobseekers traditionally joined because of the recession," he added.

●Probe license to Koshi Petrochemicals: Dealers●

Posted on 2009-06-17
BIRATNAGAR: Nepal Petroleum Dealers Association, Koshi, has accused the Ministry of Industry (MoI) of flouting the law while granting a license to Koshi Petrochemicals for producing diesel and demanded that the government investigate the matter.

“How could the ministry grant a license for crude imports and production of petroleum products in the country without formulating appropriate laws and policy? We smell a rat in the deal,” said Mukunda Neupane, general secretary of the association in the region.

The dealers, who are affiliated to Nepal Oil Corporation (NOC), have also demanded that the government test the quality of diesel Koshi Petrochemicals is supplying to industrial plants.

“The state must ascertain that its product matches the standard product specification for diesel,” Neupane told myrepublica.com.

They have also threatened to launch a strike if the government does not fulfill their demand for investigations within 15 days.

Dealers mainly flayed the MoI step after the company started fixed the price of its diesel Rs 1 cheaper per liter than that supplied by NOC.

Koshi Petrochemicals is based in Nemuwa of Morang district and had received a license from DOI on May 20, 2009, securing permission to import crude oil and produce diesel, furnace oil and mineral turpentine oil in the country.

Interestingly, the company started selling diesel from May 22, just two days after getting its license.

“This whole saga appears sinister. Hence, we want a deeper investigation of the case,” said Neupane.

The company, on the other hand, says it is sourcing crude from the Gulf countries. “We are presently producing 30,000 liters of diesel and refining the crude at our own refinery,” said Subodh Koirala, promoter of the company.

●Access to improved seeds nominal in hill districts●

Posted on 2009-06-17
KATHMANDU: Hill and mountain districts are still lacking access to improved seeds of cereal crops, despite efforts made by the government and private sector to boost their production and distribution.

Officials said: due to meager production of improved seeds and poor distribution network in the country, farmers are heavily dependent on traditional ways of producing seeds.

"Farmers of hill and mountain districts are using the same breeds for decades due to non-availability of improved seeds. We have found that seeds replacement rate in those areas is as low as four percent," said Dr Hari Dahal, spokesperson of the Ministry of Co-operatives (MoAC). Agriculture scientists said the use of same breeds of seeds for a long time deteriorates the productivity of crops.

Nepal needs 185,000 tons of seeds of paddy, wheat, maize, millet and barley every year. And most of the seeds are produced by farmers themselves.

National Seeds Company -- a government-owned company -- had produced only 3,809 tons of seeds last year, which is two percent of the national requirement. Hill and mountain districts, which cover more than 50 percent of the country´s arable land, received only 13 percent of total seeds distributed by the company.

Nepal Agriculture Research Council and some private companies are producing and distributing seeds. However, there is no authentic data on the production of improved seeds across the country.

As per the production area, hill and mountain districts need 28 percent of total paddy seeds requirement of the country. However, currently, only seven percent of the country´s total paddy seeds requirement, reach those areas. Similarly, in the case of wheat and maize seeds, only seven percent of the total requirement of the country reach those areas.

"Subsidy in seeds distribution can play a catalytic role in increasing the access of farmers to improved seeds. We have to gradually increase replacement rate of seeds by at least 5 percent annually with the joint effort of the government and private sectors." Agriculture Perspective Plan (APP) has emphasized on production and distribution of quality seeds.

●Future of seven wildlife resorts uncertain ●
Posted on 2009-06-16
CHITWAN: The future of over a half a dozen resorts inside Chitwan National Park (CNP) remains uncertain because the government has not come up with a decision regarding the extending of their leases, which expires on July 15.

The government was widely criticized in 1994 when all resorts inside the park got their leases extended by 15 years, and thus, park officials believe that the leases will not be extended this time. The resorts were and have been blamed for destroying the bio-diversity inside the park, which is a world-famous conservation site that´s listed in the UNESCO´s natural heritage list.

“It is highly possible that with the termination of the lease contracts, all hotels operating inside the park will be closed from July 15,” said Dr Narendra Man Babu Pradhan, chief warden of CNP. “Cases have been filed against the hotels, at the Commission for Investigation of Abuse of Authority (CIAA). Since these cases will not get finalized immediately, we may have to shut down the hotels immediately after the contract period expires.”

It´s not just environmental issues that are dogging the hotels. In the cases that have been filed against the hotels, the hotels have been charged with intentionally delaying the payment of their lease amounts and royalties to the CNP.

A committee led by the joint secretary of the Ministry of Forest, and comprising officials from Nepal Tourism Board and the Department of National Park and Wildlife Conservation (DNPWC), has been formed to report to the ministry the details outlining whether the lease period for operating resorts should be extended or not.

“We have asked the committee to phase out the hotels, giving the hotel-owners a maximum period of 18 months for relocating from the park,” said Hari Bhakta Ghimire, president of the Regional Hotel Association of Sauraha. Seven big resorts--Tiger Tops Jungle Lodge (the first resort built in Nepal), Machan Wildlife Camp, Chitwan Jungle Lodge, Gaida Wildlife Camp, Island Jungle Resort, Hotel Narayani Safari and Temple Tiger--will have to vacate the existing camp sites after one month if the government doesn´t extend their leases.

However, an official at the DNPWC said some senior officials are secretly lobbying for not only extending the terms of the existing contracts but for also granting licenses for new resorts inside the park. It´s easy to see why the resorts would like to continue business inside the park. The resorts enjoy exclusive benefits: they get to operate inside the park such services as elephant-rides using their own elephants, jungle drives and jungle walks. In return for using the park, the hotels pay to the government about nine million rupees every year for the land they have taken on lease, and they also pay a conservation tax.

●Animal husbandry, milk trading on rise in Gulmi ●
Posted on 2009-06-16
GULMI: The number of villagers interested for animal husbandry and milk trading has increased in the district after the provision of animal life insurance with support from the Asian Development Bank (ADB).
The District Livestock Service Office (DLSO) under the Livestock Insurance Partnership Programme had initiated the scheme A group involved in rearing water buffalos in Devisthan has already insured its 69 cows and buffalos.

The insurance scheme has received overwhelming response and the villagers´ demands for insurance of their livestock have crossed the insurance capacity of the committee formed to undertake the insurance. Therefore the committee has stopped providing the livestock insurance service. According to Bishnu Pokhrel, secretary of the committee, under the scheme farmers pay three percent annual premium on the basis of the evaluation carried out by the committee. If the insured livestock becomes unproductive farmer gets 75 percent of the value of the animal.

Similarly, in case of sudden death of the insured animal, farmers will be provided 80 percent of the total value as compensation.

Purna Prasad Pokhrel, president of the committee, said that they had collected the premium of Rs. 222,000 within a year of the scheme´s inception. Motivated by the insurance scheme farmers have started animal husbandry in a commercial way.

"It used to be hard to find milk in the village before. Now, farmers produce up to 200 litres of milk everyday," said Tulsi Ram Bhandari, chief of DLSO, Gulmi. He said that the farmers of the area have been encouraged more after the assurance from the office to set up a milk dairy in the locality.

According to Bhandari, the DLSO each year provides 50 percent of the total amount as a contribution for the development of milk dairies in livestock pocket areas. There are more than a thousand farmers involved in commercial animal husbandry. The milk produced by farmers is being sold to a local milk chilling centre in Gulmi. It is also exported to Sujal Dairy, Pokhara depending upon the Gulmi´s production and consumption.

●Vegetables find market in India●
Posted on 2009-06-16
DADELDHURA, June 16 - Kalu Singh Ter, a vegetable farmer was amazed to know that his vegetable was being sold in New Delhi, India too. Not only Ter, but all vegetable farmers of the village were also stunned to know about the export of their vegetable products to India.

Vegetables collected from the villages in the district headquarters are being exported to India via Dhangadi and Mahendra Nagar transits.

Anil Pawar, a vegetable trader from the Delhi had started to export the vegetable from the Dadeldhura last year. According to him, he used to sell vegetables to bordering cities of India initially but since last year, they are being exported directly to
New Delhi because it takes only five hours to New Delhi and price is also good there.
He said that he traded vegetable worth Indian Rs. 20 million ( Nepali Rs. 32 million) last year. He added that he was also exporting vegetables to India produced in various parts of the Terai.

Recalling the situation of the village, Bhuwan Shah, a vegetable farmer said that there was not even a single farmer involved in vegetable farming about eight years back and the villagers we had to visit other places to get vegetables for religious and traditional events. "Now, we produce sufficient vegetables and export as well," he added.

Shah said that since the villagers did not get good price in the village, he was planning to collect the vegetables from the village and send them to the Terai. Vegetables in Dadeldhura are sold in Kailali, Kanchanpur, Banke, Bardiya, Baitadi, Doti and Achham districts. Since last year vegetables have also been exported to Delhi. Tomatoes, cauliflower and potatoes are some of the major products that are being exported to India.
Meanwhile, in an effort to provide good prices for vegetables, the District Agriculture Development Office from this year has decided to set up vegetable collection centres in villages.

Rajendra Mishra, District Agriculture Development Officer said that they were under process to develop the vegetable business in the villages for the further expansion of the export market in bordering Indian cities such as Baereli, Delhi, Pilibhit, Lucknow, Muradabad, Rampur, Sitapur and Gola Gokarna via Kailali and Kanchanpur customs points.

According to Mishra, the rural road network connecting almost all villages had also attracted farmers to vegetable farming. He also said that the production of vegetables in the villages would increase this year.

●Three companies want to pay off their workers ●
KATHMANDU, June 15: Three big companies hit by financial setbacks, from across the nation, want to “pay off” their workers, that is, let them go after providing them with severance packages. The three companies, including a public company, have approached the government, seeking permission to carry out the pay offs.

Shyam KC a senior official at the Department of Labor (DoL) said that Butwal-based state-run Butwal Dhago Karkhana, (BDK) and two private companies-- Kohalpur-based Laxmi Rosin and Turpentine (LRT) and Parsa-based Shiva Shakti Aluminum (SSA) registered applications on June 7 with the DoL, as per Article 12 of the Company Act, 1991, to carry out the mass pay offs and to close company operations.

“All of those companies have cited financial reason for taking the steps. We are studying the documents submitted by those companies,” KC said. “But since the DoL is not an authority that can give permission for pay offs, we will forward the application to the MoLTM for the final permission.”

Before forwarding the application, the DoL will conduct a field study to assess the condition of the companies and see if the companies´ moves are justified.

According to a source, BDK has sought permission for paying off all its staff, by citing besides financial problems, the massive repair works the company has had to undertake for its plant and machinery. BDK has been employing around 600 staff. The company´s trade unions have agreed to the pay-off deal.

Similarly, LRT--which was in the business of collecting rosin from pine trees in Salyan, Rolpa and Surkhet districts, to produce rosin and turpentine, also stated financial problems as the reason for their shutting up shop. The company says that the problems emerged solely because of the shortage of raw materials; and that situation came about after the Ministry of Forest and Soil Conservation turned down its request to extend the contract period that expired at the end of April 2009. The company has turned in an application for paying off its 58 staff, among whom, 50 are permanent staff.

Shiva Shakti Aluminum, a producer of aluminum utensils, has sought to pay off a total of 37 staff, and wants to shut down the aluminum-extrusion section of the company; as with the others, it too is citing financial troubles as the reason for the measures it wants to take. The company started foundering because of the sharp decline in the exports of its products to India, the market on which it was entirely dependent. Its exports dried up because it could not compete with Indian companies after India, a couple of years ago, stopped levying customs duty on Indian companies that were importing raw aluminum. The company´s business has been so badly hit, that although the company produced 12,753 tons of aluminum products during the last six years, its sales stood at only 103 tons.

If the MoLTM gives the three companies the go-ahead to pay off their workers, it won´t be the first time that it´s given such approvals. Last March, the ministry had allowed Bayeran Electricals, of Chakupat Lalitpur, to pay off half of its 137 staff. And three months ago, the ministry had given a similar nod of approval to Momento Apparels, a leading garment producer and exporter, and to Biratnagar Jute Mills.

●Govt resumes actions against tax evaders●

Posted on 2009-06-14
KATHMANDU: The Inland Revenue Department (IRD), acting on a go-ahead from the new finance minister, has resumed the process of taking action against tax evaders who staunchly refused to disclose their property under the voluntary declaration of income sources (VDIS) scheme.

The finance minister had earlier indicated that the plan could be shelved, citing that it could deter the private sector´s confidence. However, he backtracked after he drew criticism from within his own party.

“Under the revived endeavor, we have seized the account books of a highly-probable tax evader on Wednesday, to investigate his property details and sources of income,” said Shanta Bahadur Shrestha, director general of IRD.

He asked myrepublica.com not to disclose the party´s name, given the sensitivity of the case, and elaborated that the investigation was in the final stage in another half a dozen cases of revenue dodging.

Officials at the Investigation Cell of the department authorized to swoop down on people who refuse to comply with the tax laws state that they have expedited the probing into 400 potential tax evaders.

The people shortlisted for scrutiny include those who were earlier asked by the department to use benefits the VDIS scheme provided but who did not comply with it. “The cell will swoop down on three other high-probable revenue dodgers soon,” stated the source.

As for the person whose property and financial details have been taken into control by the department, the cell officials said that they would establish his tax liability within a week and ask him to either prove that he has complied with the tax provisions or pay the tax and the fine within 15 days.

This final chance to prove his innocence is being given as per the Post-VDIS Action Manual that the former government led by the UCPN-Maoist had approved. If the person fails to prove his innocence, IRD will slap the tax on him and the fine, worth 60 percent of the property.

In order to start taking action against tax evaders, the IRD had sent letters to some 900 firms and individuals whom it tagged as probable tax evaders, seeking property details and tax-payment records from them two months ago. However, the changes in IRD´s leadership and the poor coordination in the department hobbled the investigation process, slowing down the IRD´s ability to take action.

The program further faced a setback after the change in government raised confusion over who in the new government owned the post-VDIS process. "All these factors culminated in the government´s not taking action against the guilty. If things had not changed, we would have already taken action for the investigations we started back then," said an official.

●Nepalis among 75 workers on strike in Bahrain●

Posted on 2009-06-14
KATHMANDU: Nepalis are among the 75 who are on strike protesting pay cuts in their company, reported Gulf Daily News (GDN) of Bahrain on Sunday.

GDN said Nepalis, Indians and Pakistanis from the Ma´ameer-based Abu Amer Equipment Hiring Company refused to get on buses that came to transport them to their work site on Saturday.

The workers accused the company of deducting money from their salaries to pay for machinery repairs and forcing them to do work that they are not supposed to.

The men, who receive a monthly salary ranging from Bahrain dinar 75 (198 USD; Rs 15000 approx) to BD100 (265 USD; Rs 20000 approx), also complained about not being paid their full wages if the company´s transportation dropped them at the work site late.

Their demands include a 20 per cent raise, salaries to be given at a fixed date every month and skilled or semi-skilled workers not to be forced to do the work of unskilled workers.

The protesters say the company should also provide medical facilities, timely transportation to and from work, not make machine operators responsible for any accidents during the course of duty, offer a return ticket home every two years and clear all dues at the time of leaving for vacation.

"The company is treating us very unfairly and always finding fault with our work just to deduct money from our already meagre salaries," said a workers´ spokesman, who didn´t want to be named.

Another worker told the GDN that the workers have submitted a list of demands to senior officials and will not return to work unless they are met.

"We always inform our problems to the company´s senior officials but no action is ever taken," he said.

A company spokesman said the strike was illegal as the workers had not informed the company or the Labor Ministry about it.

"We came to know about it and the list of demands only this morning," he said. "We are open for discussion and ready to address their issues and have asked them to come to the office in a group of five to 10. But they refuse this and say that they will all come together which is not possible."

●NEA delay irks IL&FS on PPA●

Posted on 2009-06-14
KATHMANDU: Infrastructure Leasing & Financial Services Limited (IL&FS), the Indian infrastructure development company entrusted with construction of a 140-km power transmission line (TL) in the Dhalkebar-Muzaffarpur corridor, has said that it will be forced to pull out if Nepal Electricity Authority (NEA) delays any further in taking a decision on the import of 250 MW from India.

Describing the situation as "highly critical", IL&FS has demanded that NEA move at a faster pace so that a Power Purchase Agreement (PPA) can be signed within a few days for power purchase at IRs 3.25 per unit for a period of 15 years. The TL is vital as it will also facilitate import of power by India from Nepal by 2012-13.

“The PPA is critical as it decides the necessity of the TL,” Anand Kumar Jha, country representative of IL&FS, said adding, “Timely decision is desired as the delay caused from NEA´s side is hindering the progress of the project.”

IL&FS is still awaiting an Environmental Impact Assessment (EIA) which it is said will be completed only in mid-August. The EIA has been pending for one and half years now.

Expressing dissatisfaction over the delay, Jha said it is true that both IL&FS and the Power Trading Corporation of India are becoming impatient. “NEA may never get the deal in such a low price in future. If decisions are not made now, NEA will lose out,” he said.

All this comes at a time when NEA is come under tremendous pressure from India.

Jha informed that IL&FS has completed the Detailed Project Report (DPR) and at present “structuring is taking place”, which involves financial closure, determining the equity ratio and other things.

NEA, on the other hand, has blamed IL&FS for its inability to generate funds for taking the project ahead and for setting conditions for the completion of the project. “IL&FS is having financial problems and is seeking a guarantee from NEA for completion of the project. This is unacceptable as NEA is not financially strong,” an NEA official told myrepublica.com.

The official added that all responsibility for generating funds had to be borne by IL&FS.

Jha, however, denied that his company is facing financial problems. “We have no financial constraints and the project is going on,” Jha said.

IL&FS is promoted by the Central Bank of India (CBI), the Housing Development Finance Corporation Limited (HDFC) and Unit Trust of India (UTI). Over the years, IL&FS has broad-based its shareholding and inducted institutional shareholders including State Bank of India, Life Insurance Corporation of India, ORIX Corporation -- Japan and Abu Dhabi Investment Authority.

The organization has focused on commercialization and development of infrastructure projects and creation of value added financial services.

●Green vehicles’ rally sees 30 participants Who drove the electric car?●

Posted on 2009-06-14
KATHMANDU: Nearly 30 electric vehicles — Reva cars, Safa tempos and two-wheelers — took part in a Spinal Injury Electric Vehicle rally that began at Maitighar Mandala and ended at Saanga near Banepa in Kavre district on Saturday morning.

The rally was organised to pressurise the government to formulate an environment-friendly policy to promote the use of the electric vehicles in the country. At the same time, the rally aims to generate funds to support patients at the Spinal Injury Rehabilitation Centre at Saanga.

Inaugurating the rally, popular artiste Madan Krishna Shrestha hoped that the rally would help create awareness about the preservation of environment by promoting eco-friendly electric vehicles.
The participants included individual owners of electric vehicles as well as organisations such as Intenational Center for the Integrated Mountain Development, GTZ, World Food Programme and the Norwegian and U.S. embassies. The umbrella organization, Electric Vehicles Association of Nepal (EVAN), also took part in the rally.

Dibya Man Sherchan, president of EVAN, said though the vehicles are environment friendly, the government has not given much priority to promote these vehicles compared to conventional fossil-fuel vehicles which are the major sources of environment pollution. He said the state should come up with a policy promoting the use of electric vehicles.
At present, there is an exemption on value-added tax for batteries and mechanical parts used by electric vehicles.

Meanwhile, Sherchan said that at a time when the government is planning to displace vehicles more than 20 years old, it is better to convert the vehicles to electric by assembling some parts. "Rather than investing a huge sum of money in providing compensation to the old vehicles and introducing newer vehicles, the government should restructure the old vehicles to electric ones," he said.

●ICT fair in Jawalakhel●

Posted on 2009-06-14
KATHMANDU: Five Information Communication and Technology (ICT) companies jointly organized a day-long Jawalakhel ICT Fair-cum-Free ICT Service Camp at the Jawalakhel Football Ground on Saturday.

Approximately 2,000 people visited the fair organized by Serviceman, a hardware and network service provider, Everest Net, an Internet Service Provider, Ishan Infosys, a leading hardware venture, Mac Support, an apple computer selling company and Microsoft Market Development Partner.

The fair was inaugurated by Minister Prakash Saran Mahat, who lauded the fair, adding that Nepal needed to develop itself as the service provider for ICT. Dr Suman Shakya, executive director of National Information Communication and Technology Center, and Rajan Raj Pant were also present on the occasion.

"We plan to organize one such event every month for a year," Subodh Rijal, the coordinator of the fair, told myrepublica.com. "Next month, a similar fair will be organized at the United World Trade Center, at Tripureshwar."

●Pros of structural steel highlighted●

Posted on 2009-06-14
KATHMANDU, June 13 - The Structural Engineers Association Nepal (SEANep) in association with Jagdamba Steels organised a one-day international seminar on structural steels for civil construction on Friday.
The seminar was aimed at disseminating information to structural and civil engineers and engineering students about structural steel as a new construction material. According to SEANep, the seminar will also share international experiences in the use of structural steel, its behavioural response under severe loads like earthquakes besides introducing Nepalese research on structural steel structures such as the Karnali and Rapti Bridge cases.

Suresh Regmi, president of SEANep, said since the number of high-rise buildings was increasing in the city, the time had come to think about alternative structural steel for efficient design.
"It is resalable, cheaper and removable. It has already become a necessity for our country," said Shahil Agrawal, managing director of Jagdamba Steels, which is part of the Shanker Group.
He said that the Jagdamba Steels had been producing structural steel for the last six months and was in the process of exporting it to India too.

● NAC to hire 27 more pilots●

Posted on 2009-06-12
KATHMANDU: Nepal Airlines Corporation (NAC), the national flag carrier, will soon be recruiting 16 more captains and 11 co-pilots to its team, because NAC will need more hands on deck if it goes ahead with its plans to add two new aircraft to its existing fleet. The formal process for getting the planes was initiated in April this year when the company floated a public tender notice inviting interested airplane manufacturers to submit bid documents. The bids are currently being screened by a technical team, which will also decide whether NAC should purchase Boeing or Airbus planes. “When we add these aircraft, we will need 24 additional pilots. And since we do not have reserve pilots in our team, we have no option other than to hire new ones,” KB Limbu, managing director of NAC, told myrepublica.com. NAC, which has two 757 Boeings and three Twin Otters, currently has around 70 pilots in its team. Of these, Limbu said, some of the pilots are leaving the company to join other airlines and around three are soon retiring. "We need to fill this vacuum,” he added. Limbu said that he had already forwarded to the board of directors the recommendation for recruiting new people. "We will start the hiring process soon after we get the approval," he said. Limbu said that the new recruits would be responsible for flying Twin Otters in various domestic sectors while those who were currently conducting flights in domestic sectors would get the opportunity to fly in the international sectors. According to Limbu, one of NAC´s big aircraft that flies international routes needs to have at least six captains and six co-pilots. “Although there are only two pilots in the cockpit, we need people on stand-by in case someone falls sick at the last minute or takes leave for personal or other reasons. Moreover, many pilots also have to go abroad for training and refresher courses, leaving us with a shortage of manpower,” he said.

● Additional Rs 100,000 each proposed for consumer cooperatives●

Posted on 2009-06-12
KATHMANDU: The Department of Cooperatives (DoC) wants the government to include a further Rs 100,000 in the upcoming budget for those consumer cooperatives that provide essential services to the poor at fair prices. These cooperatives, set up with government assistance, sell daily consumables and essential commodities such as pulses, rice, sugar, agricultural tools and their spare parts, fertilizers, seeds, communication and internet services, basic medicines and educational materials, among others. The DoC is a government agency that oversees the registration of cooperatives.

The government had earlier in its budget for the fiscal year 2008/9 announced that it would provide financial assistance to those consumer cooperatives set up with government assistance. To qualify for the assistance, the consumer cooperatives needed to be set up at the community level, in any of the 4,000 VDCs across the country. According to the government´s plan, one consumer cooperative per municipality was to be set up in municipalities that had a population of around 30,000.

“We have sent a proposal to the Ministry of Finance to provide the extra Rs 100,000 for those co-operatives that performed satisfactorily and provided good service to the local people,” Rajan Prasad Dawadi, under secretary at the DoC, told myrepublica.com. “The additional assistance will help to expand the capacities of those cooperatives doing well.”

But Dawadi also sounded a note of caution while he made his case. He said he was of the view that those cooperatives that were registered solely for the purpose of getting government assistance should be discouraged from carrying on with their activities.

24 districts sans consumer cooperatives

But despite the huge budget allocation, the plan to expand consumer-cooperatives to rural areas suffered a setback because 24 districts did not come up with a proposal to run the fair-price outlets.

The DoC stated that following districts did not submit any proposal: Shankhuwasabha, Bhojpur, Tehrathum, Solukhumbhu, Okhaldhunga, Udayapur, Mahottari, Rasuwa, Lamjung, Kaski, Manang, Arghakhanchi, Mustang, Salyan, Rukum, Mugu, Humla, Dolpa, Kalikot, Jajarkot, Dailekh, Doti and Darchula.

To encourage more districts to get on board the scheme, the government has already extended the deadline twice for those communities interested in submitting proposals.

“We did that because of the low turnout of locals; we have authorized district-level registration committees led by the Local Development Officers to extend deadline, as per the needs of the concerned districts,” said Gopikrishna Niraula, deputy registrar of the DoC.

Even among the proposals received, not all have fulfilled the required criteria. Thus, says the DoC, out of the total of 2,146 proposals it has received so far from different cooperatives, only 1,428 proposals have been approved.

Last year, cooperatives in 1,351 VDCs, out of the 3,912 in the country, and in 58 municipalities received Rs 100,000 each from the government´s budget; and the DoC has already approved the transferring of the necessary amounts to VDCs through the DoC´s offices in 38 districts and through the Department of Agriculture in those districts that don´t a DoC office. According to Niraula, the process of selecting cooperatives will continue till the second week of July.

● IME turns nine. Overseas traders demand new facilities●

Posted on 2009-06-12
KATHMANDU: International Money Express (IME), the first remittance company in Nepal and one of the largest as well, completed eight years of operation on Thursday.

In the last eight years, the company has expanded its network to more than 475 places in urban and rural parts of the country, states a press release issued by the company on Wednesday.

It has also been helping Nepalis working in countries such as Malaysia, Saudi Arabia, Qatar, Bahrain, the UK, Israel, Brunei, Singapore, Oman, Australia, South Korea, the US to send money to Nepal.


Overseas traders demand new facilities

KATHMANDU, June 11: Businessmen who work in the foreign-trade sector have demanded that Nepal Rastra Bank (NRB) pledge to them a credit card facility of up to US$ 10,000 on the basis of tax they pay to the government.

The demand was made on Thursday, when a delegation of the Nepal Foreign Trade Association (NFTA) met with the governor of NRB, Deependra Bahadur Kshetry.

On the occasion, the delegation handed over to the governor a memorandum that seeks various facilities in next year´s monetary policy for the foreign traders. Among other facilities, the foreign traders have also asked NRB to allow them to make payments in convertible currencies while importing goods from India and to also increase the period of Trust Receipt Loan, to 180 days from the present 90 days.

Responding to the delegation, Governor Kshetry said that he would consider the association´s demands while formulating the new policy.


Share trading of BoA, CBI begins

KATHMANDU, June 11: The trading of ordinary shares of Citizen Bank International (CBI) and Bank of Asia (BoA)-Nepal started in the Nepal Stock Exchange (NEPSE) from Thursday. The NEPSE--the sole secondary market in the country--had listed the shares of both commercial banks for trading a few days ago.

During the first day, a total of 5,870 units of shares of BoA, worth Rs 2.86 million, were traded through 76 transactions.

The BoA´s share price settled at Rs 474 per unit at the end of the day´s trading session, after getting to as high as Rs 533. Similarly, a total of 430 shares of CBI, amounting Rs 2.55 million, changed hands through 57 transactions.

The share prices of CBI closed at Rs 572 per unit, after getting to as high as Rs 588 per unit during the day.

● Lack of irrigation hampers farmers●

Posted on 2009-06-12
DOLKHA; Farmers of Phusku VDC in Dolkha district have been hit hard due to insufficient irrigation for their crops. Farmers said two irrigation canals were insufficient to irrigate the fields of some 250 farmers in this area.
Ram Krishna Budhathoki, a farmer, said vegetables and crops planted in the winter did not grow well due to lack of irrigation. He complained that the construction process of an additional canal has not moved forward though the District Irrigation Office had conducted a survey.
Rabindra Thapa, chief of the office, said a small budget had been allocated for the Saute Irrigation Project for this fiscal year.

● Naturally Nepali Fiber furniture at Knot Craft●

Posted on 2009-06-11
KKATHMANDU: If you´ve had it up to here with vinyl, chrome, leather and glass interiors, maybe it´s time for you to go natural. Think about it: done well, furnishing your home with earthy, natural furniture can turn your drawing room into a charming space, one in which the less loud aesthetics of natural-products based furniture make the place seem more inviting.

What´s more, if you buy your furniture at a place like Knot Craft, Kupondole, you´ll also be doing two commendable things: one, you´ll be doing your bit to help the green/sustainable movement, since the furniture at Knot Craft is made from natural fibers; and two, you´ll be doing your fellow countrymen a good turn, for the shop´s products are all made by the Nepali who live in the Tarai´s wetlands.

“We want to support Nepali traditional arts and skills, while at the same time preserving the region´s biodiversity” says said Siddhi Raj Regmi, marketing manager of Knot Craft. The furniture at his showroom were all made by artisans from the poor and deprived communities in the Tarai, and the material used in producing them--elephant grass, sisal, banana fiber, bamboo-are all abundant in the wetlands.

Furthermore, all the prices of all the furniture on display at Knot Craft are mid-range, which means that you can give your home a do-over without burning a hole in your pocket (the sofa here, for example, costs only Rs 11,000). And although the furniture can look delicate at first glance, the pieces are in fact pretty durable. They´ll last at least as long as your vinyl, glass and leather ones do.

These furniture pieces also boast two other winning qualities: they´re easy to repair (unlike, say, smashed glass tables or ripped leather couches), because most repair work entails either only reweaving or replacing fiber straps; and many of these pieces seamlessly meld functionality and aesthetics. The low-sitting dining table, for example, encases a space beneath its table top that doubles as a storage area.

Knot Craft also sells non-furniture items. Check out this bag made from corn husks. It´s not only chic, the fact that it´s made from husks--something that´s usually considered nothing more than dross matter-- makes it a bag that´s made with all the best of intents. The logic used in making this goes thus: we´re not just using material that will late end up as garbage; we´re actually using material that´s actually considered garbage to create beautiful stuff.

● Cosmic Air lands in controversy over payment deal●

Posted on 2009-06-11
KATHMANDU: Cosmic Air, which had once triggered a price war in domestic aviation sector by selling tickets at rock bottom prices, is mired in another controversy: because the company has failed to give refunds on tickets that were purchased by various travel agencies. That unpleasant situation came about when Cosmic Air stopped doing business.

At the center of the controversy lies a promotional scheme called “pre-paid planning,” introduced by Cosmic months before it halted all its flights. Under the scheme, Cosmic had sold air tickets to travel agencies and tour operators at heavily discounted rates. And the only condition travel agencies had to fulfill to be eligible for the scheme was this: pay for the tickets in advance, i.e. at the time of purchasing the tickets.

The scheme was a lucrative one for travel agencies because they were getting tickets for sectors, such as Biratnagar, Pokhara, Bhadrapur and for international routes like New Delhi, at prices 50 percent lower than those being offered by other airline companies.

Taking advantage of the offer, various domestic travel agencies and tour operators had invested millions of rupees in the scheme. But after Cosmic terminated all its operations in July 2008, panic took hold among travel agencies and tour operators. That panic has now turned into anger after the company continued to default on its promise of giving refunds on the purchased tickets.

“At the time when the airline closed down its operation, we were consoling ourselves, saying Cosmic would pay back what they owed in due course of time,” one of the victimized travel agents, speaking on the condition of anonymity, told myrepublica.com. “But now we feel that the company is trying to take advantage of our patience.”

According to Nepal Association of Tour and Travel Agents (NATTA), Cosmic Air owes around two million rupees to some of its members. “But this number includes only companies that lodged complaints at NATTA. There are many more who haven´t approached us,” a source, from NATTA said. To pacify the annoyed travel agents, Cosmic has been issuing checks but according to sources, they bounce all the time.

Cosmic Air, established in 1997, has been in controversy now and then ever since November 2005, when it terminated all its operations after Nepal Oil Corporation (NOC) refused to supply fuel to the airlines. NOC had made that decision after Cosmic failed to pay debts of Rs 125 million to the oil corporation. It restarted operations after paying a part of the debt, but in October 2006, it had to suspend its operations again after its Fokker aircraft was grounded due to technical reasons.

In order to prop up its position and reputation in the market it then launched a price war. But it had dropped down its prices so much it couldn´t generate enough cash to compensate its day-to-day expenses.

● Lack of NA´s aircraft hinders IC import●

Posted on 2009-06-11
KATHMANDU: Despite India´s readiness to sell Indian currency (IC) to Nepal, to meet Nepal´s domestic IC demand, the shortage of IC is likely to continue for some time owing to the lack of carriers to transport notes to Nepal from the Indian city of Kolkata.

According to an officer with the central bank, the problem of transporting IC notes came up after the national-flag carrier Nepal Airlines (NA), which has been transporting IC notes from Kolkata, informed the central bank about its inability to transport notes, because one of its two Boeings is flying abroad to get a regular overhaul.

"We have been told that NA will not be able to perform the job, as the remaining one aircraft already runs on an extremely heavy schedule," the official told myrepublica.com. "NA has said that it can transport the notes only after the aircraft that´s being overhauled returns to service after a month," said the official.

NA has been charging US$ 30,000 per chartered flight to transport 600 million worth of IC notes--the maximum amount covered by insurance--from Kolkata to Kathmandu. The official further said that the central bank has also explored the possibility of using Indian carriers for the purpose of transporting the notes.

However, since Indian carriers have quoted prices that are double that the NA has been charging, the central bank is in dilemma over what steps it should take. But the official did offer a hint that the central bank might opt for hiring an Indian carrier, given the complications that a severe IC-note shortage can bring.

The country started experiencing the shortage after the Reserve Bank of India, the central bank of India, stopped supplying IC notes to Nepal for reasons unknown.

Over two-thirds of Nepal´s total demand of IC is bought from the Kolkata branch of the RBI, by paying the bank in convertible currencies, chiefly the US dollar. Since trade with India makes up 70 percent of Nepal´s total foreign trade, and since bulk imports are made from India against Nepal´s paying in IC, an adequate supply of IC is very important for Nepal.

According to the central bank here, the normal demand of Indian currency currently stands at Indian Rs 300 million per month. But because Nepal pays in IC for imports of petroleum products, the country´s largest import, the demand for IC has been growing rapidly in recent years.

● NOC gives an inch, more talks scheduled●

Posted on 2009-06-11
KATHMANDU: Aiming to address the demands of the agitating tanker drivers, Nepal Oil Corporation (NOC) on Wednesday agreed to revise the norms of technical loss, the loss in petrol volume during the ferrying process due to drops in temperature. According to the norms, NOC accepts that petrol volume can drop by 1.06 liter per kiloliter for every degree centigrade drop in temperature. Any loss beyond that volume is tagged as leakage and tanker operators have to compensate for the loss. Tanker owners then transfer the burden on the drivers´ shoulders and cut the amount of money incurred by the loss from the drivers´ salaries.

To determine what revisions to make, NOC said it would be sending a team of technical persons, including representatives of tanker owners, to India to study and make appropriate recommendations.

However the drivers said the NOC´s move still did not fulfill their other demands, chief among which is a raise in perks and packages, and thus they continued with their strike. As a result, the importing of petroleum products came to a grinding halt for a second consecutive day on Wednesday.

NOC, however, took a stand that the issue of revising drivers´ perks and packages was a matter that the drivers should take up with their employers--the tanker owners--and not the corporation. It has invited representatives of Nepal Tanker Drivers Association (NTDA) and Nepal Petroleum Transporters Federation (NPTF) for talks to resolve the issue on Thursday.

"We are hopeful a breakthrough will be made tomorrow," NOC spokesperson Mukunda Dhungel told myrepublica.com.

The tanker drivers launched the strike mainly because they are demanding that the government enforce a minimum-wage regulation in petroleum transportation, arrange parking facilities in Raxaul and Kathmandu depots, free drivers and tankers´ staff from undue hassle created by the Indian police and revise the technical-loss limit pledged to them.

The drivers have argued that the legitimate limit of shrinkage, which happens while transporting fuel from hotter to colder places, and which is fixed by NOC, is lower than the international standard and the enforcing of that limit has been forcing them to pay fines "unfairly."

The drivers have also expressed anger that tanker operators shift the liability to drivers "We want this mess to end," said Binod Manandhar president of NTDA.

NTDA has further charged that the tanker operators are not paying even the minimum monthly wage of Rs 4,600 to their staff. The organization has demanded the enforcement of the government´s minimum-wage standard in the sector and has also sought additional incentives, citing that transporting fuel is a risky job.

Tanker owners, however, say that they are already paying thier staff handsome salaries and that the drivers´ statement was false.

Tanker drivers had launched a strike placing similar demands in the past as well, but they´d withdrawn it after the corporation and the NPTF agreed to fulfill their demands.

"Three months have passed since the agreement, but none of the agreements have been implemented. That forced us to launch the strike," said Manandhar.

The corporation, meanwhile, said it has already arranged parking facilities at the Thankot depot in Kathmandu. "We are also making efforts to arrange a parking space in Raxaul," said Dhungel, elaborating that the drivers´ demand related to parking too would be fulfilled soon.

● Govt to monitor mango for calcium carbide use●

Posted on 2009-06-11
KATHMANDU: On suspicion of the use of calcium carbide- a chemical harmful to human health - in mangoes being sold in the market, the government is going to initiate monitoring immediately to discourage the practice and increase people´s awareness. Nepal and neighboring India have already banned the chemical for use to ripen fruits.

“We have seen a flood of mangoes in the Nepal market far ahead of the normal mango season that begins only after July. So, there could be massive use of hazardous chemicals to ripen prematurely harvested mangoes,” Dr Hari Dahal, spokesperson of the Ministry of Agriculture and Co-operatives (MoAC), told myrepublica.com on Wednesday.

“We are mobilizing our central and district level offices to keep a close watch on the use of chemicals in mangoes and increase awareness about the effect of the fatal chemical on human health through consumption of the toxic fruit,” Dahal said.

The government has appointed District Agriculture Development Officers (DADO) as food commissioners with the duty of monitoring the quality of food items sold in district markets.

The Department of Food Technology and Quality Control (DoFTQC) under MoAC is the central authority with responsibility for monitoring the market, conducting tests on food commodities and taking action against those found involved in producing and selling inedible food items. One kg of calcium carbide is used to ripen 200 kg of mangoes.

Dahal said calcium carbide, also used in iron welding, contains arsenic and phosphorous which in turn produce acetylene gas that affects the neurological system.
Experts said consumers of the adulterated mangoes will suffer from headache, dizziness, mood disturbance, sleepiness, mental confusion and memory loss.

“Excessive use of calcium carbide to ripen mangoes is toxic and the consumers will show major symptoms like vomiting, diarrhea, abdominal pain, thirst and weakness,” said Dahal.

Most of the mangoes currently available in the market are imported from India as the mango harvest has not yet begun in Nepal.

“We urge mango traders not to use the harmful chemical, which has already been banned in our country, to ripen fruits,” added Dahal.

Posted on 2009-06-10
KATHMANDU, June 10: Nepal Development Bank (NDB) has launched a vitriolic attack against Nepal Rastra Bank, calling the central bank´s decision, taken last week, to liquidate NDB a prejudiced move and one that was not based on truth and reality. NDB has also said that liquidation is not the way to address the problems faced by individual depositors and investors who are worried about losing their hard-earned money.

Speaking to the press for the first time after the central bank decided to liquidate NDB, Uttam Pun, the former chairman and one of the promoters of NDB, claimed that the financial condition of the bank had not deteriorated to the extent as has been claimed by the central bank. He also said that NRB could take whatever action it wanted against him and the bank´s management if they were found guilty of flouting NRB´s banking regulations.

"An independent investigation committee should be formed and it should look into all the past activities of the bank. If the investigation concludes that mistakes were committed by me, I am willing to go to jail," said Pun, who had agreed to talk during the press meet upon repeated requests from media personnel, and the depositors and shareholders of NDB.

Pun, clad in a red Polo T-shirt and coat, looked confident during his 15-minute speech. He defended every move made by NDB so far, and he said that the central bank had repeatedly tried to take action against NDB "because of my unwillingness to, without arguing, kowtow to whatever they said." As he continued with his talk, he also seemed to win the confidence of the depositors and shareholders--until he made a sarcastic comment about the media´s coverage of the issue. Soon after he said that the Nepali media were printing or broadcasting whatever was being fed by NRB, members of the press came down heavily upon him.

"What are you trying to say?" asked a journalist from Nepal Television. "That we are publishing and broadcasting news based on illusion?"

The fact of the matter is NDB is a troubled bank. Its non-performing loans stood at 30.43 percent of the loan portfolio till mid-March 2009. Seeing its dismal performance, NRB had been asking NDB to improve its financial health for the last five years. But because its situation continued to worsen, NDB on June 2 decided to finally liquidate the bank.

To begin the process of liquidation, NRB sent a letter to NDB last Thursday, asking NDB´s management to justify why the central bank shouldn´t liquidate it. NDB was ordered to furnish explanations within 15 days of receiving the letter.

However, NDB claimed that the bank´s condition was not as bad as had been concluded by NRB. "NDB only has an accumulated loss of Rs 620 million, whereas Rastriya Banijya Bank has an accumulated loss of Rs 15.13 billion, and Nepal Bank Limited has an accumulated loss of Rs 5.51 billion; even private sector banks such as Nepal Bangladesh Bank has an accumulated loss of around two billion rupees, and Nepal Credit and Commerce Bank has an accumulated loss of Rs 420 million," said Amar Gurung, chairman of NDB. "Is NRB trying to liquidate them as well? We need an answer. If it is not, is NRB, which should be playing a guardian´s role, discriminating among banks?"

He also said the bank has recovered Rs 46.6 million of its bad loans and that the bank has collected an additional Rs 68.6 million through the sale of its non-banking assets. "We have also returned deposits of Rs 485.5 million deposited by the Nepal Army Welfare Fund and deposits of Rs 470 million of the Provident Fund," Gurung said. "All these things show that the financial condition of the bank has improved significantly and that NRB´s decision to liquidate the bank at this stage was not one taken in the interest of the public shareholders and individual depositors."

The Association of Nepali Development Banks and the Association of Nepali Finance Companies have also asked NRB not to liquidate the bank, but to instead, make efforts to revive its financial condition by working together.

● Dry fruits more expensive, sesame price quadruples●

Posted on 2009-06-10
KATHMANDU: If it has been more than a month since you last stocked up on dry fruits and sesame, you´ll be in for a shock the next time you visit the stores. The price of some popular dry fruits has gone up by as much as 10 percent over the last month and a half. And that rise will actually appear moderate once you learn about the rise in sesame seed prices: for according to traders, sesame seeds are now more than 250 percent more expensive than they were in mid-April. Seed supplies have simply dried up, they say.

Price of sesame seeds soars

The quadrupling of the price of sesame seeds has been caused by the acute shortage of the seeds in the market. Jagadish Yadav, a trader in Narayanghat, says that retail stores have very little stock of sesame seeds right now because fresh batches have stopped arriving from farmers in this dry season.

Yadav says that sesame seeds are selling for Rs 240 per kg, up from the Rs 65 per kg of one-and-a-half months ago. And the shortage that drove up the prices looks to get even more acute. "The remaining stocks of sesame seeds are being sold to farmers for the coming plantation season," says Yadav.

It´s not surprising that there is a sesame-seed shortage today. Kamala Neupane, an agriculture technician at the District Agriculture Development Office in Chitwan, says shortages of sesame seeds had been deepening over the past few years because production volumes were shrinking in the district.

Chitwan, the major district that produces and supplies sesame seeds, has witnessed dropoffs because farmers are increasingly shifting to rearing other high-yield crops.

Sesame is widely used to prepare pickle as well as for various religious rituals by Hindus.

Price of most of dry fruits goes up

Traders say that the price of raisins has gone up to 190 per kg, from Rs 140 over the last one-and-a-half months. Most of the raisins available in Nepal are imported from China. Singaporean betel nut is selling for Rs 150 per kg, up from 130 per kg a month earlier. However, Thai betel nuts have become cheaper by Rs 5. They now cost Rs 90 a kg.

The price of cardamom rose to Rs 1,050, from Rs 1,050 per kg. Black cardamom and peanuts have also become dearer over the period; they cost Rs 260 per kg and Rs 85 per kg, from Rs 225 per kg and Rs 80 per kg a month earlier.

Ravi Kumar Gupta, a trader at Makhan dry fruits market, says the rising price of dry fruit items in source countries drove up prices in the Nepali market. Raisins are sourced from China, whereas cardamom is imported from Guatemala and the USA. Similarly, other items such as black cardamom, betel nut, cumin, peanuts and coriander are imported from India.

Spices save the day

Consumers are in for a smidgen of good news, though. The major spices have all become a bit cheaper. Traders say the prices of cumin and coriander, widely used spices in Nepal, declined to Rs 225 per kg and Rs 95 per kg, from Rs 250 per kg and Rs 110 per kg, respectively.

● Airlines increase flights to Pokhara, Jomsom●

Posted on 2009-06-10
POKHARA, June 9: Pilgrimages and bandas, two disparate phenomena, are leading to an increase in yet another disparate phenomenon: the number of flights in the Pokhara-Jomsom and the Kathmandu-Pokhara sectors. It´s not actually too difficult to see why. The number of pilgrims heading to Muktinath, especially from India, has increased over the years; at the same time, the number of bandas in the country has increased too. In such a milieu, if you are a pilgrim who needs to get to Muktinath through the shortest, least bothersome route possible, you would probably take to the air.

And the airline companies have been only too happy to comply: to meet the demand, companies have, over the last few months, increased the number of flights between Pokhara and Jomsom, the start-off point for the onward journey to Muktinath, and also between Kathmandu and Pokhara, the drop-off point for many Indians arriving in Nepal.

Ailine operators say that they have added extra flights to the Kathmandu-Pokhara sector because their regular flights were not enough to cater to the increased number of Indian pilgrims heading to Muktinath, one of the more popular temples in the country.

Yeti Airlines and Sita Air, which operate flights in the Kathmandu-Pokhara as well as Pokhara-Jomsom sectors, have added five more daily flights to Jomsom from Pokhara, says Narendra Bahadur Thapa, chief of Pokhara Airport.

That´s a substantive increase to their earlier schedules. In the past, companies used to operate just one flight to Jomsom from Pokhara. “Even two flights a day used to be a rarity. But now, even with the number of daily flights to Jomsom increased to such levels, the flights are still packed,” says Thapa.

Indeed the demand is such that despite the increase in the number of flights, say operators, a substantial number of pilgrims, cannot get a hold of air tickets and have to travel to Muktinath on sports utility vehicles.

● Morang takes pride in 341 new industries●

Posted on 2009-06-10
BIRATNAGAR: A total of 341 new cottage and small industries have come into operation in Morang district.

At a time when the existing industries have been facing an acute shortage of raw materials, bandas, power crisis and labor strife, the establishment of a high number of cottage and small industries has given a new lease of life to the country´s ailing industrial sector.

The new industries, set up at a total capital of Rs 165,467,000, have been registered at the Office of Cottage and Small Industries, Morang.

According to the office, these industries manufacture products worth Rs 195 million yearly and employ over 3000 people.

The newly registered are service-oriented industries producing lentil, rice, edible oil, timber, soap, rubber and plastics.

Office chief Dinesh Ghimire said a total of 3,528 industries are operating in Morang with 332 being cottage and 3,196 small industries.

A total of 35,988 men and 768 women have been employed by these factories, Ghimire said, adding that licenses of 11 industries were canceled this year for their failure either to renew or come into operation.

● Lack of market hits small industries●

Posted on 2009-06-09
KATHMANDU, June 8 - Prime Minister Madhav Kumar Nepal stated on Sunday that the cabinet meeting would soon pass the micro, cottage and small industries policy prepared by the previous government to develop the cottage industries.

Addressing the inaugural ceremony of the 18th national convention and 16th women entrepreneurs conference of the Federation of Nepal Cottage and Small Industries (FNCSI), Nepal said, "The government will leave no stone unturned to promote and formulate a better policy for micro, small and cottages industries which have been playing a crucial role in uplifting the lives of rural and poor urban people."

He said that the government was always ready to create necessary regulations to promote the private sector and carry out effective implementation and evaluation activities.

The prime minister added that there was a huge potential for the development of micro, cottage and small industries for which entrepreneurs had to concentrate on capital, technology, quality certification and market expansion.

He also urged entrepreneurs to enhance the production of quality goods. "There are plenty of choices for customers in the market. If you fail to win their hearts, it will be hard to remain in the market," he said.

Ang Dendi Sherpa, president of the FNCSI, said that the big challenge for entrepreneurs was lack of market and promotion. "Quality goods produced in rural districts have not been able to reach national and international markets for lack promotion."

He urged the government to implement a separate policy on micro, cottage and small industries as soon as possible.

Sherpa said that the government should register a "collective mark" for each product produced by the community, cooperative, micro, cottage and small industries and should help in market promotion.

Demand for a Sick Industry Stimulation Fund, income tax waiver for cottage and small industries, waiver on excise duty and refund provision of VAT to cottage and small industries in remote areas and income tax exemption for 10 years for industries that are fully owned by women were some of the points that FNCSI president stressed.

Anjana Tamrakar, president of the Central Women Entrepreneurs Committee, said that entrepreneurs were being charged a high rate of interest by banks and financial institutions.

"We have been paying a high interest rate for loans. On the other hand, our products are piling up in warehouses for lack of market and frequent strikes and protests," said Tamrakar.

She said that the new constitution should incorporate a provision to help bring special programmes and policies to develop entrepreneurship among women.

● Vegetable ghee industry on verge of collapse. Exports drop to Rs 8m●

Posted on 2009-06-09
KATHMANDU: The skyrocketing price of palm oil, the key ingredient that goes into producing vegetable ghee, has brought the vegetable ghee industry in Nepal to its knees. Until the last fiscal year, the industry used to make up the largest chunk of exports, of any sector, to India.

How badly has the industry been hit? Nepal Rastra Bank´s statistics show that only Rs 8 million worth of Nepali vegetable ghee was sold in India over the first nine months of 2008/09; over the same period last year, Nepal had exported Rs 2.13 billion worth of the product, and over the same period in 2006/2007, Nepal had exported vegetable ghee worth over Rs 3.45 billion. In fact, things have gotten so bad, that the product did not even feature among the top 25 items exported during the given period in 2008/2009.

Why has the industry been so badly hit? It all has to do with the duty paid on palm oil, both in Nepal and in India, say officials at the Ministry of Commerce (MoC). India, which earlier used to impose a duty of 80 percent on the import of palm oil by Indian traders, started waiving that duty in April 2008. India did this to both prop up its vegetable-ghee industry and to lower the price of the product for Indian consumers. Nepal, on the other hand, has always kept the duty to be paid on palm oil imports very low.

In other words, prior to 2008, Nepali vegetable ghee producers had a huge advantage over their Indian counterparts because Nepali producers got their key raw ingredient so cheap.Furthermore, according to the bilateral preferential trade agreement inked between Nepal and India in 1996, India allowed duty-free access to Nepali manufactured goods, including vegetable ghee (that duty free facility for vegetable ghee was capped at 100,00 tons of ghee imported by India from Nepal). Without a tariff barrier, Nepali vegetable-ghee producers had nothing to impede their export to India.

“But the ending of this tariff gap has made our exports more expensive than Indian vegetable ghee. Lately, we have been barely able to find customers in India,” says a vegetable-ghee exporter.

Although the exporter says that the export figures were not as low as has been reported by NRB reported, he did admit that the industry is close to cratering, especially since the new export climate has forced a sharp drop in the capacity utilization of 16 manufacturers. That has exposed investments worth over Rs 3 billion to risk, which has gone in the industry.

In a bid to reverse this situation, the Confederation of Nepalese Industries, had last year asked the government to waive the 25 percent duty imposed on crude palm imports. But the government did not pay heed to the suggestions, mainly because the producing of vegetable ghee from palm oil does not need much value addition, which means that it does not substantially create employment.

The industry´s fall has been steep indeed. Exports of vegetable ghee had suddenly soared to more than Rs 5 million after the 1996 bilateral trade treaty. The industry had initially grown with Indian investments, but Nepalis had taken over the industry when the exporting of the commodity faced severe resistance from Indian competitors during the renewal of the treaty in 2001, which culminated in the imposition of quota restrictions on Nepal´s vegetable-ghee exports to India: in 2002, to stanch the flow of the product from Nepali into India, India had imposed a ceiling of 100,000 tons for duty-free import of vegetable ghee from Nepal. Any quantity beyond that was subjected to higher customs duty. And even the ghee that was duty-free was required to be dealt through the State Trading Corporation of India; and the hassles that cropped up now and again in the form of state-duty and other non-tariff barriers caused Nepal to export ghee in quantities that were well below the quota ceiling. But all these issues regarding quotas and hassles are all moot points now.

Now, the questions that the Nepali vegetable-ghee industrialists have to answer are directed more at themselves.

“Eventually, the vegetable-ghee industry stands testimony to how weak and short-sighted Nepal´s industry has been,” says an MoC official.

All the industry´s investors knew vegetable-ghee exports to India would peter to a halt the very next day that the duty differences on palm oil, between the two countries, ended. But the returns from the business were so handsome that the industrialists preferred to keep on reaping profits--through the last day that the opportunity was still there. And that´s why the tragedy intensifying now.

● Egg price reaches new high●

Posted on 2009-06-09
KATHMANDU: The price of eggs has reached a new high of Rs 8 per piece due to a supply deficit sparked by declining production. Eggs previously cost Rs 6.5 per piece (Rs 195 per crate).

Nepal Egg Producers Association has said a national gathering of egg producers held in Narayanghat led to the decision to increase egg prices, keeping in view production costs and the existing situation of egg supply in the market.

Dr Til Chandra Bhattarai, former president of the Nepal Poultry Entrepreneurs Forum (NPEF), an umbrella body of poultry producers, said egg prices reached the high due to a sharp reduction in egg production following bird-flu cases in Jhapa district five months back.

“Poultry goods, including eggs, are scarce in the market as production volume nosedived after bird-flu cases were reported in Nepal. Farmers are still hesitant to keeps fresh chicks (broiler and layer) at their farms,” Bhattarai told myrepublica.com on Monday.

Bhattarai said the price was raised due to soaring production cost and declining production volume, as well as the compulsion to adjust the loss suffered during the bird-flu period. However, the new upped price is disproportionate to production cost. According to him, the cost of production hovers around Rs 120 per crate.

“Entrepreneurs are adding the loss they suffered due to bird-flu to the egg price,” he said. According to him, production of eggs dipped to 800,000 pieces per day, compared with 1.1 million during a normal period.

Entrepreneurs said prices are not likely to go down until September when a new batch of chickens begin to produce eggs. The population of layers is estimated to be around 1.8 million across the country.

● Exodus of cows leads to milk shortage●

Posted on 2009-06-09
BUTWAL: The Dairy Development Corporation of Butwal has warned that Rupandehi may face a shortage of milk in the coming days because the district lacks milk-producing cows.

In the last nine months, Rupandehi, one of the largest milk-producing districts in Nepal, has seen an exodus of around 1,200 highly-productive dairy- and breeding- cows. These cows were sold to cattle farmers in Gulmi, Syangja, Pyuthan, Baglung, Rukum, Rolpa and Salyan.

Although Rupandehi has always been considered an ideal place to buy cows from, never had the district seen the exiting of so many cows till date. Laxman Ghimire, a livestock development officer at the Rupandehi District Livestock Office, called it the result of the active promotion of livestock farming in various parts of the country.

"Many community livestock-development projects are encouraging farmers to embrace commercial farming of livestock, such as cows, for a living; this has increased their demand throughout the country," Ghimire said. And as the demand is going up, the price of cows is also skyrocketing. According to the available statistics, a healthy cow now fetches Rs 60,000, compared with Rs 20,000 to Rs 30,000 of the past. That is the main reason that farmers in Rupandehi are selling their cows like never before.

But as more and more cows are leaving the district, the volume of milk produced there is decreasing by the day. Currently, milk production in the district hovers at around 40,000 liters per day, compared with 50,000 liters of the previous years.

If the milk production in the district continues to go down, it may also affect Kathmandu´s milk market, as Rupandehi supplies around 25,000 liters of milk per day to the capital.

● Crop failure: Maize production to drop●

Posted on 2009-06-08
KATHMANDU: The prolonged drought that struck Nepal in the past winter and early summer is being held responsible for yet another decimation of a staple commodity product: maize. The full impact, however, will only be felt in summer, when maize, the second-most consumed staple food in the remote districts, will be harvested, say officials and aid agencies.

This shortfall will further deepen the food crisis for the many people who have already witnessed a massive loss in winter crops and who are thus already living through a severe food shortage.

“The people in the remote districts are going to face even tougher time in the coming months. And they´ll have to bear their sufferings until the next paddy harvest.” Dr. Hari Dahal, spokesperson of the Ministry of Agriculture and Co-operatives (MoAC), told myrepublica.com.

A crop-assessment report published by the World Food Program (WFP), the UN food agency, stating that the delayed rains and the subsequent late plantation of maize had resulted in the poor germination of the maize plants, corroborates Dahal´s claim.

The losses projected for the summer comes on the heels of equally dismal reports for the extremely lean period Nepal has just seen. The government announced earlier that as a result of the winter drought, some districts in the Mid-and-Far Western regions of the country have already experienced crop-production losses of as much as 50 to 70 percent, which pushed more than two million people into the high-risk-of-food-insecurity group. That´s because this year, wheat and barley production, the other major staples, had dropped by 14.5 percent and 17.5 percent respectively as compared to last year.

Responding to the worsening food situation and to the coming extended season of shortfall, the WFP has increased the number of beneficiaries of its food aid program to 2.2 million, from the existing 1.5 million people: it is increasing the amount of food that it will provide for 2009 by 36, 821 tons, to 183,671 tons. Similarly, Nepal Food Corporation (NFC)--the state-owned entity responsible for buying and distributing food--has also increased the quantity of food to be delivered by it to the food-deficit districts.

“We have set a target of delivering a total of 170,000 quintals of food, worth Rs 550 million; that target represents an increase of 60,000 quintals from the originally planned 110,000 quintals,” says Bijay Dhwoj Thapa, the deputy general manager of the NFC. Last year, Rs 370 million was spent on 120,000 quintals of food and for providing a transportation subsidy.

But despite all the good intentions and plans made to help the people in the remote regions in Nepal, the people have had to deal with so many food-related problems that helping them out is getting tougher and tougher. For example, the distributing of the required food grains in the food-deficit districts was hampered by the frequent bandas and, ironically, even by the monsoon rains.

“The heavy rains this monsoon has caused landslides and floods, making it extremely dangerous and difficult to deliver food to these areas,” Richard Ragan, country director of the WFP, Nepal, told myrepublica.com.

Besides the transportation problems, the NFC is also facing other difficulties in carrying out its task because the number of its food distribution depots was reduced to 12 during the insurgency period, from the original 58 of earlier years. The NFC had actually made a proposal last year to the Ministry of Commerce and Supplies to increase the depots to 114, to ease the supply. But the ministry has put the proposal on hold, citing a fund crunch.

As if all this weren´t enough, the market forces too are not on the suffering people´s side. For example, the people could have probably switched to consuming rice in any other season where maize had suffered had a huge shortfall, but the winter drought has pushed up the price of all major food commodities, including rice.

● Govt shelves action against revenue dodgers●

Posted on 2009-06-08
KATHMANDU: The new government has chalked off from its priority list the Maoist-led program to take action against tax evaders who did not comply with the voluntary declaration of income sources (VDIS) scheme, indicating that the program that the former finance minister pushed for strongly could be shelved.

"The program is not on the priority list of the new finance minister," said a government source. He told myrepublica.com that the minister had also not given his instructions to the Inland Revenue Department (IRD), even though the latter apprised him that it was in a position to initiate action.

Since assuming office, new FM Surendra Pandey had received numerous calls from the private sector to drop the program, and that may have led him to drop the Maoist scheme. Indeed, during a meeting with businessmen, he had made remarks that he would not irk taxpayers by taking such "unnecessary steps."

"I will study the rationale for the VDIS-action program," he had also told myrepublica.com on the day of his assuming office.

The IRD, on the other hand, which set up a special cell to investigate the cases of tax evasion and land axe against revenue dodgers, has said only that it has, after conducting investigations, sharply narrowed down the list of probable tax evaders.

"We are well in a position to instantly probe some 400 cases of larger tax evasions," said a senior IRD official.

However, since the taking of such action will require strong ownership of the process and patronage from the political leadership, the IRD has maintained silence on the issue, in no small part because of the icy response the finance minister has given the proposal.

IRD Chief Shanta Bahadur Shrestha, however, said that the program has not been pushed onto the sidelines. "Our investigation cell is as active as it was before, and we are ready to swoop down on revenue dodgers," he said . But he did admit that he was yet to receive instructions from Minister Pandey to nab the dodgers.

The former government, led by the UCPN Maoist, had vowed to bring down the axe on tax evaders who had not taken the benefit of the opportunity to legalize their property by paying a 10 percent tax.

The government had activated the IRD, setting up special investigation for action, as soon as the budgetary program of VDIS ended on mid-March 2009.

Only some 4,000 tax payers have taken up the government´s offer, even though the Finance Ministry had estimated that 10,000 people would do so. The scheme had brought undisclosed property worth Rs 15 billion into the tax net and fetched a revenue of Rs 1.50 billion for the government.

Later, the IRD had started investigations into sectors and industries that were identified as "revenue sensitive"´ such as the real estate sector, manpower agencies, commission and consultancy firms, and medical and legal professionals, among others. It had also sent initial enquiry letters to 900 probable tax evaders, ringing alarm bells among revenue dodgers.

● DoFE network will expedite paperwork process●

Posted on 2009-06-08
KATHMANDU: Prospective Nepali overseas-workers should soon find the process of heading out of the country a less taxing ordeal. That´s because within next month, the Department of Foreign Employment (DoFE) will be able to process workers´ documents much faster--in hours instead of weeks--once the DOFE is done installing a network linking all the main governmental organizations that are involved in the process of sending workers abroad (the DoEP, the Ministry of Labor and Transportation (MoLTM), and the labor desk at Tribhuvan International Airport).

The network runs on a special software, the employing of which should obviate the need for overseas-jobs seekers, and their local employment agencies, to go through the old tedious process of filing their papers at, and having them verified by, the authorities concerned. In fact, the foreign-employment agencies can even conduct all their paperwork from the confines of their offices; they´ll merely need to go online, log on to the network and submit worker´s documents, applications to the concerned authorities for permission to work abroad, and so on. Earlier, for example, the agencies would have needed at least three days just to get the final permission from the government for sending the workers abroad.

It´s not just the manpower agencies and workers who´ll benefit from DoFE´s new network. All the main governmental units will, in a heartbeat, be able to share and verify information related to the outbound worker´s jobs--the salaries and benefits the workers will receive, the nature of their jobs, the details about the employers, labor contracts, and so on.

Furthermore, according to Bed Prakash Lekhak, the director at the DoEP, the authorities´ using the new system will also prevent the manpower agencies from manipulating the information provided by the employers abroad and the information about the workers that the agencies provide the government here: if needed, any relevant information can be pulled up and verified immediately.

According to Lekhak, the DoFE has already started training two dozen of its employees, including ten officials, to work the new system. The DoFE has been provided with assistance for this project by the International Labor Organization, the United Nations Development Program, and the Department of International Development.

● NTA warns SNPL against unhealthy competition●

Posted on 2009-06-08
KATHMANDU: Nepal Telecommunications Authority (NTA), the country´s telecom regulatory body, has warned Spice Nepal Private Limited (SNPL) not to enter into unhealthy competition by demolishing infrastructure set up by other telecom companies.

The warning was issued after SNPL, the operator of Mero Mobile, damaged optical fiber cables laid by Nepal Telecom (NT) and United Telecom Limited (UTL) along the Birgunj-Hetauda highway. The damage was done after SNPL started digging canal at the same place where NT and UTL had laid their cables.

NT has confirmed that the ducts containing the fiber optic cables of the company were damaged. Authorized UTL officials were not available for comment but reliable sources told myrepublica.com that more damage was done to the cables laid by UTL than NT. SNPL denied to comment on the matter.

To keep the situation under control, NTA has issued verbal instruction to SNPL to continue with the work in the presence of an NT official for the time being. "From Tuesday, a joint monitoring team comprising officials of the three telecom companies will oversee the ongoing work of SNPL," a reliable NTA source said.

However, NT has asked NTA to come up with a long-term solution to address the problem. "It is likely that the damage will be caused to optical fibers laid by other companies while carrying out maintenance work," a reliable NT source told myrepublica.com. "The only alternative could be stopping telecom companies from laying fiber optic cables in places where one company has already laid similar cables."

● Oil price rise likely NOC planning to hike rates later this month●

Posted on 2009-06-07
KATHMANDU: With the price of oil in the international market rising, petroleum consumers could soon be seeing unpleasant days, especially later this month.
The international price of crude oil has jumped to US$ 70 a barrel, and thus, says Nepal Oil Corporation (NOC), its import prices for major petroleum products have also gone up, shrinking its profit margin to Rs 250 million for June.

“That rise in price has seriously jeopardized our loans-repayment capacity, and it has straightaway exerted pressure on us to revise our prices,” said Chief of the heavily-indebted NOC, Digambhar Jha.

Going by the corporation´s debt servicing commitment, it needs to pay back Rs 500 million in principle and Rs 50 million in interest to its lenders. Paying back that amount is going to prove even more difficult for the NOC, now that the price rise has created a shortfall of Rs 300 million in the corporations´ meeting the debt servicing liability.

But despite the problem´s looming on the horizon, Jha told myrepublica.com, the corporation would take a decision regarding the problem only after observing how the prices would move on June 15--the date when it will receive the next import rates from its Indian supplier.

The corporation had faced a shortfall of Rs 150 million in its loans repayment fund in May as well, as the prices of petrol and diesel inched up on May 16.

From the profits it reaped by fixing domestic prices at a higher level, the corporation has over the last six month served loans of Rs 4.59 billion to the government and financial institutions.

The corporation, which had technically gone bankrupt during the high oil price era that lasted for some four years, had outstanding loans worth Rs 15.96 billion to clear about six months ago.

Over this period, it paid about Rs 2 billion to the government, Rs 1.80 billion to banks, about Rs 700 million to the Citizens Investment Trust (CIT) and Rs 150 million to the Employees Provident Fund (EPF).

"Now our loans liability stands at over Rs 11 billion, including the Rs 8.16 billion we owe the government," said Jha.

The corporation had borrowed the money to finance petroleum imports, as the government did not adjust domestic oil prices in line with the international trend. Nepal had suffered an oil loss of about Rs 21 billion during the span of those four years.

● Yeti Airlines to fly to 4 more remote places●

Posted on 2009-06-07
KATHMANDU: Yeti Airlines is all set to expand its network by launching flights to remote places that are unattended by many airline companies. To begin with, the airlines will soon start chartered flights to Langtang, Jiri, Dhorpatan and Syangboche.

Many airline companies in the country had not been able to conduct flights to majority of the far-flung areas after the government banned usage of single-engine aircraft citing safety reasons. Single-engine aircraft, which have short take-off and landing capability, are vital for airlines serving small airfields located in high altitudes.

However, after conducting a study on safety records and acknowledging the importance of such aircraft for a hilly and mountainous country like Nepal, the government has started granting license to operate chartered flights on single-engine aircraft some five months ago.

Taking advantage of the revised provision, Yeti Airlines has recently brought a Pilatus Porter, a Swiss-made single-engine aircraft with capacity to seat nine passengers and two crew members. This aircraft is known as one of the most reliable single-engine aircraft currently in operation worldwide.

Initially, Yeti Airlines will use its Pilatus Porter only to ferry passengers to four remote places – Langtang, Jiri, Dhorpatan and Syangboche. The airlines plans to fly to around 10 other far-flung places with small airfields soon after purchasing two more of Pilatus Porters in near future.

“We believe launching flights to places that have not been served by many will further consolidate our market position,” Vijay Shrestha, executive director of Yeti Airlines, told myrepublica.com.

Pilatus Porter was first used in Nepal in May 1960 to ferry transportation and climbing equipment of Swiss Dhaulagiri Himalaya Expedition. Nepal Airlines Corporation, the state-owned airline company, also used three Pilatus Porters from 1961 to 1998.

● Garment exports drop to half●

Posted on 2009-06-07
KATHMANDU: Over the first five months of 2009, Nepal´s readymade garment exports to the United Stated dropped to half the usual volume, as manufacturers shied away from accepting new orders of lower value that came their way.

Exporters say that the leading US importers offered 15 percent lower prices for fresh orders amid the drop in consumer spending in the United States, the largest apparel market. “The rates were so low, we wouldn´t have fetched any return; that´s why we could not accept all the orders,” said an official at Garment Association Nepal (GAN).

GAN´s statistics show that garment exports amounted to a mere US$ 3.40 million during the first five months of 2009; in the same period last year, the figure stood at US$ 6.91 million. In fact, the volume exported this year did not even total one-tenth of what the country exported in the same period in 2004.

Moreover, statistics show that garment exports dipped to 49 percent in May alone. Exports during the month were valued at just over half a million dollars; in May 2004, that figure was US $8.33 million.

Little wonder then that exporters say the industry has cratered over the last five years, in the absence of political and government support and in an environment that´s rife with labor problems.

The gloom in the garment industry, once the largest foreign currency spinner, had first crept in in 2002, when the United States started providing duty free facility to Sub-Saharan and Caribbean countries. That provision instantly made Nepali exports more expensive than their competitors´ by some 17 percent.

Since that year, the garment-export business has gotten progressively worse: within the country, labor problems, the lack of cost-effective infrastructural and logistics support and strike and bandas have hobbled the sector; and without, factors like the elimination of quotas in global apparel trading, have served to weaken Nepal´s garment sector.

During this ultra lean period, the number of industries has dropped to about a dozen from the more than 250 of the past. And in a vicious cycle, employment numbers have also declined with dwindling investments.

To resuscitate the industry, GAN has made clear that three measures must be taken: i) a Garment Processing Zone, the operating of which should lower productions costs, must be set up (the idea has been pushed since 1999); ii) an order-based hiring system (sought since 2007) that frees manufacturers from undue labor liability must be instituted; and iii) a duty-free-entry facility for Nepali garments in the United States (an issue that´s been lobbied for since 2005) must be provided by the United States.

Given the political instability and the weak government in the country, entrepreneurs doubt that the first two measures can be fulfilled. They are, however, hopeful that something similar to their third prescription might see the light of day, especially now that a couple of US senators have recently re-registered a bill that promises duty-free market access for some dozen Least Developed Countries, including Nepal.

● Auditing of BoK financial status begins●

Posted on 2009-06-07
KATHMANDU: Bank of Kathmandu (BoK) has appointed audit firm B.K. Agrawal and Company to carry out its due diligence audit (DDA), among four bidders.

The board meeting of the BoK held last Wednesday decided to award B. K. Agrawal the DDA contract under which the latest financial status of the bank is reviewed.

Other competing firms were R Bajracharya and Company, G.B and Company and Baker Tilly, Baskota and Company.

After the Nepal Rastra Bank (NRB) took over the bank for three months on May 19 saying that the squabble between the two groups of promoters posed a threat to depositors´ interest, the NRB headed board decided to do auditing.

"We need to know about the actual status of the bank at present before holding special annual general meeting (AGM) which will elect a new board," said Laxmi Prasad Niraula, director of the NRB who has been assigned to head the BoK board.

The auditing firm will have to complete the DDA process within 15 days, according to BoK. The bank will hold the AGM after the auditing report is presented to the board. The NRB has however kept open the option of handing over the original BoK management earlier board if the squabbling groups settle their differences and ask the central bank to leave.

The central bank has barred all seven bank´s board members including Sanjaya Shah and Radhesh Pant from becoming directors of any financial institution for five years.

The Shah group has however filed a case against the NRB for taking control of the bank over the issue of squabbling triggered by the firing of Pant from the post of managing director on March. The group maintains that the case is strictly ´internal issue´ of the bank.

The central bank has however made it clear that it has the right to take action against any financial institution to safeguard depositors´ interest.

The BoK has the deposits of Rs. 17.61 billion in its total financial resources of Rs. 20.32 billion. The promoters´ contribution to the bank´s financial resources stands at just Rs. 840 million.

"The central bank however had not taken over the BoK due to its bad financial health but to warn the bank promoters quarrelling against each other risking the deposits of ordinary people," said an NRB official.

As per the third quarterly report of the bank´s financial status, is operating profit stands at Rs. 514 million and its non-performing loans stands at just 1.7 percent.

● CNI demands multiple VAT rates●

Posted on 2009-06-07
KATHMANDU: The Confederation of Nepalese Industries (CNI) has asked the government to initiate different measures that will help the industries, including the adoption of the Multiple Value Added Tax (VAT) system. The apex body of Nepali industrialists has suggested four rates--1, 4, 8 and 13 percent of VAT-- where the rates vary according to the nature of a business enterprise.

"The existing single-rate VAT system should be changed into multiple rates VAT to promote production-based industries and to increase investment in the country”" CNI president Binod Kumar Chaudhary said.

The Federation of Nepalese Chambers of Commerce and Industry, and the Nepal Chamber of Commerce and other business organizations have been putting forward the demand for the multiple-rate VAT for a few years now. But the government has been turning down their demands fearing that some goods will gain undue benefit from lower rates of VAT. Under the existing VAT system, the government is enforces a single rate of 13 percent VAT.

The CNI has suggested that a four percent VAT be imposed on food commodities, including sugar, refined flour, mustard oil and vegetable ghee. CNI has also suggested the enacting of a Special Economic Zone (SEZ) Act to establish SEZs in Jhapa, Dhanusha, Birgunj, Panchkhal, Jumla and Dhangadhi, with the provision for product-specific, service-specific and area-specific development in those areas.

To promote the industries that use local resources, the CNI has also demanded 99-year leases for limestone quarries, besides keeping the royalty amount unchanged for 10 years. The CNI also wants the scrapping of the 13 percent VAT scheme on dairy industry and wants the government to declare tea estates as SEZs.

In a meeting held to discuss the CNI´s issues, CNI president Chaudhary demanded that the government exempt the income tax for companies that employ more than 200 workers; he also said that a similar facility should also be given to the business enterprises that employ the most number of women. The government has already adopted a policy to provide income tax exemptions for industries that employ more than 500 workers.

"The government should also give continuity to the popular programs initiated by the earlier government," said Chaudhary.

The CNI also demanded that the government focus on increasing investment in infrastructure and on encouraging public-private-partnership in productive ways that benefit the state and the private sector. In reply, Finance Ministry Surendra Pandey gave assurances that the government would incorporate in the upcoming budget the suggestions made by the private sector.

● Worried clients throng NDB●

Posted on 2009-06-04
KATHMANDU: Krishna Prasad Ghimire of New Baneshwar had rosy dreams when he purchased 980 shares of Nepal Development Bank (NDB) from the secondary market a year ago. But he lost more than Rs 414,000 overnight on Wednesday after Nepal Rastra Bank decided to liquidate the troubled NDB.

"This is an unexpected blow. NDB shares have turned into scrap and are going to fetch no money," said the former bureaucrat. As Nepal Stock Exchange delisted the NDB shares, barring transactions in them, Ghimire related to myrepublica.com that he had purchased shares using his pension money.

Ghimire had purchased 490 shares at Rs 475 each and another 490 units at Rs 370 each.

Jaya Ranjit of Dallu, another purchaser of NDB shares from the secondary market, related a similar story. "I was actually planning to dispose of the shares, but as the price dipped consistently, I waited for a few more days. Unfortunately, that decision has cost me Rs 120,000," said Ranjit.

NDB´s shares were selling for Rs 126 per unit on Tuesday.

Not only Ghimire and Ranjit, thousands of shareholders of the bank have lost their hard-earned money with the winding up of the bank. Ordinary-share investors had invested more than Rs 100 million - 30 percent of total shares - in the bank.

If the fate that befell shareholders was bad, that of depositors, who had put money in the bank for safe-keeping, was worse.

Subsequent to its Tuesday-night decision, the central bank on Wednesday seized all fixed and liquid assets of the troubled bank including its accounts maintained at other financial institutions and froze all transactions by it. That prevented depositors from withdrawing their own money.

Uddhav Ghimire, a trader from Ramechhap, said he is worried about Rs 240,000 he deposited in the bank, in bits and pieces from the earnings of his small clothing business. "My plans to expand my business have been shattered with the liquidation of the bank," he said.

Like Ghimire, thousands of small depositors faced the unprecedented misfortune in the history of Nepali banking. So much so, institutional depositors such as the Employees´ Provident Fund and the Nepal Army Welfare Fund also doubt they will get their money back.

The bank had deposits of more than Rs 720 million as of mid-March 2009.

Plagued by poor financial health for years, the bank´s accumulated loss stands at Rs 678.6 million, which is higher than the promoters´ share in the bank. The central bank has said that it would be able to say who (among the depositors and shareholders) will get how much back only after the liquidator assesses the bank´s assets and liability.

Following news about the action by NRB, hundreds of worried depositors and shareholders thronged NDB´s head office at Heritage Plaza to inquire about their money and investments. NDB had put up a notice at its main gate stating that all transactions have been put on hold as NRB had taken control over its fixed and movable assets.

The bank depositors, meanwhile, have formed a ´Nepal Development Bank Victims Association´ to press NRB to take the initiative for protecting their deposits. They have announced a sit-in at NRB on Thursday.

Likewise, our correspondent in Pokhara reports that the NRB regional office there has seized cash totaling Rs 10 million from NDB´s branch located at Sabhagriha Chowk.

The cash included Indian currency worth Rs 737,000. However, NRB officials said there is no need for depositors to worry about their deposits as the loans issued by the bank in Pokhara are double the deposits.

Yan Singh Rai, manager at NRB, said NDB has deposits of Rs 30.7 million and loans of Rs 77.26 million. "So, the depositors need not worry about their money, as recovery of the loans will easily enable the bank to return money to depositors," Rai said.

NDB has about 500 depositors in Pokhara. NRB also closed NDB´s ATM located at Amarsingh Chowk.

● Taxmen flee irate herb collectors●

Posted on 2009-06-04
MUGU: Yarsagumba hunters in Mugu have refused to pay the entry fee to the forest where the herb grows and sent government tax collectors running for their lives.

Around 7,000 yarsagumba collectors protested and threatened the taxmen who had reached the site with death forcing them to return empty-handed.

District forest officer Shyam Lal Mahat said the district administration lost around Rs. 5.7 million in revenue as a result. The team of 13 revenue collectors had reached Sirani Chaur following an agreement with all the stakeholders to fix the entry fee at Rs. 300 each for local yarsagumba collectors, Rs. 800 for those from neighbouring villages and Rs. 1,000 for herb hunters from outside the district.

Jiban Kumar Malla, a member of the team, said they fled for their lives when herb collectors, instigated by local Tamangs, refused to pay the entry fee and started pelting them with stones. Jagat Bahadur Rokaya, secretary of the Mugu VDC, said the dispute arose when the yarsagumba collectors demanded to see the report of the fees collected previously and where they had been invested. He said that locals of Mugu and herb collectors had been charging that the taxes raised from yarsagumba were being misused.

Rokaya said that Rs 5.7 million was collected as revenue from yarsagumba collectors last year. He added that the district´s sole source of revenue had been halted.

Keshar Bahadur K.C., chief district officer, said that the same problem had arisen last year, and revenue collectors should have coordinated with the locals before going to collect taxes.

● Experts dither, new budget left in limbo●

Posted on 2009-06-04
KATHMANDU: The delay in government formation has affected preparation of new budget for the new fiscal year beginning mid-July. An expert team formed by the Finance Ministry for new budget has refused to accept appointment letter despite request from the Ministry on Wednesday.

According to a Finance Ministry source, the team members refused to accept the letter until the government formation takes final shape. But they have started participating in the informal meetings.

The team members comprise Yuvaraj Khatiwada, Gobinda Bahadur Thapa, Puspa Raj Kandel, Ram Chandra Tamrakar, Keshav Acharya and Bhim Neupane. Khatiwada and Neupane were former members of the National Planning Commission. Acharya and Thapa were former executive directors at Nepal Rastra Bank.

The expert team are in wait and watch mode as Prime Minister Madhav Kumar Nepal has said Surendra Pandey´s appointment as Finance Minister is a stop-gap arrangement. "We´ve not received the letter yet," said Acharya. The previous government had announced that they would issue the budget by June.

● Foreign currency reserve touches Rs 276b●

Posted on 2009-06-04
KATHMANDU: Nepal´s foreign currency reserve has grown by more than a quarter over the first nine months of 2008/09, passing the Rs 276 billion mark mid-April 2009.

The reserve was Rs 212 billion in mid-July 2008. Nepal Rastra Bank (NRB) has attributed the rise mainly to the strong inflow of remittances and sound growth of third country export earnings during the period.

During the period, net transfer of workers´ remittances had swollen by more than 60 percent touching Rs 150 billion.

The strong reserve growth of reserve in rupee terms can also be partly explained by depreciation of the Nepali currency vis-à-vis the US dollar. Nepali currency devalued by 18 percent during the period. Otherwise, in dollar terms, the reserve actually only grew by about 12 percent, totaling US$ 3.46 billion.

NRB data further shows that the reserve of convertible currency expanded by more than 37 percent during the period and touched Rs 249 billion, which made up 90.3 percent of the total reserve.

Reserve of inconvertible currency, meanwhile, shrank by more than 13 percent during the period and dropped at Rs 26.80 billion. As a result, the share of inconvertible currency dipped to about 9.7 percent in the total reserve.

The central bank attributed the drop in inconvertible currency mainly to soaring imports and a rise in the trade deficit with India. During the first nine months, Nepal´s imports from India had valued Rs 115.64 billion and the trade deficit widened with it to reach Rs 84 billion.

To meet Indian currency requirements, the central bank purchased over Rs 53 billion worth of Indian currency (IC) during the period. For the purpose, it sold US$ 1.11 billion.

Moreover, NRB data shows that of the total reserve, foreign currency holding with the central bank grew by 29 percent to Rs 219 billion during the period. Of that, convertible currency holding was Rs 195 billion, while inconvertible currency holding was about Rs 23 billion.

Likewise, foreign currency holding with the commercial bank also soared by almost one third over the first nine months of the current fiscal year.

According to NRB data, foreign currency holding of commercial banks totaled Rs 57 billion during the period, of which about Rs 54 billion was convertible currency and Rs 3 billion was inconvertible currency.

The central bank has reported that the present gross foreign currency reserve is sufficient to finance merchandise imports for more than a year.

● NEPSE into swing mode●

Posted on 2009-06-04
KATHMANDU: The Nepal Stock Exchange (NEPSE) on Wednesday fell by 3.39 points to end the day´s trading at 699.62 points. The sensitive index, meanwhile, witnessed an increase of 0.39 point.

Wednesday´s total turnover amounted to Rs. 84.755 million while the total number of shares traded stood at 154,059 units. About 64 scripts were traded.

Shares of 19 commercial banks were traded on Wednesday with the stock prices of four banks showing an increase. Standard Chartered Bank led the pack with an increase of 124 points in its share price while Nepal SBI Bank lost the most on the floor with a 44-point decline.

Among the 16 development banks whose shares were traded on NEPSE, six saw their share prices go up. Central Bank´s decision to liquidate the Nepal Development Bank had negative impacts on the share price of development Banks. Development bank sub-indices went down by 5.06 points. The top gainer among development banks was Malika Bikas Bank whose stock rose 37 points while Clean Energy Development Bank was the biggest loser with its stock shedding 28 points.

Likewise, shares of about 24 finance companies changed hands on Wednesday. Annapurna Finance Company came out tops with a gain of 25 points while Standard Finance and Kaski Finance saw a drop of 32 points each.

The top gainers on NEPSE were Siddhartha Insurance CompanyShikhar Bittiya Sanstha, Chhimek Bikas Bank, Malika Bikas Bank and Annapurna Finance Company. Meanwhile, the top losers on Wednesday were Standard Finance Nepal Bangladesh Bank, Siddhartha Bank, Pashupati Development Bank and Kaski Finance.

In terms of total turnover, Standard Chartered Bank stood on top with a turnover of Rs. 14.850 million.

Meanwhile, NEPSE on Wednesday suspended the trading of Nepal Development Bank (NDB) shares. NEPSE´s action came after Central Bank announced the liquidation of NDB.

● Butwal Industrial Area to expand its territory●

Posted on 2009-06-04
BUTWAL: The Butwal Industrial Area (BIA) is planning to expand its territory because more and more industries are setting up their bases here. BIA has proposed the inclusion of a total of 540 ropanis of vacant land located in the southern and northern parts of the industrial area in its domain.

BIA Management Limited has already forwarded the request to the industries ministry. “Once the cabinet of ministers takes a decision to this effect, BIA can move ahead with its expansion plan,” Subash Sitaula, manager of BIA Management Limited told Republica.

Spread over 434 ropanis of land, BIA has 67 industries inside its territory. Of these, 56 are in operation, six are under construction and five have remained closed.

But as more and more industries in the eastern Tarai region are migrating to this industrial area, the pressure is increasing on the industrial area here, and thus the expansion plan.

Many of the industries that are moving here are doing so because of the worsening situation in eastern Tarai. “The armed forces have created havoc in eastern Tarai, instilling fear among industrialists; the security is much better here,” Ejaj Alam, president of Rupandehi Industries Association said. The commitment expressed recently by police here to further improve the security situation has also encouraged industrialists to open industries in Butwal.

Another reason that is creating an influx in BIA is skyrocketing land prices. In BIA, industrialists can lease the land for a certain period of time, which means initial investment costs will be lower compared to opening an industry elsewhere, especially at a time when land prices are going up. Good infrastructure, like road and sewage facilities, and sound public utility services like electricity and water, are also other reasons that are pulling industrialists to BIA. The recent decision by the Nepal Electricity Authority to not enforce load-shedding in industrial areas is also considered another reason that is pulling many to the industrial area in Butwal.

● Govt to systematize workers export to Israel●

Posted on 2009-06-02
KATHMANDU: Responding to Israel´s concern over rising irregularities in the worker export process, the government has decided to take strong steps to monitor and systematize the process.

The steps are being taken in a bid to reopen jobs in Israel after the country stopped granting working visas to Nepalis for the last three months, expressing objections over growing malpractice in the recruiting process.

"We are taking steps through a six-point action plan to regularize the worker sending process and make different institutions responsible for the welfare of workers," Purna Chandra Bhattrai, joint secretary at the Ministry of Labor and Transport Management (MoLTM) told Republica.

Bhattarai said the work plan mainly aimed to minimize incidents of cheating and manpower agencies charging exorbitant fees from jobseekers.

Although the government has set a maximum charge of Rs 240,000 for Israeli jobs, manpower agencies have been collecting up to Rs 800,000, citing they have to pay a huge commission to local Israeli agents.

The MoLTM has also formed a high-level panel comprising of representatives from the Foreign Employment Promotion Board, Department of Foreign Employment, foreign employment agents, and an Israel-based Nepali mission to find the ways to minimize the irregularities pointed out by Israel.

Bhattrai, who is also co-coordinator of the panel, said the government will extend relief to jobseekers by strongly enforcing the government-set service charge and establishing transparency in sending Nepali workers to Israel.

In a bid to check Nepali workers from working as manpower agents, the government is making it mandatory to send workers through the institutional way involving manpower agencies, said Bhattrai. Enhancing skills of Nepali workers through job-related training is also included in the plan.

The action plan also makes it mandatory for agencies to obtain documents attested by the only Nepali embassy in Israel. This is expected to check the present rise in incidents of submission of fake documents by the manpower agents to acquire permission to work from the Department of Foreign Employment. So far, the notary public, the local chamber of commerce and the Nepali mission have been recognized as authorized agencies to prove the authenticity of the document.

Once the action plan comes into effect, officials are optimistic that Israel will retake Nepali workers.

In response to Israeli concern over increased malpractice in sending Nepali workers to Israel, the MoLTM and the manpower agencies have agreed upon a code of conduct for employment agents.

An estimated 12,000 Nepali workers, of which more than 80 percent are women care takers, currently work in the prosperous West Asian nation.

● SEZ high on priority, but not on action●

Posted on 2009-06-02
KATHMANDU: The country´s long-running program to set up a Special Economic Zone (SEZ) to support export industries and give impetus to foreign trade still remains elusive because the government has failed to garner political support for enacting the SEZ Act. That act is necessary for operating the zones.

The SEZ program, which had first featured in the government´s budget 17 years ago, had moved close to materialization when the Maoist-led government a few months ago endorsed the Act through the cabinet and announced that it would enacted through an ordinance.

The then minister for Industry, Astalaxmi Shakya, had declared that once the law was enacted, she would instantly inaugurate the first SEZ developed in Bhairahawa.

“But the government has changed and all that process has gotten derailed,” said an official at the SEZ Project, a special wing in the Ministry of Industry (MoI).

The newly appointed finance minister, while talking with Republica, has said that the new government will give SEZ implementation a high priority. However, given that the upcoming Budget Session of parliament will focus on the government´s other policies and programs, project officials rule out the enactment of the much-needed law before six months.

For the last one-and-a-half decade, the governments have in their budget speeches and programs always deemed the SEZ program a high priority. And these governments include governments headed by the Nepali Congress, the CPN (Unified Marxist Leninist) and the United CPN (Maoist), that is, all the three major political parties that together are massively represented in the present Constituent Assembly.

“But, unfortunately, as soon as the political leaders shift to the opposition bench, they do not agree with the program,” said the official, lamenting that such behavior on the part of the political leaderships has rendered meaningless the millions of rupees of taxpayers´ money that the government spent on the SEZ.

The government has already spent over Rs 250 million in Bhairahawa, where the zone is almost complete , on half of the allocated 54 ropanis of land. This SEZ is estimated to eat up an additional Rs 250 million by the time it is completed.

Likewise, the government has already allocated a Rs 100 million budget for acquiring 61 hectares of land in Panchkhal for developing an SEZ there that would boost Nepal´s trade with Tibet and mainland China.

The government is also mulling over acquiring 200 hectares of land each in Jhapa and Dhangadi and is planning to spend over Rs 300 million on land acquisition alone. The largest SEZ, in Simara, close to Birgunj, where land development work has already started on 550 hectares of land, is estimated to cost over Rs 5 billion.

The price of the land alone on this site stands over a billion rupees, according to the project office. “Thus, the government, on the one hand, is spending billions of rupees of its hard earned money for SEZ development, but, on the other, it has done nothing to enact the much-needed law and to operationalize SEZ,” said the source.

The governments have pushed for the creating of the SEZ, because apart from promoting export and providing for labor flexibilities, the SEZ could help lure foreign investment in the country as well.

But in the absence of a law that backs these projects, the project office has not been able to respond openly to the 19 large-scale industries, including Nike Corp´s Korean manufacturing unit, that have an submitted expression of interest to set up plants in the SEZ in Bhairahawa.

Industries such as the 19 mentioned above have supported plans like these because of the attractions they offer industries. In the draft of the SEZ Act that the MoI had forwarded to the cabinet in 2006, there were provisions for lowering customs duty, and provisions for VAT exemptions and tax holidays to be given to industries in an SEZ. The draft also restricts workers from launching strikes that obstruct production and hamper industrial operations. In return, it provides for higher salaries, insurance coverage, child-care and other facilities to the workers in an SEZ.

● NEA under pressure over 250 MW purchase●

Posted on 2009-06-02
KATHMANDU: Nepal Electricity Authority (NEA) is under tremendous pressure to take an immediate decision regarding a 250-MW power purchase from India. A decision in this connection, according to NEA sources, would have to be taken within the next two weeks as the Power Trading Corporation (PTC) of India is becoming ´impatient.´

“A bold decision has to be taken in this regard within two weeks as we are already facing pressure from PTC,” an NEA official told Republica.

NEA is currently undertaking an impact study for the power purchase, which may range anywhere between 200 MW and 400 MW on a long term basis, with the power to be made available by April 2012, the official said.

A high-level agreement between the two countries is also likely before the purchase deal materializes.

“We have said for quite some time now that an agreement on the grid system at government-to-government level should be in place for the project to materialize soon. The government of Nepal can even request the Indian government to construct the 39 km transmission line on the Nepal side of the Dhalkebar-Muzzafarpur corridor,” the source added.

The project is contingent upon completion of the high voltage cross-border transmission lines. As per the proposal, India will construct 140 km of transmission lines up to the Nepal border and Nepal should construct the 39 km this side of the border.

The cost of the proposed project is estimated at Rs 16 billion. Infrastructure Leasing & Financial Services (IL&FS), which had taken the initiative for development of the Indo-Nepal transmission project, is now facing difficulty getting the project financed. Two joint venture companies - Cross Border Power Transmission Company Pvt. Ltd. and Power Transmission Company Nepal Ltd. - were incorporated for implementation of the project.

Asked to comment on the issue, PTC officials said that they are still waiting for a response from NEA. “NEA has not responded to the proposal yet. We are waiting for a final answer soon,” Harish Saran, Vice-President of PTC, told Republica.

500 MW tale:
Meanwhile, the much-talked about import of 500 MW of power from India has turned out to be just rumor, as NEA had never approached PTC with such a proposal.

“PTC has not been approached for the 500 MW power purchase,” an Indian embassy official confirmed.

NEA first corresponded with PTC in October 2008 for the import of 200 MW from India for a period ranging from five to 25 years. PTC then proposed 200 MW for five to 15 years. The cost quoted was IRs 4.50 for five years and IRs 3.25 for 15 years.

“All talk of 500 MW for a period of 25 years has been limited to date to the Internal Development Board of NEA. We never made a formal request in that regard to PTC,” the NEA official said.

● Immediate growth in mergers unlikely●

Posted on 2009-06-02
KATHMANDU: Nepal Electricity Authority (NEA) is under tremendous pressure to take an immediate decision regarding a 250-MW power purchase from India. A decision in this connection, according to NEA sources, would have to be taken within the next two weeks as the Power Trading Corporation (PTC) of India is becoming ´impatient.´

“A bold decision has to be taken in this regard within two weeks as we are already facing pressure from PTC,” an NEA official told Republica.

NEA is currently undertaking an impact study for the power purchase, which may range anywhere between 200 MW and 400 MW on a long term basis, with the power to be made available by April 2012, the official said.

A high-level agreement between the two countries is also likely before the purchase deal materializes.

“We have said for quite some time now that an agreement on the grid system at government-to-government level should be in place for the project to materialize soon. The government of Nepal can even request the Indian government to construct the 39 km transmission line on the Nepal side of the Dhalkebar-Muzzafarpur corridor,” the source added.

The project is contingent upon completion of the high voltage cross-border transmission lines. As per the proposal, India will construct 140 km of transmission lines up to the Nepal border and Nepal should construct the 39 km this side of the border.

The cost of the proposed project is estimated at Rs 16 billion. Infrastructure Leasing & Financial Services (IL&FS), which had taken the initiative for development of the Indo-Nepal transmission project, is now facing difficulty getting the project financed. Two joint venture companies - Cross Border Power Transmission Company Pvt. Ltd. and Power Transmission Company Nepal Ltd. - were incorporated for implementation of the project.

Asked to comment on the issue, PTC officials said that they are still waiting for a response from NEA. “NEA has not responded to the proposal yet. We are waiting for a final answer soon,” Harish Saran, Vice-President of PTC, told Republica.

500 MW tale:
Meanwhile, the much-talked about import of 500 MW of power from India has turned out to be just rumor, as NEA had never approached PTC with such a proposal.

“PTC has not been approached for the 500 MW power purchase,” an Indian embassy official confirmed.

NEA first corresponded with PTC in October 2008 for the import of 200 MW from India for a period ranging from five to 25 years. PTC then proposed 200 MW for five to 15 years. The cost quoted was IRs 4.50 for five years and IRs 3.25 for 15 years.

“All talk of 500 MW for a period of 25 years has been limited to date to the Internal Development Board of NEA. We never made a formal request in that regard to PTC,” the NEA official said.

● Eight medical stores face license suspension●

Posted on 2009-05-28
KATHMANDU: The government has suspended operating licenses of eight medical stores in the country for failing to keep official invoices of medicines purchased from distributors. The Department of Drugs Administration, the country´s drug regulatory body, became aware of this malpractice during inspections that it conducted in major districts of the country.

As per the government rule, all medical stores must keep documents that prove medicines being sold from their shops were purchased from authorized distributors. Stores that fail to produce the proof of purchase at the time of inspection are asked to submit a written explanation mentioning the reason. “This is to ensure circulation of genuine medicines and not the fake ones illegally imported into the country,” Prakash Sharma, the DDA´s pharmacy inspector, told Republica.

Initially, the stores, whose operating licenses were suspended by the DDA, were also asked to furnish explanations. “But they disregarded the instruction, as a result of which we had to temporarily close down the shops,” Sharma said. The government can suspend operating license of medical stores for up to six months if they fail to produce official invoice of drugs that they have purchased.

During the inspection of medical dispensaries, the DDA had also found that many were running their shops without taking permission from the government, while others had failed to renew registration certificates. Some of the stores had also failed to keep sales records of medicines that are at risk of being abused and in other cases untrained store assistants were caught selling medicines. As per the government rule, medical stores should be run by trained pharmacists, trained assistant pharmacists or entrepreneurs, who have received formal training from government-recognized institutions.

For failing to abide by the government rules, the DDA has issued written warnings to 36 medical stores and 99 other medical stores were given verbal warnings. “We will resort to harsh measures like suspension of operating licenses if those stores repeat the mistakes,” Sharma said. So far this year, the DDA has inspected around 680 medical shops in 20 districts in the country.

At present, around 15,000 retail medical outlets have registered themselves with the government, of which around 2,500 retail stores are operating in the Kathmandu Valley.

● FDI commitments down to Rs 5.5b●

Posted on 2009-05-28
KATHMANDU: Foreign direct investment (FDI) commitments plummeted to Rs 5.53 billion in the first nine months of the current fiscal year as the country braced for the double whammy of power shortage and unrest in the Tarai belt. Last year in the same period, the country had received FDI commitments of Rs 7.96 billion.

“Lengthy load-shedding hours every day and frequent strikes in the Tarai are the main reasons for the decline,” a high-ranking official, of the Department of Industry, requesting anonymity, told myrepublica.com. Investors feared that the power crisis faced by the country would result in greater usage of other energy sources, subsequently raising overhead costs. Furthermore, protests in southern Nepal--a key export-import point--raised the chances of there being more obstruction in the movement of raw materials or finished goods that have to be imported into or exported out of the country.

Although these fears resulted in significant downturn in FDI commitments, the figures of this year are higher than that of the year before last and earlier. Besides, the country also received more project proposals this year compared with the whole of the last fiscal year.

This year, the country received proposals for 150 projects from 29 different countries, with India topping the list. Nepal´s southern neighbor has proposed that it will invest Rs 2.34 billion in 28 different projects. China comes second with proposals for 51 projects worth Rs 875.24 million. Singapore then follows with proposals for four projects worth Rs 564.50 million.

If all the projects proposed by foreign investors come into operation, 8,305 additional employment opportunities will be created in the country.

The statistics provided by the Department of Industries show that most of the investments are going into the energy sector, followed by manufacturing. Foreign investors have proposed to invest Rs 2.20 billion in the energy sector and Rs 928.14 million in the manufacturing sector. However, in terms of job creation, the minerals sector tops the list. A total of 2,635 jobs will be created in this sector if all the projects worth Rs 474 million come into operation.

Nepal had received the highest FDI commitments, of 9.81 billion rupees, in the last fiscal year, as a housing boom and the newly explored potential for hydropower ventures lured overseas investors.

The Department of Industry had called the windfall “a sound peace dividend in foreign direct investment.”

● Nepal seeks tariff concessions for agro-goods●

Posted on 2009-05-28
KATHMANDU: Nepali and Bangladeshi officials are convening in Dhaka on Thursday for trade talks, during which the two sides will discuss establishing a preferential bilateral trading arrangement and simplifying movements of goods in respective markets.

"The talks will revolve around duty concessions and establishing connectivity - two crucial issues that need serious attention if we are to give impetus to bilateral trade," Surya Silwal, joint secretary and leader of the Nepali trade team, told Republica prior to leaving for Dhaka.

Bangladesh is Nepal´s second largest trading partner in South Asia, but bilateral trade is restricted by a heavy tariff barrier. For instance, Bangladesh imposes a customs duty of up to 40 percent on agricultural produces - the main export items of Nepal.

Traders said the high duty structure has largely deterred Nepali exports. The government, meanwhile, has requested Bangladesh provide a duty-free entry facility to 140 groups of Nepali commodities.

"During the talks, Nepal will mainly push for the duty-free facility for its agricultural and agro-based commodities in Bangladesh," said a source.

However, the Nepali team will have no option but to deny Bangladesh a similar facility that it has sought for its manufactured goods, such as cement, machinery and transformers.

The denial comes as a result of the fact that a Nepal-India bilateral trade treaty restricts Nepal from extending more facility to other countries than what it gives to India. And Nepal has not extended its duty free facility to the Indian manufactured goods.

"So, our efforts will be to get the duty free facility for agricultural goods by offering Bangladesh a facility close to what we extend to India," said a source.

The officials will also discuss various mechanisms for allowing entry of Nepali goods carriers in Bangladesh, so that the country could utilize Mangla Port, which Bangladesh has offered to it for the third country trade.

Apart from up to Mangla Port, Nepal has also requested Bangladesh allow its goods carriers to move in the major cities as well.

Presently, Nepali vehicles are allowed to move up to a dry port in Banglabandh, which is situated around 1 kilometer inside the Bangladeshi side of the border. But Indian customs do not allow Nepali vehicles to cross through the border. This has prevented Nepal from making use of the facility.

Sources stated that existing problems along the Kakarbhitta-Phulbari-Banglabandh transit route, which involve Nepal, India and Bangladesh, could be addressed only through tripartite talks.

Nonetheless, in Thursday´s talks the two sides will focus on further developing the land route.

They will also talk about connecting the Rohalpur-Singhbad railways network between Bangladesh and India to Birgunj dry port in Nepal. Traders have argued that should this railway connectivity be established, it would ease bilateral trade greatly.

● BoK files petition against NRB action●

Posted on 2009-05-28
KATHMANDU: A director of the suspended board of the Bank of Kathmandu (BoK) has lodged a petition at the Supreme Court (SC) against the decision taken by Nepal Rastra Bank (NRB) to suspend its executive board.

Director Dipak Narsingha Shrestha filed the petition on Tuesday, pleading with the apex court to annul the central bank´s decision and to allow the executive board to resume normal operations. In the petition, Shrestha also requested the SC to annul the decisions that the new NRB-appointed board might have taken after taking control of the bank´s management.

The central bank had suspended the board of BoK and taken control of its management on May 20, amid deepening disputes among the promoters of the bank. The action was taken on the basis of a charge that the board had failed to safeguard the interests of the bank´s promoters and depositors.

The central bank had sent a four-member NRB board led by Director Laxmi Prapanna Niraula to manage the bank. The petition has named Niraula the defendant.
Prior to the action, the central bank had sought clarification from the BoK board over its decision to remove Radhesh Pant from the post of Managing Director (MD) after it was convinced that due processes were not followed in his removal from the post.

However, in its reply to the NRB, the BoK board had questioned the central bank´s jurisdiction over its enquiring into the decision taken by a bank´s board.

● Realty prices face heat of slowed transactions●

Posted on 2009-05-27
KATHMANDU: Realty prices in the Kathmandu Valley, which soared at an unprecedented rate over the last few years, could soon spiral down, indicate affairs in the market.

The records of the land revenue offices in the Valley show that compared to the past few months, the number of land transactions have plummeted to as low as half the earlier numbers. And land developers say the slowdown has started to make them wary.

In a bid to aggressively dispose of the plots they developed at the prevailing rates, some developers have even resorted to unveiling interesting promotional schemes.
For instance, on May 16, Bhim Lama, a developer in Tikathali took out an advertisement that said that he would give a 200 CC Pulsar to the first buyer of his land and also lower-CC bikes to other buyers. "The slowdown has deepened for the last one month. Thus it was wise to aggressively push the sales now, rather than later," Lama told myrepublica.com.

Interestingly, he was not the first one to come up with such a scheme. "I went for the scheme after I saw a couple of such advertisements for plots in the newspapers," he added.

Officials at Department of Land Reforms and Management stated that the transactions slowed down mainly in the wake of the banks´ stopping loans in the sector, the decline in the growth of remittances and because buyers speculated that the realty market had overheated and that prices could crash soon.

"People have preferred to put a hold on their purchase plans. For example, the number of transactions at the Chabahil Land Revenue Office (LRO), which used to cross the 400 mark every day, has dropped to half," said Amrit Kumar Karmacharya, chief of the office.

A similar trend is at play in Kalanki, Bhaktapur and Lalitpur.

The slowdown has also caused the revenue collections of the LROs to drop in the recently concluded tenth month of the fiscal year, compared to the ninth and previous months of the fiscal year.

According to Karmacharya, revenue collections at Chabahil dropped to 40 percent of the earlier volumes, over the past one month. The collections of other offices too have plummeted, within a range of 15-25 percent, according to the statistics of the Department of Land Reform and Management.

"The slowdown has not dragged down prices so far, but it could," said Jit Bahadur Shrestha of Bhimeshwor Property. "Hence, developers have lately stopped plotting their land," he added.

The transactions of and the prices of land had soared sharply over the last few years in the Valley, during which, the banks and financial institutions provided generous financing, the remittance inflow sharply increased, and as more people were forced to migrate from the conflict-hit Tarai region. Prices had more than doubled over the last nine months alone.

● Vegetables and fruits prices double in four months●

Posted on 2009-05-27
KATHMANDU: The prices of vegetables and fruits have more than doubled over four months, amid a supply deficit that resulted from the huge decline in their production.

The daily arrivals of vegetables in Kalimati market--the largest vegetable wholesale center--has dropped to an average of 400 tons, from 650 tons, as major vegetable-producing districts are now producing less vegetables than they used to before. During the long drought of the past winter season, the vegetables farms that didn´t have irrigation facilities could not cope well.

“Farmers failed to plant vegetables in time during the winter. The late plantation, together with the subsequent long dry season, pushed the vegetable production down,” Binaya Shrestha, planning officer at the Kalimati Fruit and Vegetable Market Development Board told myrepublica.com.

According to the board, the price of tomatoes has almost doubled to Rs 30 per kg as compared to the price recorded in the last week of January. The price of potatoes has also ballooned to Rs 38 over the same period, from Rs 14 per kg over the last week in January.

Other popular vegetables, such as carrots, cabbages and cauliflowers, have also had their prices go up significantly. Only the price movement of dry onions followed a deviant path--the price almost halved to Rs 18 per kg.

The scarcity of vegetables in the market, which led to the higher prices, has been further compounded now. Traders say that some of the major vegetables sourced from India have not entered the capital for the last couple of weeks, and the inflow of vegetables produced in key districts of Tarai has also plunged.

“Potatoes have now completely stopped arriving from India because India is also facing a shortage due to the lower production there during last winter,” said Bharat Uppreti, a wholesaler of potatoes and onions in Kalimati market.

“And it´s not only Kathmandu Valley that´s suffering. Even towns along the India-Nepal border are reeling because of the shortage of Indian potatoes.”

With the decline in the volume of potatoes arriving from India, the Kathmandu Valley is depending on potatoes sourced from neighboring places around the city, such as Nala, Banepa, Mudhe, Jiri and Panauti.

And that´s not all. The prices of fruits too are skyrocketing. The prices of apples and bananas also shot up to Rs 100 per kg and Rs 45 per dozen, from Rs 75 per kg and Rs 25 per dozen, respectively. Similarly,the price of oranges also rose to Rs 30 per kg, from Rs 16 four months ago.

● NOC profits Rs 400m●

Posted on 2009-05-27
KATHMANDU: As global oil prices inch up, the import price of petrol and diesel has also risen, shrinking the loans repayment capacity of Nepal Oil Corporation (NOC). This, however, will have no impact on prices, clarified officials.

The NOC´s latest import price and turnover shows that the corporation is still earning a profit of about Rs 400 million a month. “However, the amount will fall short of Rs 150 million for us to meet our monthly debt servicing obligations,” said Mukunda Dhungel, NOC spokesperson.

Going by the corporation´s debt servicing commitment, it needs to pay Rs 500 million in principle and Rs 50 million in interest to its lenders.

NOC profits shrank mainly after the import price of petrol increased by Rs 3.28 and diesel by Rs 2.85 per liter this month.

Under the existing pricing structure, the corporation´s profit on petrol and diesel stand at Rs 11.72 and Rs 3.65 per liter, respectively. In order to stand by its loans repayment plan, the corporation had otherwise set aside a profit margin of Rs 15 per liter of petrol and Rs 6.50 per liter of diesel.

The shortfall, however, will have no bearing on prices, Dhungel told myrepublica.com, adding that the situation was still well within the NOC´s control.

From the profits, the corporation reaped by fixing domestic prices at a higher level. It has served loans of Rs 4.59 billion to the government and financial institutions over the last six months.

The corporation that had gone technically bankrupt during the high oil price era that lasted some four years had outstanding loans worth Rs 15.96 billion to clear about six months ago.

Over this period, it paid about Rs 2 billion to the government, Rs 1.80 billion to banks, about Rs 700 million to the Citizens Investment Trust (CIT) and Rs 150 million to the Employees Provident Fund (EPF).

“Now our loans liability stands at Rs 11.35 billion, including Rs 8.16 billion to the government, Rs 986 million to CIT and Rs 2.20 billion to EPF,” said Dhungel.

The corporation borrowed the money to finance petroleum imports, as the government did not adjust domestic oil prices in line with the international trend. Nepal had suffered an oil loss of about Rs 21 billion during the span of that four years.

● 170 agencies to send trainees to Japan●

Posted on 2009-05-27
KATHMANDU: The Ministry of Labor and Transport Management (MoLTM) has designated 170 manpower agencies to send Nepali trainee workers to Japan.

Nepal signed an agreement with Japan International Training Co-operation Organization (JITCO) last year to provide opportunities to Nepali workers to work in Japanese enterprises as industrial trainees.

JITCO contributes to human resource development in developing countries by supporting international trainees and technical interns to come to Japan.

The MoLTM invited applications on two occasions, January 20 and March 2, from Nepali manpower agencies seeking authorization from the government to be involved in the process. Responding to the government´s call, a total 195 agencies expressed interest.

“We have finalized a list of 170 qualified manpower agencies to send workers to Japan. We will provide a list of designated manpower agencies to JITCO soon. Concerned manpower agencies will attempt to bring demands of trainee workers from Japan through JITCO,” said Purna Chandra Bhattrai, joint secretary at the MoLTM.

As per Foreign Employment Regulations, the firms will be selected on the basis of the number of overseas workers they have sent in the past, the existence of their contact offices in five regions, their previous moral records, the companies financial, physical and human resources, their contribution to the national coffer in the past, as well as other criteria.

The government signed an agreement with JITCO -an undertaking of the Japanese government - last year to send Nepali trainee workers through government-designated manpower agencies.

Under a similar agreement with JITCO signed in 2003, the Federation of Nepalese Chambers of Commerce and Industry (FNCCI) recently sent six women interns to work in Japanese garment industries. The trainees will remain in Japan for three years in paid internship, and will have to rejoin the Nepalese organizations they represent on return to Nepal.

● Israel positive about receiving Nepali workers after new code of conduct●

Posted on 2009-05-26
KATHMANDU: The Israeli embassy in Kathmandu has shown a positive response towards Nepal´s request to restart the long-stalled working-visa process for Nepali workers.

The latest move from the Israeli embassy came after the Ministry of Labor and Transport Management (MoLTM) sent a formal letter this week in which the ministry made a commitment to minimizing the rampant irregularities seen in the recruiting process for Nepali workers going to Israel.

It´s been about two months since Israel has stopped granting fresh working visas to Nepalis, on the grounds that the Israeli government has serious objections over the irregularities and the lack of transparency in the recruiting process.

“We are hopeful that the process of sending Nepali workers to Israel will begin soon because the Israeli embassy has responded affirmatively to our request to reopen the Israeli job market to Nepalis,” said Purna Chandra Bhattarai, joint secretary at the MoLTM.

In a response to the letter sent by the MoLTM, the Israeli embassy has urged the Nepali government to come up with many changes: the government must establish a system that ensures transparency; the government must stop the manpower agencies and Israel-based brokers of Nepali origin from exploiting Nepali workers and charging the job seekers exorbitant fees (the Israeli government has been harping on this issue for a long time now); and the government must ensure that the manpower agencies in Nepal levy the correct charges as have been specified by the governments of Nepal and Israel.

The Nepali has fixed the amount that manpower agencies can charge job aspirants at US$3400, while the Israeli government has set the amount at US$1500. But job aspirants say that manpower agents have been charging triple the amount fixed by the Nepali government.

To ensure fair practice in the recruiting process, the MoLTM and the concerned manpower agencies have agreed on a code of conduct, which should help Nepali agencies get into Israel´s good books again.

As per the 19-point code of conduct, both the MoLTM and the agencies say that among other measures to ensure the welfare of workers, they have agreed to initiate visa procedures only for those workers who have attended a job-related training, the standard of which has been determined by the Nepali government; to send workers only after they have completed a labor agreement with their employers in Israel; to discourage unhealthy competition among manpower agencies in the hiring process; to ensure that agencies do not charge more than the amount fixed by both governments; and to provide full information to the Nepalese embassy and human rights workers about the facts on the ground in Israel.

Israel is the most favored labor destination, in terms of remuneration and security available, among Nepali workers (mainly women caretakers). It´s estimated that about 12,000 Nepali workers are working in Israel as caretakers and agricultural workers.

● Koshi repair work pace tardy●

Posted on 2009-05-26
KATHMANDU: Reconstruction of damaged spurs of the Koshi River is going on at snail´s pace and is unlikely to be completed before monsoon, an official said, expressing fears that the river might wreak havoc this year as well.

Mahendra Gurung, director-general at the Department of Water-Induced Disaster Prevention (DWIDP), said two out of the five damaged spurs have been reconstructed till date because of tardy pace of work on the part of Basistha and Basistha, the Indian company responsible for reconstruction and repair work of the damaged Koshi embankment, and other obstructions.

Though the Indian government had pledged to complete reconstruction work by the last week of March, 2009, the deadline was extended to the last week of April and again till May in view of frequent obstructions.

“Due to a number of reasons, including slow pace of work on the part of the Indian contractor, the reconstruction work is likely to be completed by June 15,” said Gurung, adding, “If the spurs are not constructed before monsoon, the Koshi is likely to wreak havoc this year

as well.”

The team must construct five spurs along a 1,700-metre stretch to tame the river before the monsoon sets in. Spurs help embankment control water current, minimise flood hazards and protect the embankment.

Meanwhile, a team of DWIDP officials said in a report that reconstruction work is not satisfactory. The team was deployed at the site after reports of the river breaching the Koshi embankment in three places in Sunsari district surfaced two weeks ago. The three breached points are plugged, the report states.

The Koshi was diverted to its original course towards the Koshi Barrage on January 26. The river breached its embankment at West Kushaha on August 18 last year and flowed eastward through settlements in Sunsari district, subsequently displacing thousands of people in Nepal and hundreds of thousands in Bihar state of India.

As per the Koshi Agreement, India is responsible for the maintenance and operation of the 32-kilometre embankment section and the barrage.

●Waste disposal resumes Monday●

Posted on 2009-05-26
KATHMANDU: Kathmandu Metropolitan City (KMC) and Lalitpur Sub-Metropolitan City staffers began removing garbage from Monday evening after a 5-point agreement was reached with the agitating locals earlier in the day. Waste collection had been obstructed for the last six days, and of the agitating Okhapauwa locals´ 40-point demand, authorities agreed to establish a sub-committee to look after the environment in the area, include at least one person in the existing all-party alliance, clearing advances which were allocated in developmental works at the landfill site-affected area, construct the road and fulfill other demands gradually.

●ADB awards best project managers●

Posted on 2009-05-26
KKATHMANDU: The Asian Development Bank (ADB) on Monday gave away its outstanding project management team awards to three project teams in Nepal and a special recognition to one project.

The secretaries of the Ministry of Agriculture and Cooperatives, the Ministry of Physical Planning and Works and the Ministry of Education handed over the awards to the winning project teams: Road Connectivity Sector I Project, Teacher Education Project and Small Town Water Supply and Sanitation Project.

The special recognition was given to Community Livestock Development Project.

"These awards recognize the projects teams´ excellent performance, efficiency in implementation and achievements of targets--both statistical as well as on the ground", said Barry J Hitchcock, Country Director of ADB.

ADB had instituted the award in 1996, to encourage the project staff of ADB-assisted projects to improve their portfolio performance in support of the bank´s goal of poverty reduction.

Under the Road Connectivity Sector I Project, ADB is supporting the construction and upgrading of 10 feeder roads of about 490 kilometers. The roads´ expansion is expected to improve access to markets and health and education centers in rural areas.

The Teacher Education Project aims to establish an effective and sustainable teacher education system for primary education.

Likewise, the Small Town Water Supply and Sanitation Project assists the Government in providing water supply, drainage, and sanitation facilities in 29 small towns with an average population of about 18,000.

The Community Livestock Development Project aims to reduce incidence of poverty in the rural areas of 48 districts, through an intensive livestock program, livestock processing and marketing programs, and higher-altitude livelihood pilot programs.

●Capital expense, relief package feature in new FM priority●

Posted on 2009-05-26
KATHMANDU: New Finance Minister Surendra Pandey, who assumed office on Monday, stated that he would focus on gearing up capital expenditure, containing inflation and providing relief packages to the poorest section of society.

“Paltry development spending in the recent past meant that employment creation, along with the expansion of construction and development activities, all saw declines. My priority will be to correct this situation and fulfill the people´s development aspirations,” said Pandey.

He, however, did not divulge any formation about the much-needed political mechanism that´s needed at the local level to undertake development spending, a factor that was primarily responsible for poor capital spending earlier.

“The mechanism will be necessary to increase development spending, and we hope something will transpire in this connection as early as possible,” Pandey stated. With just about 50 days left for this fiscal year to end, Pandey said that his foremost priority for now will be to formulate the new budget in such a way that it makes people feel that the government is working to fulfill the people´s aspirations.

He elaborated that the new budget would be based on a common minimum program (CMP) that all the parties in the coalition government will come up with, incorporating political programs and relief packages for the people.

However, he said, as the government was still to find its final form, the CMP process would take time and so would the budget announcement.

Minister Pandey has not yet mentioned his policy towards privatization. He has not yet made strong commitments on issues like punishing tax evaders and revenue dodgers, measures that the outgoing Finance Minister had been a very vocal proponent of.

“Our focus will be mostly limited to spending enough on political programs like drafting the new constitution, the integrating of the Nepal Army and the Maoist militia, and developing physical infrastructure, which will be necessary for facilitating the effective transition of the country into federal state,” he stated.

●Govt to fix prices of 10 drugs●

Posted on 2009-05-25
KATHMANDU: The government will soon fix the prices of 10 essential drugs available in the market in a bid to provide relief to consumers who have been bearing the brunt of erratic price rises or variations.

The decision was taken as per the commitment expressed by the government in the three-year interim plan to revise and fix prices of at least 10 essential drugs. The entire task of putting ceilings on prices of some of the essential medicines will be undertaken by the Drugs Price Evaluation Committee, which is headed by the director of Department of Drugs Administration (DDA), the drugs regulatory body of the country.

Although the government was planning to start this work some time ago it had not been able to do so due to incomplete nature of the price evaluation committee. Due to this the seven-member committee, formed around one and a half years ago, had not been able to function till date. However, after the vacant position designated for consumer groups was recently filled by Rastriya Upabhokta Manch, the committee had decided to start its work. Other members of the committee include Nepal Pharmaceutical Association and Nepal Chemist and Druggist Association, among others.

"We are planning to hold the first meeting by mid-June," a DDA senior official told myrepublica.com. "The meetings held thereafter will decide on the names of medicines, whose prices have to be fixed." Currently prices of only two medicines, namely paracetamol and IV fluid, have been fixed by the government.

"Inclusion of more medicines to the list is expected to provide relief to consumers who find huge price variations on similar drugs manufactured by different companies," the DDA official said. "The decision to fix the prices will also prevent manufacturers from raising drugs prices at frequent intervals."

A snap survey conducted recently by Republica revealed that costs of some of the common medicines such as omeprazole and antibiotics like amoxicillin and ampicloxacillin, had gone up by more than 50 percent lately. It was later known that domestic drug manufacturers had raised prices, breaching the ceiling on prices put by the government.

"We are sure the manufacturers will not repeat the same mistake this time as we will monitor the prices strictly and punish those who violate the law," the DDA official said.

●Wheat woes continue. Farmers not getting good price despite shortage●

Posted on 2009-05-25
KATHMANDU: The year keeps getting worse for farmers who suffered huge losses in winter-crop production: they have been hit with yet another setback--the discouraging price of wheat in the market this year. The price of wheat in most of the major markets has either dropped or remained unchanged as compared to last year.

Farmers had hoped that their winter crops, wheat and barley, would fetch attractive prices because of the scarcity in the products brought on by the past winter´s losses and because the Indian government had banned the exporting of wheat to Nepal. How bad were the losses? In an annual crop report recently released by the Ministry of Agriculture and Co-operatives (MoAC), the ministry has stated that the production of wheat this year has dropped 14.5 percent to 1.34 million tons due to the protracted drought and meager snowfall in the hill and mountain districts. Wheat production areas declined by 1.6 percent to 694,000 hectares, from 706,000 hectares last year, and productivity also dropped by 1.3 percent.

The amount of wheat produced in Morang--a major wheat producing district in eastern Nepal--was 7,334 tons this year as compared to 42,322 tons last year, despite the rise in production area by 85 hectares.

Thus the slim hopes that the farmers had of recouping some of their losses, by selling their wheat at higher prices, didn´t seem too far-fetched. But instead, they´ve seen the retail price of wheat go down by over 15 percent in all the markets, from the Eastern to the Far-Western regions.

Traders say that wheat price wouldn´t have slid to the extent that it did if the government hadn´t stopped Nepali wheat from getting exported to Bangladesh. The government took that move to consolidate the supply of food within the country. Thus the farmers haven´t had anything go for them at all.

The farmers--throughout the nation--have had to put up with so much bad luck this year. For example, though most of the wheat farms were irrigated in Bara, Parsa and Rautahat districts, wheat production in those districts saw steep declines. Basu Dev Kafle, planning officer at the District Agriculture Development Office (DADO) in Rautahat, says wheat production in his district declined to 19,184 tons, which was a reduction of 12 percent compared to last year´s production.

The Far-Western region, which was inflicted by both a long drought and insufficient rains during the winter season, also saw declines in wheat production. And this despite the farmers´ increasing the total production area in the region, from 128,400 hectares last year to 150,850 hectares this year. With the weather turning so brutal, the farmers couldn´t produce the amount they ideally would have in the enlarged production areas. Wheat production in the region dropped to 191,701 tons this year from 192,600 tons of last year.

There was one area which was spared the ravages wrought by nature: the Tarai districts in the Mid-Western region produced marginally larger quantities. For example, 43,380 tons of wheat was produced in Banke district, up from 42,557 tons last year. But the rest of the Tarai suffered the same fate as the other badly hit regions.

And with the price trends not going their way, the Nepali farmers who barely made it through a horrible winter must now brace themselves for an equally bleak after-winter selling season.

●NTB woos Qatari tourists●

Posted on 2009-05-25
KATHMANDU: The Nepal Tourism Board (NTB) pushed the message of a safe and peaceful Nepal at the Nepal Trade and Tourism Exhibition 2009 held in Doha, Qatar from May 21-23.

The NTB joined forces with Nepal Airlines Corporation to participate in the event which was held under the aegis of the Embassy of Nepal, Qatar.

In a bid to woo Gulf travellers, the NTB also publicized Nepal´s soft adventure opportunities and the improved air connectivity between Kathmandu and the Gulf.

Chief guest Naseer Ahmad Al Meer, board member of the Qatar Chamber of Commerce and Industry, said, "I think that Nepal has great tourism potential and people in Qatar need to know about it. I also hope that the exhibition will be bigger next year with more exhibitors from Nepal."

The participating exhibitors were Nepal Tea Development Corporation, Yak and Yeti Enterprises, Bilakshana Handicraft Industry, Om Shiva Classical Woollen Centre and Woodland Import and Export. An estimated 2,000 persons visited the stalls over the three-day period.

Qataris are passionate about travelling, with informal sources saying that they spend nearly a quarter of the year vacationing in exotic locations around the world.

●UWTC back to business●

Posted on 2009-05-25
KATHMANDU: The United World Trade Centre (UWTC), the largest shopping mall in the country, is back in business after being closed for five days following a dispute between its management and shopkeepers.

The traders reopened their shutters after the management promised to provide them better security. "We have arranged additional security along with the police for safety," said Sukuntalal Hirachan, chief executive officer, addressing a press conference at the UWTC.

He accused some rent defaulters of starting the issue of theft at a mobile shop at the centre and forcing other traders to pull down their shutters."A handful of traders including Sanjay Adhikari, president of the UWTC Traders Association, forced other traders to close their shops," said Hirachan. He added that most of the protesting traders including Adhikari, who owes Rs. 3.5 million in back rent to the UWTC, had been delinquent in paying their rent.

During the press conference, the management also released a list of 46 rent defaulters. Their outstanding amounts range from Rs. 83,726 to Rs. 3.51 million.

Adhikari, who owns The Raymond Shop at the centre, said, "I do not owe such a huge amount, and 90 percent of the traders have not paid their rent because of the high rental charge," said Adhikari.

He said that 150 traders at the centre had launched a protest with a list of nine demands including efficient management, sound security round the clock, implementation of the agreements reached two years ago, sanitation and electricity and adjustment of rental charged, among others.

"We want the management to decrease the rental charge by 30 percent," said Adhikari. He charged the management of neglecting four previous cases of theft from the shops at the centre.

Hirachan said that the recent theft at a mobile shop at the centre was the first in its history. "We have identified the thieves from the CCTV," he said and promised that the police would take them into custody soon.

Last Tuesday, 18 cellphones worth Rs. 260,000 and Rs. 150,000 in cash had been stolen from UBOX, a mobile shop at the centre.

●Plan to power energy sector soon●

Posted on 2009-05-24
KATHMANDU: Water and Energy Commission Secretariat (WECS) is planning to introduce new 25-year National Energy Strategy for the country, an official said on Saturday.

Sanjay Dhungel, senior divisional engineer at WECS, said that discussions and consultations were held with stakeholders at different levels before formulating the new energy strategy draft that will be implemented soon.

“Our objective is to increase energy output and encourage the use of renewable energy by incorporating various energy sectors and at the same time integrating energy, environment and economic policies to ensure sustainable growth of the energy sector,” he said.

The government has taken a long-term approach for sustainable development of energy sectors through effective mobilisation of energy resources to ensure poverty alleviation and economic development, which include encouraging micro-hydropower projects for rural electrification and strengthening power transmission and distribution lines.

In the new energy strategy, Dhungel said, “Generation of hydroelectricity will be encouraged and prioritised as the chief energy sector needed for an overall development of the country.”

Promoting the use of electricity-run vehicles and replacing old vehicles is also one of the important agendas of the new energy strategy as an effort to curb pollution.

For economic growth, WECS has designed a strategy to attract domestic and foreign investment for the development of different energy sectors, including hydroelectricity, solar energy, biogas and petroleum products.

●Nepal eyes membership of AITIC●

Posted on 2009-05-24
KATHMANDU: The government is mulling over joining the Agency for International Trade Information and Cooperation (AITIC), an inter-governmental body of 60 countries based in Geneva, in order to secure more assistance and capacity building programs for international trade development.

The Ministry of Commerce and Supplies (MoCS) has initiated exercises in this regard, in close coordination with the Ministry of Laws.

“The step has been taken mainly as AITIC provides information and assistance to resource-constrained countries like ours, and it could be an important forum through which we can strengthen our presence in the multilateral trading system and in other international-trade-related organizations in Geneva,” said Commerce Secretary Purushottam Ojha.

According to AITIC, the agency mainly assists least developed countries (LDCs) to have more effective trade-led growth through personalized assistance, capacity-building programs and information and policy advice on the multilateral trading system.

This is not Nepal´s first attempt to join the body, though. The government, in 2003, had taken steps towards Nepal´s becoming an AITIC member, keeping in mind the need for additional resources to strengthen the Nepali mission in Geneva.

The effort, however, was relegated to the sidelines in later years. Nonetheless, the country has frequently received assistance from the agency to depute a senior trade official in Geneva, to monitor closely the activities of the WTO, to involve the mission in trade-related meetings and negotiations, and to build operational networks with the trade related organizations in Geneva.

At present, the government deputes just one senior trade official at the mission in Geneva to oversee issues of Nepal´s trade interest and to take part in WTO negotiations.

But since multiple meetings and negotiations are held on WTO issues at the same time, Nepal has had problems in having delegates attend those meetings and in making a presence in multilateral trade negotiations.

“If our membership in the agency just contributed to strengthening our presence in the WTO and other trade- related organizations too, that would be a meaningful help to Nepal and add value to our endeavors to attain growth and reduce poverty through trade,” said Ojha.

He elaborated that the objectives of AITIC were to reduce trade barriers, to alleviate poverty and to improve Nepal´s capacity to integrate into the multilateral trading system. To fulfill those objectives, it has been assisting LDCs´ participation in the WTO and other trade negotiations, helping LDCs to become more active in the multilateral trading system and strengthening the operational capacity of LDC trade delegations, among others.

●Deposits, lending, profits of commercial banks up●

Posted on 2009-05-24
KATHMANDU: The deposits of country´s commercial banks increased in the third quarter of the current fiscal year and along with the deposits, net profits and lending of the 25 commercial banks of Nepal have also gone up.

The third quarterly report of Nepal Rastra Bank (NRB) shows that the country´s banks have continued their growth despite global economic crisis.

According to the unedited financial figures of NRB, Nepali commercial banks collected 27.35 percent more deposit up to the third quarter of this fiscal year compared to the corresponding period last year.

The central bank´s figures show 25 commercial banks have amassed Rs. 502.55 billion as deposits during the period against the Rs. 394.62 billion collected during the corresponding period last year.

The deposit figures for the third quarter of fiscal year 2008/09 also included Rs. 50.87 billion in foreign currency and the remaining in domestic currency.

Rastriya Banijya Bank (RBB), the largest bank of the country, collected the most deposits in the period followed by Nepal Bank Ltd. (NBL). RBB collected Rs. 60.67 billion while NBL collected Rs. 42.60 billion during the first quarter of this year. But Nepal Investment Bank (NIB) is fast catching of these two banks in terms of deposits.

Likewise, collective loans and advances of the banks increased by 31.44 percent during the first quarter of the current fiscal year. The commercial banks provided loans and advances amounting Rs. 356.46 billion against Rs. 271.19 billion provided by the 23 banks in last fiscal year´s third quarter.

Nepal Investment Bank Ltd. was the largest provider of loans and advances during the period with Rs 34.41 billion followed by Agriculture Development Bank, Nepal (ADBN) with Rs. 30.46 billion, the NRB report said.

Commercial banks collectively earned a net profit of Rs. 9.66 billion during the period against Rs. 6.35 billion last year. Among the 25 banks, RBB declared the highest net profit amounting Rs. 1.54 million, followed by Nepal Bangladesh Bank which posted net profit of Rs 939.22 million.

●Some banks are at risk: Governor●

Posted on 2009-05-24
BIRATNAGAR: The Governor of Nepal Rastra Bank (NRB), Deependra Bahadur Kshetry, has stated that some of the banks have put deposits, the hard-earned saving of people, at risk and that the central bank could take tough steps against the banks at any time to safeguard the depositors´ interests.

Khestry, who was in Biratnagar to inaugurate the head office of Srijana Finance, however, did not disclose the names of the banks in possible trouble.

Referring to the action the central bank took against Bank of Kathmandu, Governor Kshetry said that the NRB intervened because of the disputes among its board directors and because the board attempted to operate the bank as a private property.

“Our sole aim behind the action was to protect the deposits of the people,” said Kshetry, elaborating that the new board formed by the central bank would hold the annual general meeting of the bank and form a new board of directors by the end of this fiscal year.

Kshetry further stated that the Commission for Investigation of Abuse of Authority (CIAA) has unearthed yet another incident of financial embezzlement in another reputed bank. “The CIAA has already filed a misappropriations case against its promoters,” he stated, refusing to divulge the name of the bank.

Inaugurating the new finance company, Kshetry also said that the government has taken a policy of supporting banks and financial institutions that have been established with an aim to invest in agro-based industries.

Kshetry praised banks and business associations for positively supporting the government´s Youth Self-Employment Program (YSEP), but he noted that more than the expected number of applications for loans under the program had made managing the program difficult.

He went on to say that youth employment was an issue directly linked to the country´s peace and security, and that supporting the YSEP could help create a more investment-friendly environment. He also said that the Rs 200,000 to be pledged under the program was not a grant--that individuals taking the money would need to pay back the loan to the fund.

●Mango production likely to decline●

Posted on 2009-05-24
LAHAN: Production of mangoes in the eastern Tarai is likely to fall this year largely due to adverse weather conditions. In Siraha district alone, 4,565 metric tons of mangoes were destroyed by hailstorms this year.

This is expected to inflict a loss of Rs 10 million on around 20,000 farmers, according to Indra Dev Yadav, horticulture development officer. Due to the unexpected fall in production, mangoes are expected to be dearer this year.

Mangoes were planted in around 5,170 hectares of land in Siraha this year. Of the mangoes grown, only 47,650 metric tons are expected to be considered appropriate for sending to the market. Last year, 45,150 metric tons of mangoes were produced in the district´s 5,100 hectares of land.

In the last few years, many of the farmers in Siraha are showing interest in planting mangoes on a commercial scale due to comparatively better returns. On top of that, farmers can harvest first lot of mangoes only three years after planting the seeds. As a result most of the fields on the northern side of the East-West Highway have converted into mango orchards. Maldaha, Bombai, Kalkatiya, Dashhari, Shipiya, Chaurasha are some of the varieties of mangoes grown in eastern Tarai.

● EPS-S Korea aspirants may be in for a shock●

Posted on 2009-05-24
KATHMANDU: There’s good news, and there’s bad news. The good news is that South Korea, a lucrative destination for Nepali blue-collar jobseekers, is still hiring Nepali workers despite the economic meltdown. The bad news is that it will be perhaps the last lot of 29 Nepali youths to leave for South Korea on June 1 under the 2008 quota because Employment Service System (EPS) is likely to be revised thereafter.

Nepalis, registered in EPS roster, will have to re-register after June 13. “People must submit their medical reports along with new applications,” an EPS source said seeking anonymity. The EPS section of Ministry of Labour and Transport Management (MoLTM) is planning to call for applications for EPS 2010. “It is still a plan, till date. We have not reached any conclusion,” he said.

The delay by Nepal government and the global economic crisis in South Korea had canceled EPS 2009. Earlier in February, Nepal’s ambassador to South Korea Kamal Koirala had promised to initiate EPS 2009. According to the plan, EPS 2009 should have started in March.

Nepal entered EPS in 2005. Thereafter Nepali foreign employement agencies started sending Nepali youths to South Korea. After rampant fraud by several agencies, the government took the chore into its own hands in 2007. Some agencies selected for EPS collected service fee up to Rs 1.6 million from Nepali youths ten fold than that authorized. Around 6,768 Nepali blue-collar jobseekers passed the Korean Language Test (KLT) last year and 6,556 were listed in the roster of EPS Nepal but the government managed to send only one-third under the quota of 2008. It is selecting people at a snail’s pace from the 2008 roster. Around 40 Nepalis left for South Korea on April 27.

Nepali worker found dead

KATHMANDU: A Nepali worker was found dead inside a firm in South Korea on Thursday. The deceased was identified as Buddha Gurung, 39, of Manang district. His body was kept in Chhuwan Hospital in Seoul. The cause of death is not known. Preparations are on to send Gurung´s body to Nepal. Soul-based Nepali organization Nepali Contact Committee is making arrangements for that. More than 100 Nepali migrant workers have died in South Korea dut to workload, alcoholic habits, mental stress and accide-nts in the recent past.

● Bitter taste of high-priced sugar●

Posted on 2009-05-24
KATHMANDU: The price hike is at its peak, wallets are getting thinner and the one factor that has turned things bitter is the spiralling price of our daily sweetener that no one can do without — sugar.

According to data for the first seven months of this fiscal supplied by Nepal Rastra Bank (NRB), the central bank, among the items in the food and beverages group, the price indices of sugar and sugar-related products increased by a whopping 46.7 per cent in mid-February 2009.

A kg of sugar that cost Rs 50 just a month back is priced at Rs 60 today. Though the hike in sugar prices have not affected the market for sweets, the price of sweetmeats has definitely gone up by a good amount over the past seven months.

Shree Ram Bhandar, one of the oldest sweet shops in the valley, has had to hike prices over the last seven months, with the result that a piece of Rasbhari that used to cost Rs 10 just a few months is selling for Rs 15.

Another sweets shop, Angan, increases its prices every year. “We increase prices annually to stay in tune with the market, but we do not change prices according to the fluctuation in ingredients’ prices,” said Anil Agarwal, manager.

Though the hike in sugar prices have not affected sweet shops, consumers are surely feeling the pinch due to the increase in prices.

“The way everything is becoming so expensive, it will be impossible to survive. Sugar is an indispensable household item and we can’t do without it,” said housewife Renu Chettri.

● Panel recommends all transactions of INGOs through banks●

Posted on 2009-05-22
KATHMANDU: A panel has recommended that all financial transactions of International Non-Governmental Organizations (INGOs) should be made through bank accounts and that the details of such transactions should be made available on a regular basis to the concerned authorities.

According to a copy of the recommendations obtained by myrepublica.com, the report has categorically stated that all INGOs conducting their activities inside Nepal will have to have a current account in one of the commercial banks and all the aid received by the INGOs for Nepal programs will have to be transacted through that account.

The committee, which was formed by the government to recommend necessary strategies to ensure better utilization of non-governmental aid to Nepal, has also suggested that the details of the transactions made through the accounts should be provided to the research department of Nepal Rastra Bank within seven days of the end of each quarter. After performing the necessary analysis, such reports should then be further forwarded to the Office of the Finance Comptroller General.

"The Office of the Finance Comptroller General will compile quarterly reports that all the INGOs receive and make a yearly report, which will be made available to the Ministry of Finance and the Council for Social Welfare," reads the recommendation made by the government-formed Non-Governmental Foreign Aid Mobilization Committee.

However, the committee has recommended providing a specific time-period for those INGOs that are already in operation in Nepal, to channel through a bank account all the aid that they receive for their Nepal program.

Likewise, the committee has suggested that all the INGOs working inside Nepal should annually conduct a public audit, in order to enhance the accountability and financial transparency on their use of funds that come into Nepal. The committee has also recommended making INGOs liable for publishing final audit reports in national newspapers.

The report has also suggested that government grant work permits to foreigners if there is no willingness on the part of or the availability of Nepal-specific sector-wise experts or volunteers to carry out the work in question. The government has been advised to strictly implement the policy of not allowing representatives or chiefs of INGOs working in Nepal to get perks and benefits from the budget earmarked for their Nepal program.

There are more than 200 INGOs currently engaged in Nepal, in various development and advocacy activities; it is estimated that altogether, the INGOs invest more than ten billion rupees annually for their Nepal- related activities.

● Govt coffers flushed with cash●

Posted on 2009-05-22
KATHMANDU: Baburam Bhattarai, in what was probably his last press conference as finance minister, termed the government´s failure to spend the entire development budget as the biggest disappointment of the UCPN (Maoist)-led government.

He has reason to be discontented as a large portion of the development expenditure remains unused. The low absorption of expenditures allocated for development purposes has become a subject of concern.

The overall expenditure remains below target. According to the recorded figures of the Office of the Financial Comptroller General, only Rs. 29 billion (27 percent of the total capital expenditure) has been spent as of mid-April. It means that this fiscal year will record the lowest expenditure in recent times.

The government had allocated Rs. 107 billion as capital expenditure for the current fiscal year, but only Rs. 29 billion was spent in the first nine months. Even the sanctioned budget fell short of the target. The government had sanctioned Rs. 42 billion (38.98 percent) of the budget during the period.

A breakdown of development expenditure by ministry reflects the slow pace of development activities in the country. The Ministry of Physical Planning and Works, one of the main development ministries, was allocated a capital expenditure of Rs. 20 billion. It has been able to use up just Rs. 4 billion (19 percent of the allocated budget) during the nine-month period.

Ministry spokesman Hari Prasad Sharma said that the main reason behind the dismal development expenditure was insignificant spending on major projects like the Kathmandu-Tarai fast track highway, east-west railway, construction of the parliamentary building, mid-hill highway (Pushpa Lal Lokmarg) and the Tarai-Madhes postal road.

"But progress is encouraging in projects like the Melamchi Drinking Water Project," he said.

The story is similar with the Ministry of Local Development. It spent just

16.5 percent of its budget during the first nine months of the fiscal year, using Rs. 3 billion out of the Rs. 16.6 billion allocated.

However, ministry spokes- man Dinesh Kumar Thapaliya said that these figures were of mid-March and insisted that development activities were picking up in the later part of the year.

"I think over 80 percent of the development budget will most likely be spent in the mid-western and far western regions," said Thapaliya who is currently on a study visit to these areas. As per the Finance ministry record, Ministry of Water Resources has been able to spend 26.5 percent of the capital expenditure during the period. It spent Rs. 1.7 billion against allocated budget of Rs. 5.27 billion.

Likewise, the Ministry of Agriculture and Cooperative (MoAC) was able to spend only 12 percent of its budget, Rs. 120 million out of Rs. 1 billion.

MoAC spokesman Hari Dahal said, "I believe our ministry has spent more than other development ministries."

Likewise, the Education Ministry spent 15 percent of its capital expenditure and the Health Ministry 22.5 percent.

The Ministries of Industry, Women, Children and Social Welfare, and Peace and Reconstruction were way behind in their capital expenditure, with their performance standing at 1.3 percent, 3.5 percent and 6.9 percent respectively.

The Finance Ministry, which has been complaining about the slow progress of other ministries, used up just 13.7 percent of its budget during the same period, according to ministry records.

The Ministry of Youth and Sports spent 70 percent of the total budget under capital expenditure, which is the highest among ministries.

● WFP, NFC asked to coordinate their action●

Posted on 2009-05-22
KATHMANDU: The government has instructed the Nepal Food Corporation (NFC), the state-owned food distributor, and the World Food Program (WFP) to coordinate their actions to fortify food supplies in remote districts where a food shortage is looming large.

The instructions were issued after the District Agricultural Development Office (DADO) and District Food Management Committees (DFMCs) cautioned that food scarcity would soon be hitting seven districts in the Far West and five districts in the Mid-West regions. The warning bells were rung in the wake of regions´ seeing a sharp shortfall in winter crop productions.

Holding meeting in this connection, Supplies Ministry officials on Thursday instructed the NFC and WFP officials to exchange information on distribution plans, food stocks and the efforts they are making to fight the crisis and to come up with more effective mechanisms.

The NFC and the WFP, a project of the United Nations, work to serve the same objectives. But since they operate with separate funding and modalities, they are not aware of each other´s plans and activities.

“Since the latest warnings say that food insecurity could worsen in several hilly districts this year, we think it is appropriate to build some sort of coordination mechanism between them,” said Purushottam Ojha, Supplies Secretary.

By establishing a close functional coordination between the two agencies, the government thinks it can fight the looming food crisis more effectively.

“It would mainly help us to know the areas where the WFP is laying special focus, and help us plan accordingly--help us decide where we should strengthen our focus and target supplies,” said Bijaya Dhoj Thapa of the NFC, who was present in the meeting.

During the meeting, WFP representatives informed the ministry officials that the WFP would be distributing 100,000 tons of rice this year, under the Food for Work Program. NFC officials too said that they were distributing 17,000 tons of rice in 30 food-deficit districts.

Based on the demands of the DFMCs, the NFC has already allocated quotas for all the 30 districts. “However, we will supply more quantities the 12 districts of the Far and Mid-Western regions, including five districts in Karnali zone,” said Thapa.

The NFC and the WFP are holding talks to further their coordination in the meeting to be held on Friday.

● Airbus, Boeing in race for NAC deal●

Posted on 2009-05-22
KATHMANDU: In response to Nepal Airlines Corporation (NAC)´s request for proposal to purchase two jet aircraft, five bids were received as the deadline expired Thursday.

"We had expected only Airbus and Boeing companies to bid because our call was only for manufacturers but three other companies have also bid," said Raju K. C., spokesman of NAC. "I do not know whether the other three bids will be valid."

The other companies include Ilyoshin Finance Corporation of Russia, Commercial Aircraft Sales Leasing and Consulting Company of the U. S. and Kathmandu-based Aero Express Aviation. While Airbus and Boeing have submitted their proposals in cardboard boxes, the other three are in envelopes, said K. C.

The bids will be opened on Friday and then it will be evaluated by a 14-member committee headed by Deputy Managing Director of NAC Ganesh Thakur. The other members from within NAC include pilots, engineers and representatives from its finance, marketing and corporate departments.

"Although a time frame to evaluate the bids has not been fixed we will probably take between 10 to 14 days," Thakur said.

NAC has kept open the two options of buying two narrow body aircraft and one narrow body and one wide body aircraft. A narrow body aircraft has about 150 seats NAC expects it to cost about US$ 60 million and wide body aircraft has between 240 and 310 seats and the cost is expected to be between US$ 125 and 150.

NAC is at present negotiating a Rs. 10 billion (about US $ 133 million) loan from Employees Provident Fund and more could be negotiated from other Nepali banks if required, officials said.

The Nepal government is not investing any money in the state-owned airline but will be the guarantor of the loan.

NAC at present owns two Boeing 757 aircraft and both of them are more than 20 years old. The airlines has never owned an Airbus but has leased one for two years in the 1990s.

Boeing stopped manufacturing 757s in 2003 which is considered ideal for NAC because of the routes of NAC flies and the altitude of Kathmandu. "Either Boeing 737-800 or Airbus 320 would meet our requirements for a narrow body aircraft," Thakur said.

Officials from both companies have been to Kathmandu to make their presentations on their offers.

Earlier this year NAC had tried to lease an aircraft but negotiations with the US-based leasing company failed after what NAC officials claim there was a misunderstanding about the quoted price.

However, NAC had negotiated directly with the leasing company although it had not formally bid. All the other bidders were bidding with the same aircraft with a mark up on the minimum the leasing company had offered for.

NAC Managing Director Sugat Ratna Kansakar had then said NAC wanted to "deal with the house owner directly" rather than middlemen. But NAC´s move to negotiate with a party that had not bid could have raised legal questions.

Meanwhile, NAC has not closed the option of leasing rather than buying. It hopes that the manufacturers will not take too long to deliver the aircraft but if it does take about two years it could restart the leasing process.

"With the global recession other airlines may have cancelled orders and we may be able to get new aircraft in one year rather than the usual two it takes for delivery after placing the order," said K. C.

● Businessmen at UWTC demand security●

Posted on 2009-05-22
KATHMANDU: Traders inside the United World Trade Center (UWTC), the largest shopping complex in Nepal, have pulled down their shutters, for an indefinite period, demanding security from the complex management.

The businessmen took such a step after goods worth Rs 500,000--as claimed by a shop owner--were stolen from a cell phone shop inside the building recently. The UWTC´s Trade Association took the decision to the shut down the complex on Thursday.

A meeting of the association´s members held on Thursday also forwarded a nine-point demand, which they wanted fulfilled immediately, to the management of the UWTC.

Their demands include the implementation of the agreement signed between the association and management, that action be taken against the culprits of different theft cases and that reasonable compensation be provided to the victims; they also want management to come up with solutions to different problems like the lack of security, sanitation and power, and the timely adjustment of the shops´ rents, among others.

According to the association, a total of 180 shops are operating in the UWTC shopping complex.

Businessmen affiliated with the association also warned that they would not pay their rents for the period of the shops´ closure.

“We put forth these demands to the UWTC management at different intervals, but it did not pay heed to our demands. We are going to form a committee, on Friday, to press our demands,” said Sanjaya Adhikari, president of the association.

　Posted on 2009-05-19
　KATHMANDU: Chicken shouldn´t be as costly as it is now in the market. Over the last year, the price of chicken has increased by 56 percent, and this despite poultry´s production cost only rising by around 30 percent. On the face of it, such a disproportionate increase does not seem warranted, and cannot be determined, merely by weighing production costs against sale prices.
　Let´s take a look at the numbers: Last year, cut-up chicken cost Rs 160 per kg; this year, it costs Rs 250 per kg. Last year, the cost of feed, the largest cost-contributor was 30 percent lower, at Rs 29 per kg. And although over 50 percent of the maize required for feed is imported from India and most of the other feeds--soybean cake, sesame cake and sunflower cake-are also imported, duty and taxes on these feeds have not risen very much.
　Furthermore, Nepali poultry companies procure rice polish from markets in the country itself, and more than 75 percent of the bone mill used in feeds is also domestically produced. The price increase can´t be chalked up to higher transportation costs either: the transportation and labor cost in poultry production has not increased by more than 20 percent over last year´s mark.
　If labor costs had risen significantly, the difference would have shown up, for example, in the cost incurred in cutting up the chicken and preparing it for consumption. But live chicken last year cost Rs 110 per kg; this year it costs Rs 175 per kg, which means the increase is independent of labor costs.
　So what accounts for the sharp rise in price? It´s all about that age-old theory of supply and demand.
　“The price of chicken has skyrocketed because there has been a sharp fall in the volume of chicken produced by the poultry farms in the country,” says Tika Ram Pokhrel, president of the Nepal Poultry Entrepreneurs Forum (NPEF), an umbrella organization of poultry producers. And that decrease was the result of the avian flu´s rearing its ugly head in Jhapa, in January 2009.
　When that instance of bird flu became news around Nepal, says Pokhrel, who is also a leading hatchery entrepreneur, the production of chicks went down to 600,000 heads per week--from the usual number of 900,000 heads per week. In other words, with the public desisting from eating chicken, poultry farmers also refrained from rearing the birds.
　But Nepali chicken lovers apparently abhor a vacuum in their chicken-eating lifestyle. In fact, after the initial scare created by the avian flu, Nepalis actually increased their consumption of chicken: consumption shot up by 15 to 20 percent over the previous year, and that further widened the demand- and-supply gap.
　“The supply of live broiler chicken, for example, has nosedived to 160,000 kg per day, against the demand of around 205,000 kg per day,” says Pokhrel.
　And as the nation got back to consuming chicken in the usual copious quantities, that resumption, coupled with chicken sellers´ raising their prices in a market where mutton and buff prices had significantly increased, led to the high prices of chicken that we see today. If the poultry farmers were to shed their fear of the market´s not responding, then chicken prices might at least get back on the path to stable prices.
　But, says the NPEF, poultry farmers have yet to rear chicken in the numbers they used to. The estimated 2,000 commercial poultry across the country produced only around 4.2 million heads of chicken over the last year, compared to the usual 6 million of normal seasons. And until the poultry owners get back to producing the number of chickens they used to, the price of Nepal´s favorite meat will continue to increase.

Posted on 2009-05-12
　KATHMANDU: Farmers will not be getting subsidized fertilizer for the coming paddy season due to delay in the procurement process, said a senior government official.
　“We are not in a position to provide subsidized fertilizer to farmers even for the next paddy season that begins in July as the suppliers have not yet been decided due to a lengthy procurement process,” Dr Hari Dahal, spokesperson of the Ministry of Agriculture and Co-operatives (MoAC) told myrepublica.com.
　“We need at least three to four months including shipment time to bring subsidized fertilizer from the overseas market,” added Dahal. The maize and paddy seasons are the major seasons when farmers need huge amounts of fertilizer.
　Officials said subsidized fertilizers will be distributed only after fertilizers from overseas arrive in the country.
　“With the government´s limited network and the meager quantity of fertilizer available in the country, it would be difficult for us to start distributing the fertilizer immediately,” Dahal said.
　The procurement process for fertilizers received a serious setback when one of the bidding companies was found to be involved in fraud, prompting the Agriculture Inputs Corporation Ltd (AICL) - a government undertaking - to go for a re-tender.
　AICL had issued a re-tender on April 29 with a 15-day deadline for interested global companies to deliver diammonium phosphate (DAP) fertilizer to Nepal.
　Dahal further said the price-determination process for subsidized fertilizer has been delayed due to confusion over the role and authority of the relevant committee, which is headed by the secretary at MoAC.
　“There are two committees -- price-determination committee and monitoring committee -- mentioned in the guidelines for distribution of fertilizers. But it has not been specified who will head the monitoring committee. So, we have sent a request to the cabinet to make these matters clear,” said Dahal.
　Dahal said the price of subsidized fertilizer will be set 25 percent higher than the prevalent prices in India.
　AICL has already imported 5,000 tons of urea fertilizer from Brahmaputtra Chemical Fertilizer-- an Indian government´s undertaking. India has pledged to provide 32,500 tons of chemical fertilizer (25,000 tons of urea, 5,000 tons complex and 2,500 tons of potash) for this year.
　The government has decided to provide a subsidy to farmers on 100,000 tons of chemical fertilizer for next year. The subsidy on chemical fertilizers comes after a gap of about 10 years.
　The government had ended the subsidy in 1997, bowing to mounting pressure from donor communities that alleged massive misuse of subsidized fertilizer.

Posted on 2009-05-11
　KATHMANDU: Nepal Rastra Bank (NRB) has adopted a flexible policy on the reserves banks　 and financial institutions (FIs) are required to maintain as Investment Adjustment Fund (IAF).
　Banks and FIs need to maintain an IAF if they invest in companies that are not listed on the stock exchange. The IAF should be equal to the amount of investment made in another company.
　In a directive issued Thursday, NRB said that the IAF could be managed even if the company in which a bank or FI has made an investment took more than two years to get listed in the security market.
　Earlier, banks and FIs had to manage an IAF if the company in which they have invested failed to get listed within a year.
　NRB director Laxmi Niraula said that NRB had adopted a flexible policy as it was found that the listing process took more than one year. The directive also states that banks and FIs that have to deposit cash or submit a bank guarantee to the central bank to start business should come through banks and FIs recognised by NRB.
　Prospective banks should deposit cash or produce a bank guarantee equal to 45 percent of their paid-up capital within 30 days after they receive a license.
NRB said that it would accept bank guarantees for a period of less than one year.

Posted on 2009-05-11
　KATHMANDU: The government has failed to check manpower agents from collecting exorbitant money from Nepalis seeking jobs in Israel. Citing high commission to be paid to local agents in Israel, Nepali agents have allegedly been collecting up to Rs 800,000 per person. Nepalis mainly seek caregiver jobs in Israel. The government has fixed a maximum of Rs 240,000 charge that can be collected from a job seeker.
　“We have noticed that manpower agents have been collecting exorbitant charges, far higher than we have fixed, from job aspirants. We have requested them to reduce the fees. But, our requests have fallen in deaf ears,” Mohan Krishna Sapkota, director general of Department of Foreign Employment, told myrepublica.com on Sunday.
　Objecting to ill-practice of levying exorbitant fees on job aspirants and lack of job related training, Israel has stopped issuing fresh work permits to Nepali workers since last month. Israel is the most favored labor destination for Nepali women caregivers.
　Nepali workers earn around Rs 60,000 a month in Israel where more than 12,000 Nepalis are estimated to have been working.
　Manpower agents said they were compelled to collect higher amount from job seekers as they had to pay a large amount of commission to agents in Israel. Some Nepalis working in Israel have also teamed up with the Israeli agents to charge commissions from Nepali agents, they said. “We are not in a position to send workers to Israel at government-set fee due to high costs of arranging jobs in Israel,” said a manpower agent.
　Recently, Foreign Employment Promotion Board (FEPB) had recommended that the government allows manpower agents to collect up to Rs 360,000 from each worker seeking job in Israel. However, the government has not yet decided whether to apply the new rate or not.
　“It is not appropriate to increase the charges without studying its impacts,” said Purna Chandra Bhattarai, joint secretary at the Ministry of Labor and Transport Management.
　Though one month has already been passed since Israel stopped issuing work permits to Nepalis, nothing concrete has been done from the Nepal government´s side to get the restriction on Nepali workers lifted.
　“We have initiated diplomatic process through our embassy in Israel to reopen Israel for Nepalis. We are not sure when the problem will be resolved,” said Sapkota.

Posted on 2009-05-11
　KATHMANDU: The price of sugar has soared to Rs. 65 per kg due to a shortage resulting from insufficient supply from the government and sugar traders.
　Dealers have not been supplying sugar in adequate quantities. The government-owned Salt Trading Corporation (STC) and National Trading Limited (NTL) have not been able to replenish their stocks either.
　The government, witnessing the unnatural price hike, had started to distribute sugar at Rs. 51 per kg from STC and NTL depots two weeks ago. But still the market demand is rocketing along with the price.
　Currently, STC has been charging Rs. 51 in Birgunj and Rs. 53 per kg in Kathmandu.
　Saying that the country produced only 100,000 tons of sugar this year, the government through STC and NTL has imported sugar from India by paying 10 percent customs duty. Earlier, the customs duty for the import of the sugar was 25 percent plus 13 percent VAT.
　The government has targeted importing 90,000 tons of sugar to fulfil demand. The annual sugar requirement of the country is 160,000 tons.
　Kesherman Bista, a wholesaler, said that the shortage and price hike was mainly propelled by lower production, price rise in India and cartelling by big sugar traders. However, a trader preferring anonymity said that sugar cartelling by traders was just a rumour. "We have been out of stock for the last few months," he said. "If we had stock, it would be the best time to release it in the market."
　He said that the price of sugar had soared because of lower production by domestic sugar factories this year. "Sugar mills charge Rs. 53-54 per kg so the price in the market might have increased," he said.
　He opined that the government should allow the private sector to import sugar from India free of duty. "If the government allows import of sugar, there will be no scarcity at all," he added. The government with an effort to promote domestic sugar production had been imposing a 25 percent customs tax. But traders said that the government must end its monopoly on sugar import.
　Traders said that the private sector would be able to sell sugar imported from India at around Rs. 60 per kg.
　Meanwhile, India too has been witnessing a price hike in sugar which is the highest in the last 28 years. The retail price of sugar in the Indian market stands at Indian Rs. 28-30 per kg.

Posted on 2009-05-10
　KATHMANDU: A sharp rise in the prices of key construction materials has pushed up the cost of construction by a whopping 30 percent over the last six months, shows price trend in the market.
　“In fact, if you start building a simple home now relying on estimates of Rs 2 million done some six months ago, you will instantly find the budget falling short by Rs 600,000,” said Roshan Dahal, former president of Nepal Construction Materials Dealers Association (NCMDA), who is also a builder.
　Construction cost has soared mainly following the heels of some two-third rise in the prices of cement and also more than two-fold rise in the prices of bricks over the period. These two products command 29 percent and about 12 percent weight respectively in the overall construction budget.
　Prices issued by the NCMDA shows that the prices of cement has soared by some 66 percent over the last six months. Mainly the short supply of Nepali cement and the subsequent hike in the prices by the manufacturers by Rs 250 per sack (50 kgs) has dragged the overall cement prices to a range of Rs 700 to Rs 750 per sack.
　Likewise, the prices of brick also soared to Rs 6,500 and 7,000 per thousand pieces depending on quality and quantity of supply, which is a whopping 133 percent rise in prices compared to six months ago. Bricks were priced Rs 3,000 per thousand pieces six months ago.
　Even though the prices of steel rods has dropped sharply, compared what prevailed in the market a year ago, its prices have inched up by some 18 percent over the last six months, said the suppliers of construction materials.
　Six months ago, prices of steel rod had dipped to Rs 62 per kilogram in December 2008 - lowest over the last one-and-a-half years. Presently, it is priced Rs 73 per kg. Steel rod commands 29 percent weight in the overall construction budget, and any changes in its prices impact the budget accordingly.
　The price of aggregates, which also occupies substantial weight on the construction cost, has also increased to Rs 42 per cubic feet from Rs 40 over the period.
　Workers wage, one of the key input costs of construction work, however, has remained constant over the period and stand at Rs 150 to Rs 250 a day depending upon the level of skill and competence. The price of wood has also remained unchanged.

Posted on 2009-05-10
　KATHMANDU: The ongoing row over the sacking of Radhesh Pant, managing director of the Bank of Kathmandu (BoK), shows no signs of being settled anytime soon.
　Pant was sacked on March 23 on the basis of a majority vote by board members.
　Talks held between Pant´s alliance and his rival who decided to fire him under the mediation of Nepal Rastra Bank (NRB) have failed to yield results.
　NRB acted at the departmental, deputy governor and governor levels to bring the two warring sides to a consensus without success.
　According to NRB deputy governor Bir Bikram Rayamajhi, NRB has called the two sides on Sunday to NRB to settle their differences.
　Chairman Sanjaya Bahadur Shah heads the faction in the seven-member board that ousted Pant while Pant heads the other camp.
　Board members Rita Malla, Balram Neupane and Shanta Bar Singh Thapa have supported Shah. Two board members, Sudarsan Raj Poudel and Sitaram Thapaliya, have supported Pant, according to BoK sources.
　Following the sacking of Pant, the board promoted Sabin Raj Shrestha, the bank´s chief business officer, to acting chief executive officer of the bank.
　Pant´s side is sticking to its demand to reinstate Pant. A director close to Pant said his group was ready to hand over responsibility to a mutually agreed chief executive officer after his reinstatement.
　"Without reinstatement of Pant, how can the handover and takeover process take place?" he said.
　Chairman Shah has remained tight-lipped on the issue. "I don´t want to make any comments on this issue," he told the Post.
　According to NRB sources, Shah´s supporters are in no mood to reinstate Pant in his previous position.
　Pant´s defenders complain that he was ousted on the basis of a majority without seeking any clarification on anything related to the bank´s performance.
　Pant has been credited with improving the bank´s status during his tenure by bringing down its non-performing loans to below 3 percent and contributing to increasing its per share value.
　The main reason behind Pant´s ouster is said to be old rivalry between the two families besides the facilities the managing director enjoys as executive chief in addition to other benefits as director of the bank.
　The Bank and Financial Institution Act 2063 permits the board to select a bank´s executive chief. However, Pant´s supporters are insisting that the board provide justification for its action against the incumbent executive chief.
　As the two sides are yet to give any signs of patching up their differences, Rayamajhi said that NRB could take some action to address the fears of the bank´s depositors.
　A senior BoK official said that they were running the bank as per the existing programmes, and that they had nothing to do with the quarrel between the two sides.

　Posted on 2009-05-10
　KATHMANDU, May 9: Exports of handmade woolen carpet, a premium Nepali commodity, dropped by more than 21 percent over the first nine months of the current fiscal, as global economic slowdown hit the consumer spending in the key importing countries.
　During the period, Nepal exported 679,647 square meters of hand-knitted carpet to 46 countries across the world. Exports in the same period last year were 866,618 square meters in 52 countries.
　Along with the fall in export quantity, earnings from the export also dropped by 11 percent as compared to the earning during the same period last year. Statistics provided by Trade and Export Promotion Center (TEPC) revealed that the exports stood at a mere US$ 55.47 million in the first nine months of the current fiscal, against US$ 62.41 million during the corresponding period last year.
　Officials at Nepal Carpet Exporters´ Association (NCEA) attributed the lesser drop in value than the quantity to the price rise that the exporters managed to bargain with the importers.
　As for the decline in quantity, they attributed it to deep-running labor problems, which have perennially affected smooth production, and also to the fewer orders in the wake of global slowdown.
　Exports to Germany, the largest consumer of Nepali handmade woolen carpet, slipped by more than 20 percent. Exports to the US, the second largest importer, also shrank by 25 percent.
　Despite odds, exports to the US continued to fetch more earnings than in Germany. Exports to the US alone fetched an earning of US$ 23.34 million, whereas exports to Germany valued at US$ 15.80 million.
　The UK, meanwhile, imported carpets worth US$ 2.89 million.
　Given the downward trend, NCEA has estimated that the carpet exports will remain below one million square meters during the current fiscal. Till two years ago, exports in a year used to hover around 1.5 million square meters.
　Exporters warned that the industry could suffer more if the government paid no heed to implement order-based hire and fire mechanism -- something that the manufacturers of all major exportable commodities have been demanding for the last couple of years.
　Presently, the manufacturers need to shoulder liability of full strength staff even in the lean period, adding the costs of doing business and rendering Nepali carpet less competitive in the international market. Lack of competitiveness has forced many importers to look for cheaper suppliers such as Vietnam, China and India.

Posted on 2009-05-10
　KATHMANDU, May 9: With the government´s recent forecast of a 14.5 percent decline in wheat production for this year, things look even bleaker for the people in Nepal´s remote districts who are already suffering through a food crisis. Wheat is a major staple in remote mountain and hill districts.
　A primary estimate of the major agricultural products, which was released by the Ministry of Agriculture and Co-operatives (MoAC), says that wheat production -- the third major cereal crop in Nepal-- will decline by 230,000 tons, to 1.34 million tons this year. The main reason we´ll see this shortfall is that the winter that has just ended saw a protracted drought and meager snowfall.
　Dr Hari Dahal, spokesperson of the MoAC says that, as a consequence, this year´s wheat production in the mountain and hilly districts will fall by up to 50 percent and 30 percent, respectively. But the Tarai, where wheat is mostly grown on irrigated land, will be spared such drastic drop offs.
　Agriculture scientists say that a dry wave that started its journey in February from countries to the west of Nepal laid waste entire wheat fields across the country.
　When the unfavorable climate took hold here, farmers switched to crops other than wheat. As a result, says the MoAC, wheat production areas shrunk by 1.6 percent, to 694,000 hectares this year, from 706,000 hectares last year.
　"The combined impact of the insufficient rain, the meager snowfall, the decline in production areas, and, of course, the drought means that, overall, wheat productivity this year will decrease by 13 percent," says Dahal. Furthermore, the amount of barley readied for consumption-- another major winter crop- will go down by 17 percent since the total production area for barley has declined by 1.3 percent this year.
　Now, according to the figures forecast by MoAC, all other products, except for tobacco and sugarcane, should see marginal increases in production. In fact, paddy, maize and millet-- the other major staple crops that people depend on for daily sustenance-- will also see marginal increases in their production volumes. So shouldn´t this surplus offset the problems that will very soon be caused by the reduced wheat production?
　The problem with such wishful thinking all stems from not taking into account the period for when this crisis will hit. Yes, paddy constitutes the most used staple by far. But rice was harvested back in December of last year. The people in the remote hilly districts have already used up their rice stocks by now. The same thing goes for maize and millet. Millet was harvested around November, and corn was harvested even further back, around September. So the stocks of all these staple food items have already been consumed.
　Wheat and barley, if they´d been produced in the usual volumes, would have staved off the crisis, by filling in as the go-to staples once the rice stocks had run out. But as we have seen, the drought and other factors that occurred this winter have thrown things completely out of gear. Although the MoAC´s figures show that paddy and maize production will soar by 5.2 percent and 2.8 percent this year, those products will only be ready for consumption in December and September. By then, no matter how bountiful the harvests, it might be too late.

Posted on 2009-05-10
　KATHMANDU: Nepal´s garment industry has cratered. Over the first four months of 2009, the export of readymade garments to the United States dropped to US$ 2.83 million: that figure represents a drop of 59 percent, compared to the same period last year. In fact, Nepal´s garment industries did not even export 10 percent of what was exported in the first four months of 2004.
　"The industry is simply dying out," says a garment manufacturer now sitting idle following the closure of his company about a year ago. The gloom started around 2002 and business has got progressively worse since then, and exporters say they see no possibility of an immediate reversal of this trend. Now, with the political instability that has gripped the country, no one knows when the industry might find its feet again.
　Once the largest foreign currency generator among exports, the Nepali readymade garment today suffers from an inability to compete with other countries and from labor problems and frequent strikes that prevent exporters from making delivery deadlines. To top it all, the end of the quota system in international apparel trade has severely hurt the already ailing industry. Because of the woeful business climate, the number of industries in this once thriving sector now hovers somewhere in the range of a dozen. And in a vicious cycle, employment numbers are also dropping with dwindling investments.
　Only three measures can resuscitate the industry, say the garment factory owners: one, a Garment Processing Zone (the idea has been pushed since 1999) must be created; two, an order-based hiring system (sought since 2007) must be instituted; and three, a duty-free-entry facility for Nepali garments exported to the United States (lobbied for since 2005) must be provided for.
　But all these goals remain elusive, even after all these years. The proposal that a GPZ should be built has been approved by the government, but the project is still all idea; the labor issue will not be solved anytime soon because the issue is a politically inflammable one for the government; and the proposal that the United State provide a duty-free facility has been pushed even further into the wilderness now that recession-time economics is coming into play."
　"These revival measures need bold decisions and committed support from the government," says Uday Raj Pandey, vice president of the Garment Association of Nepal. "Sadly, the government has been nothing but meek."

Posted on 2009-05-10
　KATHMANDU: Sunrise Bank´s initial public offering (IPO) has been oversubscribed by 26 times. According to its issue manager NMB Bank, Sunrise´s IPO has received share applications worth Rs. 9.5 billion so far. The total may touch Rs. 10 billion as cheque clearing of other banks is still being done.
　Sunrise Bank made its IPO worth Rs. 375 million on Sunday. The IPO, which was the largest ever by a Nepali financial institution, received the highest number of applications. Issue manager NMB Bank received 350,000 applications for the new stock issue.
　However, only 75,000 applicants will be allotted shares. NMB Bank´s merchant banking chief Pravin Parajuli said, "There is a provision that says that shares should be distributed to 2,000 people for every Rs. 10 million of the IPO."
　Applicants will have to wait till the third week of July to know whether they have been allocated any shares or not. According to the Security Board of Nepal´s (SEBON) directives, share allocations should be completed within 70 days if there are more than 300,000 applications.
　"We´ll try to do it before the stipulated time," said Parajuli. The deluge of applications worth Rs. 10 billion for Sunrise Bank´s shares shows that investors don´t hesitate to put their money in companies which are in sound financial condition. Prospective investors applied for the shares at 250 collection counters across Nepal.
　When Citizens Bank International and the Bank of Asia Nepal made their IPOs, applications worth Rs. 5 billion and Rs. 6 billion respectively were received. Analysts said there might be a short-term liquidity crisis in the market because of Sunrise´s IPO.
　"As per the rule, this amount (Rs. 10 billion) should be kept at Nepal Rastra Bank for one week, and there might be a liquidity crunch." said SEBON director Niraj Giri.

●NT to start electronic billing system●

Posted on 2009-05-10
　KATHMANDU: Tired of toting cash and waiting in long queues to pay your phone bill? Here’s cheer for Nepal Telecom (NT) landline users: no need for queues or worry about late fines.
　Government telecom service provider NT is developing a Mobile Wallet System. To reduce the paper cash transaction system, grant financial security and to create proper time management, NT will provide electronic bill payment system. It recently launched PSTN bill payment system through various banks.
　“Along with postpaid bill paying system through banks, we have started the PSTN bill payment system through banks,” said Lochan Amatya, Director at Information Technology Directorate. According to Amatya, currently the postpaid mobile and PSTN bill payment is being done through some banks here as NT is on its testing period. And as soon as NT is prepared to launch the system, it will make contracts with major number of branch present.
　The bill payment system is currently available at Laxmi Bank, Machhapuchre Bank, and Bank of Kathmandu while NT is trying to develop contact with Nepal Investment Bank, Nabil and Bank of Asia. The system at the moment is available in Kathmandu Valley, Pokhara, Banepa, Biratnagar, Dharan, Bhairawa, Butwal, Hetauda, Tadi and Bharatpur. “ We are planning to replace the traditional bill payment system at Birgunj with the electronic payment system through banks,” said Amatya.
　“We are trying to bring new changes and awareness through IT field and with its success we can introduce Mobile Wallet System here in Nepal, which will definitely reduce the problem of carrying huge cash and proper money management,” Amatya said.
　NT till date has a total of 22 per cent of postpaid mobile revenue collection through banks. Its recently launched PSTN bill payment system has made a banking collection of Rs 10 lakh and it is increasing. NT has a target of more than 50 per cent of its collection through online services.
　“ Through this system NT also will benefit as it can utilize its resources in the development of its services,” said Amatya.
　NT has 5.16 lakh PSTN users while the total number of GSM postpaid mobile users is around one lakh and the number of prepaid mobile users is 25 lakhs.
　In the new system, customers can pay their postpaid mobile and PSTN bills via any bank or its branch offices providing the service of bill payment through personal account, cash or internet. Customers holding personal accounts in the bank can make payment through their accounts. Those not having accounts can make direct cash payments.

●Taxpayers learn the ropes of VAT e-filing●

Posted on 2009-05-10
　KATHMANDU: Inland Revenue Offices (IRO), Area No 1 and 2, Kathmandu and Lazimpat office organised a demonstration programme on e-filing of value added tax (VAT) for taxpayers here on Friday. Taxpayers, auditors and officials of the offices took active part in the programme.
　Though the government has started e-filing of VAT since this fiscal year, very few taxpayers are using the facility.
　“It is for the benefit of the taxpayers,” said Shanta Bahadur Shrestha, director general of the Inland Revenue Departmant (IRD). “Taxpayers need not go to the tax office to pay the VAT if they learn the e-filing system.”
　However, even now very few tax payers are finding it convient to use the e-filing of VAT that saves time, energy and prevents administrative hassles.
The use of e-technology in the tax administration has also reduced the workload of employees and increased their efficiency.
　The training was organised under the Taxpayer Education Programme of IRD that has from this week started action against around 6,400 Voluntary Disclosure of Income Sources (VDIS) defaulters. Some of the suspected businesses were raided last week. “We are still investigating,” Shrestha added.
　IRD collected a total of Rs 1.51 billion under the scheme from around 3,600 people, though it had compiled a list of 10,000 people. The government had extended the deadline by a month after the industry captains urged to accede to their request.
　In the first phase, the government managed to rake in Rs 1.42 billion. The original deadline had expired on February 11. However, the extension came in handy for the government, if the collections are anything to go by. It collected an additional Rs 467.8 million from 1,600 people within the extended period.
　Finance Minister Dr Baburam Bhattarai had announced the scheme during his budget speech on September 19, 2008.

●With more traffic, changes in TIA●

Posted on 2009-05-10
　KATHMANDU: Given the growing congestion at Tribhuvan International Airport (TIA), the Civil Aviation Authority of Nepal (CAAN) has initiated various measures including separate parking bays for helicopters to address the situation.
　According to CAAN, construction of a separate parking place for helicopters is going on at the eastern side of the runway for domestic aircraft. "Moreover, a parking way and equipment yard are also being constructed at the international apron," Tri Ratna Manandhar, general manager of TIA, told a press meet on Friday. In order to accommodate more foreign tourists who are expected to come as a result of Nepal Tourism Year 2011, TIA has already prepared a design estimate to build a sterile hall which will accommodate 300 passengers, according to officials.
　Work on a design estimate for building a new arrival area for international passengers is also going on under which facilities such as entry/exit roads, parking place for 200 vehicles, waiting hall, tea stall, information desk, covered walkway from the arrival gate to the car parking area and children park with greenery will be managed. "With the number of tourists and airlines increasing, further facilities aimed at addressing the growing air traffic has become essential," Manandhar.
　According to TIA, air traffic movement in 2008 increased to 83,000 against 75,000 in 2007. Almost three million passengers travelled through TIA in 2008. International airlines serving Nepal have added flights and new airlines are coming in. So TIA has been facing a problem of increased air traffic.
　However, officials complained that increased urbanisation around TIA has prevented the required expansion of TIA. "We cannot expand the airport further to address the need of the hour," said Nagendra Prasad Ghimire, joint secretary at the Ministry of Tourism and Civil Aviation (MoTCA).
　He added that they were moving forward to conduct a feasibility study for a proposed international airport at Nijgadh, Bara.
　Improvement of the airports at Chandragadhi, Tumlingtar, Simara, Manang, Gautam Buddha, Mugu, Janakpur, Pokhara, Kangeldanda, Khanidanda, Kalikot, Mechinechaur and Dolpa is also going ahead, according to CAAN.

Posted on 2009-05-06
　KATHMANDU: There has been more fuel available in the market over the past two days, but Nepal Oil Corporation (NOC) says that consumers still need to wait for at least a week before they see normal levels of fuel supply.
　Petroleum dealers say that since Sunday the recent fuel crunch started to ease up after the NOC pumped more than 350 kiloliters (KL) of petrol in the valley. This welcome development came about as a result of the NOC´s instituting well-coordinated import measures and with the government´s providing added security for fuel carriers from Saturday.
　The NOC´s distribution records show that from Sunday it has been regularly distributing more fuel in the Kathmandu Valley: 250 KL of petrol from the Thankot depot and an additional 100 KL from Amlekhgunj. "An additional 50 KL of petrol from Bhairawa, which will be supplied to the private dealers, will also reach the market by late Tuesday evening," said Ramesh Koirala, the deputy director, Distribution, at the NOC.
　Under normal circumstances, when demand stands at about 250 KL, the current volume being released would have been enough to flood the market. But since the demand has ballooned to 400 KL-- due to the cumulative impact of the shortage that reigned over the last two weeks-- that volume falls well short of the market´s current demand.
　That pent-up demand is also the reason that despite the surge in supply, queues of vehicles are still visible in the most-visited refilling stations in the Valley, like the Sajha petrol pump in Pulchowk, the Nepal-Army-run refilling station in Bhadrakali and the police-run station in Naxal.
　"We are distributing in the market all the fuel we import from India," said Ramesh Koirala. "Sadly, the demand has soared to such levels, we will need an additional week´s time to bring the situation back to normal."
　He told Republica that the corporation´s plan for restoring normal supply has been to distribute in the market all that it imports from Raxaul, and to also distribute the additional 50 KL of petrol that is shipped to Kathmandu from the Bhairahawa depot every day.
　Because the Tharuhat strike was withdrawn on Monday, the corporation expects imports to improve, easing the corporation´s daily-supply problem. "However, because we need to supply all that we import in the market, we are having a problem with replenishing our almost dried-up stock," said Koirala.
　To address this concern, the corporation had requested the Indian Oil Corporation (IOC) to step up supplies to Nepal from the Raxaul depot. However, citing distribution limitations, the IOC has made arrangements with the NOC to have their Nepali counterparts collect an additional 300 KL of petrol and 600 KL of diesel at Barauni. That proposed move, however, is not going according to plan. "Because of the further distance they have to travel and the higher temperatures at Barauni, which lead to more fuel evaporating, the private tanker operators have refused to move to Barauni," said Koirala.
　But the corporation must replenish its stock, and it has thus diverted its tankers from Biratnagar, Janakpur and Amlekhgunj, and also hired Indian tankers, to collect the fuel from Barauni.

Posted on 2009-05-06
　KATHMANDU, May 6: The Patan Appellate Court on Tuesday issued a stay order against Nepal Telecom´s decision to distribute cash dividends of Rs 25 on each share owned by the public and the company´s employees. The order was given based on a writ petition filed by seven shareholders of NT who are demanding an increment in the amount of cash reward announced by the company.
　The interim order will be effective until May 28, when the court has summoned NT to participate in a discussion on whether to give continuity to the order till the case is finalized.
　Following the court´s verdict, Nepal Telecom (NT) has stopped the dividend distribution process until May 11, when the court will revise its decision.
　NT had started giving away the profit on shares to its shareholders from Tuesday morning. And till the time that the interim order was issued, many people who had bought the company´s shares had already collected the dividends.
　But the stay order has been heeded. "Although the verdict came late, we have stopped the process of distributing the cash dividend," an official of NT told myrepublica.com, requesting anonymity, soon after the stay order was issued.
　NT, the country´s largest telecom company, had some three weeks ago announced that it would give away Rs 25 on each of its shares, from a net profit of Rs 7.94 billion generated by the company in the last fiscal year.
　However, public shareholders are demanding that they be given dividends based on the profit generated by NT since the time it was converted into a public company, which was some four years ago. The public shareholders had made this demand on the grounds that they had to invest huge amounts to buy the company´s shares last year.
　Last year, when NT had floated its shares to the public, it had put a price tag of Rs 600 on each of its shares. Unlike other companies that issue each share with a face value of Rs 100, NT had added a premium of Rs 500 to each of its shares; NT did this because it had been operating on profit for three consecutive years.
　Assuming NT´s shares to be blue chips, general citizens had paid up to Rs 2,500 to lay their hands on a single share. But now, a year later, the value of NT´s share has come down to less than Rs 530, distressing many who had invested considerable amounts on what they now call a "worthless investment tool."

●Guna Air hits start button●
Posted on 2009-05-06
　KATHMANDU: Guna Airlines started its operations from on Tuesday. Promoted by the Guna group of companies, it launched its flight in the Nepali sky with two Beechcraft 1900s.
　“Currently we are flying on the Kathmandu-Pokhara-Kathmandu, Kathmandu-Biratnagar-Kathmandu, Kathmandu-Nepalgunj-Kathmandu and mountain flights,” said Rajendra Shakya, executive chairman of Guna Airlines.
　Shakya said Guna is concerned about safety measures and that safety plans are carefully followed and regulated on a daily basis under the guidelines of ICAO and Civil Aviation Authority of Nepal (CAAN).
　Beechcraft 1900 — a 19-seater aircraft — simply called the ‘Beech’, is a pressurised twin-engine aircraft used as a corporate transport by several governments and the military around the world.
　The aircraft is capable of flying well in excess of 970 km/h and is the most popular in the domestic sector.
　“With focus on safety and service, Guna aims to hold out a steady competition to the already established market-leaders in the aviation service sector,” Shakya said.
　The airlines has also brought various discount schemes — for the time being — for infant, group of 16 full adult fare paying passengers and for 11 full adult fare paying passengers.
　The new airlines’ entry in the national sky will centainly fuel competition, even though the Nerpali sky is not so crowded yet.
　Guna empire was initiated as a small gold shop known as Guna Jewellers in Patan in 1984 and it has now grown into a multi-industry company in the short span of just 25 years.
　By 1997, Guna Cinema Pvt Ltd, Guna Co-Operative Ltd, Asian Food Cold Storage Pvt Ltd, Guna Colony Pvt Ltd, Guna Smriti Sewa, Gyan Bikash Secondary School, Stupa Housing Pvt Ltd had already come in operation under the group, said the company management.

●The IPO sun rises for Sunrise Bank●

Posted on 2009-05-06
　KATHMANDU: For the first two days — Sunday and Monday — in the invite for primary share applications for Sunrise Bank, a total of 84,185 applications worth over Rs 2.51 billion were collected.
　“On Sunday, a total of 19,185 applicantions worth Rs 811.35 million were received and on Monday a total of 65,000 applications worth Rs 1.70 billion were received making it a total of 84,185 applications worth over Rs 2.51 billion,” said Niraj Giri, director of the Securities Board of Nepal (Sebon) — the regulatory authority of the capital market.
　The protests and uncertain political situation in the first two days of the week are thought to have made people hesitant whereas today the would-be-investors’ queues could be more visible around town. The primary issue of 37,50,000-unit shares worth Rs 375 million — the largest among commercial banks — at Rs 100 per unit par value each has been floated from Sunday.
　Sunrise Bank expects a total of over Rs 6 billion worth of applications — over 20 times the issue. If such an encouraging situation persists over the next two days — today and tomorrow — the bank’s expectations might be easily met.
　The capital market is considered a mirror of the economy. However, the Nepali capital market has not yet been able to reflect the economy as Nepse today posted a rise of 7.68 points (1.2 per cent) to 648.57 points just a day after the government led by Prime Minister Pushpa Kamal Dahal ‘Prachanda’ resigned yesterday.
　“The Nepali capital market is still not mature, it is influenced by a handful of people,” said Dr Chiranjivi Nepal, former chairman of Sebon. “It’s not an isolated case, the market in the past too never reflected the prevailing economic or political uncertainty,” he added. Another trait of the Nepali capital market is that it is dominated by financial institutions. The share of the financial institutions in the total share trading in the sole secondary market stands at over 95 per cent in 2065 BS — mid-April 2008 to mid-April 2009. The commercial banks’ sub-group has 45.37 per cent, finance companies’ sub-group has 26.77 per cent and development banks’ sub-group has 23 per cent share, making it to a total of 95.14 per cent between mid-April 2008 to mid-April 2009.
　The remaining six sub-groups — trading (2.05 per cent), hydropower (1.47 per cent), insurance (0.89 per cent), others (0.35 per cent) and manufacturing and processing (0.1 per cent) — have less than five per cent share in the total trading.
　In power-starved Nepal, the hydropower companies’ performance also cannot not be called satisfactory. “For sustainable development of the Nepali capital market, the presence of more manufacturing sectors apart from more brokers and Central Depository System (CDS) is a must,” added Dr Nepal.

●NDF meet put off ●

　Posted on 2009-05-05
　KATHMANDU, March 5: The last cabinet meeting of the Maoist-led government held on Monday decided to postpone the much-awaited meeting of the Nepal Development Forum (NDF) scheduled for May 12-14.
　A government official informed myrepublica.com that the government had no other option than to postpone the meeting since the finance minister, who had sent out invitations to all donors, is no longer in office.
　"The postponement was the obvious thing to do since the owner and presenter of the National Development Strategy Paper (NDSP), which the government was supposed to submit as its main development strategy paper at the upcoming NDF meeting, is no more in power," said the official.
　The official further said that all the donor agencies which had received invitations to attend the meeting will be officially informed tomorrow about the postponement. Emails have been sent to all donors concerned and official letters will be dispatched tomorrow, he said.
　In the NDSP, the government had set itself a target of investing Rs 1,324.5 billion to achieve an average economic growth rate of 7.6 percent and lower the national poverty level to 21.5 percent over the period of the next three years.
　The development strategy paper had aimed to achieve an agricultural growth rate of 5.2 percent and non-agricultural growth of 8.8 percent during the period.
　To achieve the growth targets, the strategy paper planned to invest Rs 1,151.6 billion from domestic resources for the formation of fixed assets. Of this, the private sector was expected to invest Rs 324 billion while the remaining Rs 827.7 billion was expected to come from government sources.
　As per the initial estimate, the total resources gap was expected to be Rs 115.7 billion and the government was planning to urge donors during the NDF meeting to raise their commitments to fill the gap.

　Posted on 2009-05-05
　KATHMANDU: Transactions in land and houses, that soared to an unprecedented level over the past two years, have shown signs of stagnation in Kathmandu Valley.
　Growth in transactions has slowed over the last one month, said Raju Basnet, planning officer at the Department of Land Reforms and Management (DoLRM) who keeps track of the market. Also, the cumulative revenue growth from the sector has slowed to 31 percent over the first nine months of 2008/09, whereas till eight months back it was 60 percent.
　Officials at Chabahil land revenue office (LRO) said that registration of land deals at the office currently numbers about 350 a day. The number used to stand at about 450 a day till early mid-March, 2009. Similar drops in transaction have been recorded at Kalanki and Lalitpur LROs as well.
　Officials at Kalanki LRO attributed the slowdown to banks and financial institutions tightening their lending to the sector.
　Basnet, however, noted that this could merely be a seasonal variation. “After all, real estate transactions in April and May and also in June, July and August normally decline because of the cultivation season and rains,” he stated.
　The stagnation has not impacted property prices though, and these have more than doubled over the past one year.
　While the recent slowdown in buyers´ rush is yet to be reflected in revenue figures, revenue collection from the sector in the first nine months of 2008/09 has stood at Rs 5.23 billion. This clearly exceeded the target set for the period by about 37 percent.
　Still more interesting is the fact that people´s rush to snap up land in the Valley has resulted in the department mobilizing far more revenue in the first nine months than the target set for the whole year.
　“Land revenue offices have already mobilized Rs 5.23 billion in revenue over the first nine months of 2008/09, whereas the target set for the year was Rs 4.80 billion,” said Basnet.
　The target set for the period was itself 45 percent higher than what the government mobilized last fiscal year. Officials at the department had been skeptical about realizing the target.
　“The collection has surprised every one of us,” said Basnet, who went on to add that it was still too early to say if the signs of stagnation now visible will deepen in the days to come.
　Given that the rise in realty prices has been unnatural, Nepal Rastra Bank (NRB) has instructed commercial banks and financial institutions to restrain further investments in the sector. The commercial banks have invested about Rs 30 billion, and a real estate bust, if happens, will straight away put these investments at risk.

　Posted on 2009-05-05
　KATHMANDU: In line with the high inflation the country has seen, the overall salary and wage rate index rose by 20.3 percent during the first eight months of the current fiscal year, as compared to a rise of 9.0 percent a year ago.
　According to a statement issued by Nepal Rastra Bank, the salary index during the period increased by 20.8 percent, whereas the wage rate index increased by 20.1 percent in the review period, compared to an increase of 8.4 percent previous year.
　The statement further said that the wages of agricultural, industrial and construction laborers increased by 26.9 percent, 10.6 percent and 18.1 percent, respectively, in the review period; whereas such increments last year were 6.0 percent, 11.6 percent and 10.9 percent, respectively.
　The statement issued by the central bank, entitled The Current Macroeconomic Situation of the country, however, painted a bleak picture regarding the rising general price levels and reported that the year-to-year consumer price inflation continued to remain high-- at 13.1 percent as against 7.2 percent recorded for the same period last year.
　The higher inflation was driven mainly by the significant rise of 17.1 percent in food and beverages prices, as against the 9.4 percent rise for the same period last year, stated the release. The report also added that the price index of the non-food and service group also increased by 8.8 percent, compared to a growth of 4.9 percent in the corresponding period of the previous year.
　Of the items in the food and beverage group, the price indices of sugar and sugar-related products increased by a whopping 53.0 percent, while the price indices of meat, fish and eggs and the pulses sub-groups increased by 25.2 percent and 24.6 percent, respectively.
　According to the report, exports during the period rose by 17.1 percent, thanks to a rise in exports to India, which rose by 3.6 percent, and exports to other countries, which went up by 46.1 percent.
　Similarly, total imports soared by 26.1 percent, compared to an increase of 19.2 percent in the corresponding period of the previous year. While imports from India rose by 13.1 percent, compared to a growth of 24.9 percent in the previous year, imports from other countries surged by 48.7 percent compared to a growth of 10.5 percent a year earlier, said the report.
　The overall BOP recorded a significant surplus of Rs 34.8 billion, while the current account registered a considerable surplus of Rs 28.9 billion during the period.
　"Such current account surplus was primarily due to the surge in net transfers, by 53.5 percent. Under transfers, workers´ remittances soared by 58.9 percent compared to the growth of 28.1 percent in the corresponding period of the previous year," said the report.

　Posted on 2009-05-05
　KATHMANDU: Nepal Bank Ltd (NBL) has announced its fourth phase of Voluntary Retirement Scheme (VRS) from Tuesday.
　"NBL employees who have worked for 20 years or more can put in their papers voluntarily," said said Laxmi Raj Poudel, human resources chief. "They will be given a golden handshake of two-and-a-half months´ salary for each year of their total service.”
The bank management has estimated that the VRS phase will cost around Rs 800 to Rs 900 million.
　"The estimate stands correct if 1,000 employees will take VRS," he said adding that the number of employees who take VRS might be smaller than 1,000.
　"Unlike the earlier three phases of VRS that were supported by the World Bank´s Financial Sector Technical Assistance Project (FSTAP), this VRS will be funded by the bank itself," Poudel added.
　The VRS idea was floated when the management of NBL and Rastriya Banijya Bank (RBB) was handed over to foreign executives in 2002 under FSTAP to re-engineer the two financial institutions and make them competitive.
　One of the reform measures undertaken by the foreign management was introducing VRS to downsize these two overstaffed public sector banks. RBB has also implemented VRS five times and is planning a sixth phase.
　At present, NBL has an employee strength of around 3,400. Assuming that 1,000 take VRS — that may not apply, however — the bank will in the next five to six years face a human resources crunch. "We have planned to induct around 300 young employees," he said adding that the bank has already planned on how to cope with the situation five years down the line.
　Similarly, Agriculture Development Bank Ltd (ADBL) also announed VRS for the fourth time to reduce its workforce. Nepal Rastra Bank, the central bank, has also implemented VRS under the financial sector reform programme.

　Posted on 2009-05-04
　KATHMANDU, May 3: Nepal Telecom (NT) has delayed the launch of new wireless mobile internet service that offers eight times faster data transfer than the one currently available. 　Some six weeks ago, the largest telecom company of the country had said it would introduce EVDO (Evolution, Data Optimized) service -- an internet service operating on advanced CDMA technology -- within two months. However, due to technical reasons, NT has revised the date and said it would take another one and a half months to launch the service.
　"We have almost completed testing the quality of the service," Rajendra Nakarmi, a senior NT official told myrepublica.com. "We are now fine tuning the network so that customers don´t have to face problem once the service is introduced."
　EVDO is a service which offers wireless internet service at a speed of up to 2.4mbps. NT´s wireless internet service currently available in the market offers data transfer speed of up to 253kbps only. This service, which operates on PDSN (Packet Data Serving Node) technology, can be accessed using 1x USB modems or PCMCIA cards.
　In order to use the new service, tariff of which has not been fixed yet, customers will have to get an advanced version of USB modem or PCMCIA card. "The ones the customers are currently using will not support the new service," Nakarmi said. However, to make things easier for the customers NT is planning to distribute the devices that support the new service itself. "We are working on issuing a public tender notice to procure modems and PCMCIA cards," Nakarmi said.
　The new wireless internet service of NT will initially be launched in Kathmandu, Pokhara and Banepa. "We have installed 13 base transceiver stations in Kathmandu and one each in Pokhara and Banepa," Nakarmi said. This, according to him, is enough to distribute around 25,000 lines.
　However, NT has clarified introduction of the new service in the three cities does not mean that customers will not be able to browse the internet from other places in the country. "They can access internet service from everywhere but the data transfer speed in places other than Kathmandu, Pokhara and Banepa will be less," Nakarmi said.
　This is because NT has not installed BTSs that support EVDO service throughout the country. Thus, in places where EVDO services are not available, NT´s system will 　automatically switch the user to the other network that operates on PDSN technology. This means that in places other than Kathmandu, Pokhara and Banepa customers will get a data transfer speed of only 253kbps

　KATHMANDU: The Ministry of Water Resources (MoWR) has proposed the government to give tax holiday for seven years for hydropower promoters. The ministry has also recommended to the government to give 50 percent tax exemption to the hydropower producers for another three years.
　The ministry has recently registered a bill to this effect in the parliament. Once the House passes the bill, it will be enforced as an act. However, independent power producers from the private sector are not satisfied with the government offer. They have demanded that the government provide total tax exemption for at least 10 years with effect from the date a project starts commercial generation.
　The Electricity Act-1992 had a provision of 15 years of tax holiday for hydropower producers. The provision was later annulled through a financial bill.
　The independent producers have argued that they should be given tax exemption for at least 10 years as the promoters get no return during the construction phase and have to continuously pay bank interests for seven to 15 years.
　The Independent Power Producers´ Association, Nepal (IPPAN), on Wednesday submitted a list of their demands and recommendations to the ministry, according to Executive Director of IPPAN Pradeep Gangol.
　"We have filed a list of our recommendations to the ministry, requesting the government to make amendments to the bill and introduce an investment-friendly policy through the upcoming budget," Gangol told myrepublica.com.
　He argued that the government should be ready to provide tax holiday for at least 10 years, if it wanted to attain its target of producing 10,000 MW of hydropower in 10 years.
　The bill proposes that the tax holiday will be effective only until 2019 April. But the promoters urged the government not to impose the time limit.
　The investors have urged the government to ensure that they faced no hindrances from other acts and authorities like finance, industry, commerce, forest and environment.
　"We proposed this to maintain policy consistency for at least 10 years, which is essential to attract domestic as well as foreign investment to the sector," Gangol said.
　The investors have also demanded exemption on excise duty and local development tax, among other duties and charges, arguing that these were additional burdens for the promoters who already bear geological, hydrological and other risks to start a project.
　Total VAT exemption in purchasing equipment, spare parts and other construction materials including cement, rods, fuel, lubricants, copper, aluminum etc is another demand of the promoters. They have asked the government to charge only one percent of customs charge. "Investors will not come to Nepal if we cannot ensure these things," Gangol said.
　The government while unveiling the budget for current fiscal year had announced VAT exemption in purchasing equipment and other goods for electromechanical portion of a hydropower project.
　The promoters have also objected to the proposed provision that says a project´s license holders should provide bonus to its employees and workers at a tune of two percent of the project´s taxable income each year.
　"Larger projects will have to spend a big amount if this provision is not scrapped. It is impractical in case of larger projects," said an investor.
　Likewise, the producers have strongly objected to a new provision on capacity royalty in the bill. "A provision about capacity royalty has increased the charges extraordinarily," the investor said.
　A 15-megawatt hydro-project promoter has to pay about Rs 247 million as capacity royalty as per the existing act while it will go up to Rs 1.04 billion once the proposed bill comes into effect.
　This provision will hit mainly small-scale hydro-projects hard and eventually domestic as well as international investors will shy away from investing money in the sector, argued another producer.
　Likewise, they have suggested the government to "directly or indirectly prohibit foreign investment in small projects generating up to five MW so as to encourage domestic promoters in such ventures."