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Monday, June 29, 2009
Alpine Air Deal
NLHDA Submits Suggestions
Nepal Land and Housing Development Association (NLHDA) has submitted the list of suggestions for developing the land and housing business in the country to the newly elected minister for land development and management along with a congratulatory letter.
“The government has been generating revenue of Rs 7 billion per year through the real estate business alone,” said Nepal Land and Housing Development Association president Iccha Raj Tamang. Mentioning that real estate has been providing employment opportunities to many people, Tamang urged the government to allocate the required budget for developing this sector.
“In order to minimize problems in this sector, the government should end the unscientific methods of giving permission to developers first,” said Tamang, developer of Civil Homes Pvt Ltd. He added that the gov- ernment should collaborate with the private sector for developing master plans of various projects. “Real estate business has to be established as an industry,” Tamang said adding that the entire land and housing development sector should be computerised in the days to come.
Newsprint Price Down
he price of newsprint has gone down considerably as compared to prices earlier, but it is expected to increase again shortly. Most newsprint is im- ported from Korea and India, and due to drop in the international market rate the price gone down by around Rs 10 per kg. Basic newsprint was Rs 83 until a few months back and has gone down to Rs 73.
“Prices came down due to international rates going completely down. Since we buy it at a much lesser price we are selling it at a nominal rate to buyers,” said Rama Bharati, assistant manager of the paper department at Salt Trading Corporation. Glaze News Print (GNP) is priced the same as before, at Rs 95. “Because the quality of GNP is better even though it has not seen a decrease we have not increased its price,” added Bharati.These prices will remain intact for the next three months but are subject to change after that. “The market will stabilize and factories will increase their prices. That will happen in the next two to three months, after which we will not have a choice and a definite price hike will take place,” said Bharati.
Prices for paper are set according to kilogram. Basic newsprint is available at Rs 73 per kilo. It comes in rolls of twenty-seven inches and thirty-two inches and one roll is almost about 400 kilos. Indian newsprint on the other hand is available at Rs 60 per kilo and is cheaper compared to the Korean product.
NATTA Hails Airfare Currency Shift
“Ours was the only country charging airfares in dollars but with the new regulation of Nepal Rastra Bank (NRB), we too will be adopting with the international norm of using our currency in airfare tickets,” said Ram Kaji Koney, president of Nepal Association of Tour and Travel Agents (NATTA), during a press meet here today. According to the NRB regulation, from July 1 all the registered international airlines and cargo and courier agencies will have to take their service charges in Nepali rupees (NRs). The repatriation of sale made in NRs should also be done in NRs while repatriation of sale made in foreign currency should be done in foreign currency. The required repatriation amount will be granted by the related commercial bank according to foreign exchange rates. The service provided by Civil Aviation Authority of Nepal (CAAN), Nepal Oil Corporation (NOC), ground handling agent, catering company/agents, and other service providers at the Tribhuwan International Airport (TIA) such as take off/on, navigation, housing, ground housing, catering, fuelling should use the current day exchange rate while presenting their bills in both in NRs and foreign currency “Airfares in foreign currency was a chronic problem due to which Nepali currency was always devalued but now we are content with the circular,” said Koney. Though its implementation will be from July 1, there will be prior planning regarding implementation process, Koney said adding that now the process will be simplified and they won’t have to go NRB. The processing can be done by commercial banks here. The NRB regulation came due to NATTA’s year-long efforts to have air ticckets charged in Nepali currency. Earlier, except Nepal Airlines all the foreign airlines used to charge airfares in dollars. “We were trying to get the issue of charging airfares of foreign airlines in Nepali currency settled but it took time due to lack of coordination. Travel agents used to bear huge losses due to the fluctuating price of the dollar,” Koney said |
Candid Do’s for The Budget
In the course of forming the budget for the fiscal year 2009-10, the government should be serious in its political efforts to write the new constitution and provide relief to the general public as well. In addition, here are some candid suggestions for making the new budget which will help meet the minimum expectations of people.
• Enforcement of rule of law and security all over the country (end to impunity, lawlessness and bandh culture) • Clear vision about growth-oriented economic policy (emphasis on pro-poor and inclusive
policies) • Tighter fiscal management by targeting subsidies at a marginal class
• Comprehensive industrial policy with labour flexibility (address labour problems with the right to invest
and investors) • Financial sector reforms by raising foreign direct investment in major industrial areas
• Favourable investment climate by introduction of investment allowance and lower corporate tax rate to spur growth
• Incentives for private sector investments in health care and infrastructures status for making inclusive growth a reality
• Tax holiday for 100 per cent export oriented units to receive investment in export production capacity
• Special export incentives for readymade garments, carpets and other value added exports to create jobs for jobless workers
• Immediate action against power shortage problems through purchase agreement with India and warfooting action plan for constructing transmission lines (on both sides of the border) • Focus on increasing the overall share of non-agriculture sector in the economy
• Immediate action to reduce inflation to single digit
Dr Nepal is former chairman,Securities Board of Nepal
Going The Way of All Summer
Summer and the attendant rise in temperature has one inevitable effect: wardrobe makeover. One packs the woollies with mothballs, and the need for new summer clothes and the best places to go shopping arises.
This summer has several designs and colours on offer for Nepali girls. Neon colours have been in the market since spring and are omnipresent, They sure are here to stay for sometime.
The most crowed hubs in town for summer shopping are New road, Thamel and undoubtly Durbar Marg.Thamel is mostly known for the hippie patchwork or a cool chic micro mini. It is without doubt the best place to buy skirts. “Though it tilts more towards the hippie era, Thamel is the best place for summer shopping as fabrics used are mostly cotton and linen and the clothes are always bright and colourful,” said Jyoti. Sherchan, owner of Vives Boutique. Although you can’t expect the clothes you buy here to last more than a season, the prices are usually so cheap that it doesn’t really matter.
Second on the list is New Road, with the maximum amount of choices in this zone. “Items like leggings, which are a huge part of winter apparels, can also be ideal for milder days in summer,” said Bharati Upadhya of Gossip. The colours and styles seem to be influenced by the psychedelic hippie era, the retro style as well as the sleek and streamlined lines of today
“Even if synthetic materi- als are more in vogue because of the way they fit the contours of your body, cotton fabrics are also available and are best suited for summer,” said Lekhnath Adhikari of IN TOTO Enterprises
The clothes are reasonably priced and of course bargaining is always an option. “Party wear is another speciality of this zone and all sorts of clothes from ones with spangles and glitter to simple styles can be found,” said Nripesh Shresth, owner of UFO. A few shopping complexes in Putalisadak offer similar fashion options. The third one in the row is Durbar Marg which is Nepal’s upmarket fashion district. With ‘Labels’ and ‘United Colors of Benetton’ camped here, it is a fashion haven for people who look for branded clothes . The summer fashion trend also seems to be a bit more subdued with clothes in solid colours and pastels rather than kaleidoscopic designs of Thamel. The hippie style is discarded for more sleek lines and streamlined cuts and prices are nearly twice or thrice as those in Thamel and New Road. However, the clothes seem more durable.
Meanwhile, winter clothes are edging out of the market and that too in a Pepe way as a sale. “Winter clothes are on sale and one can buy them at lowest possible price with 30 to 40 per cent discount,” said Sagun Maharjan, sales person at Tamrakar House.
HAN Calls for New Craft for NAC
Hotel Association of Nepal (HAN) has urged the government to buy at least two airplanes for Nepal Airlines to make Nepal Tourism Year 2011 a successful. Reduction in parking and landing charge for airlines is also another HAN demand. A group of hoteliers led by HAN president Prasiddha Bahadur Pandey met Finance Minister Surendra Pandey here today and urged him to implement multiple VAT rates. They also urged to revise VAT rates to boost the sector. They urged the finance minister to return three per cent of VAT as the hotels are using non-VAT items like agriculture products. They also asked for exemption from income tax for hotels like other foreign exchange earners. “It will help us upgrade the standard of the industry,” HAN said
Exemption from custom duty for hotel items is another demand that HAN put before Pandey. It wants the budget to provide zero customs duty on goods purchased for upgrading hotels and other tourism sectors. “The budget should have rehabilitation programmes for the ruined tourism industry,” it said.
HAN wants no visa fee policy for the next two years to fulfil the target of Tourism Year 2011. The Ministry for Tourism and Civil Aviation (MoTCA) has set a target of one million tourists in 2011. Further, HAN requested for continuation of the provision of previous budget which gave rebate on interest if tax is submitted within prescribed time.
The new budget must reduce tax burden of hoteliers, HAN said. According to HAN, hotels are paying around 37.2 tax comprising all taxes like VAT in service tax, corporate tax and income tax. “Income tax on service tax should be abolished,” it said.
Etihad promo
Etihad Airways has launched a ‘June Festival’ sales promotion which offers UAE travellers amazing fares for an array of global destinations which include London, Milan, Manchester, Johannesburg and New York. The promotional return fares start from Dhs 1,790 for economy and Dhs 8,990 for business flights to Frankfurt, Johannesburg and London (all fares exclude taxes and surcharges). Customers can also fly to Milan from Dhs 1,990 in economy and Dhs 8,990 in business class; Dublin from Dhs 2,190 in economy and Dhs 8,990 in business; New York from Dhs 2,990 in economy and Dhs 13,390 in business class.
Social Network
Federation of Nepalese Chambers of Commerce and Industry (FNCCI) has formed a network — Civilian-Entrepreneurs’ Network — to pressurise the government to establish peace and bring culprits to book. The network includes FNCCI members, industrialists, businessmen, human rights activists and professional organisations, FNCCI said. The network is planning to submit a memorandum to Prime Minister Madhav Kumar Nepal for strong action to end impunity and anarchy.
Listed Hydropower Companies
Currently, there are only three listed hydropower companies — National Hydropower, Butwal Hydropower and Chilime Hydropower — at Nepal Stock Exchange. After Arun Valley’s listing, there will be four hydropower companies. National Hydro Power has listed its 13,851,862-unit shares at a face value of 100 per unit making it a total of Rs 1,385,186,200. Butwal Power Co Ltd has listed its 8,390,577-unit shares at a face value of Rs 100 per unit making it a total of Rs 839,057,700 and Chilime Hydropower Co has listed its 7,296,000-unit shares at a face value of Rs 100 per unit making it a total of Rs 729,600,000. The total number of hydropower companies’ shares stands at 29,538,439-units worth Rs 2,953,843,900.
Good Response to Arun Valley IPO
Arun Valley Hydropower Company received good response to its primary issue. On the first day yesterday, 7,000 applications worth Rs 160 million were files its Initial Public Offering (IPO). It has floated 5,15,000-unit primary shares from yesterday.
It has added a premium of Rs 84 to the face value of Rs 100, making it Rs 184 per unit share. According to the new Securi- ties Board of Nepal (Sebon) regulation, a company can add premium equal to its net worth, if it is in profit and has distributed cash dividend for three consecutive years. Arun Valley has done so. It distributed 20 per cent cash dividend from the profits of last fiscal year.
Arun Valley Hydropower — that constructed Piluwakhola Hydropower in Chainpur of Sankhuwasabha district — has been providing 20 per cent cash dividend from the profit over three successive fiscal years.
Interested applicants can apply for a minimum of 50-unit shares of Arun Valley while a minimum 20-unit can be applied for of Chilime Hydropower.
The maximum number of units one can apply for of Arun Valley is 50,000 while for Chilime it is 1,000 only.
NMB Bank is the sales and issue manager for Arun Valley’s primary issue while the issue and sales managers of Chilime’s primary issue are NIDC Capital Market and Citizen Investment Trust (CIT). The company — established in 1997 and promoted by Guru Prasad Neupane, Jeevan Raj Shakya and Amar Raj Tamrakar — to develop, build, own and operate hydropower projects, formed joint ventures with companies to build medium and large hydropower projects and develop entrepreneurship for the promotion of the hydropower sector’s currentlyowned Piluwakhola Hydropower Project (3MW). The promoters own 12,00,000-unit shares and the remaining 17,15,000-unit shares will be floated for the public.
Arun Valley is planning Upper Piluwa Khola Small Hydropower Project (4.5MW), Lower Phemekhola Small Hydropower Project (2.2MW) and Kabeli-B1 Small Hydropower Project (9.8MW). The new investment partner of the hydropower company will be Janata Bank that is promoted by Guru Prasad Neupane and is in the process of getting the licence of a commercial bank.
However, Chilime Hydropower has suspended its much awaited IPO after a court order. It had planned to float its 23,04,000-unit shares from June 15 adding a premium of Rs 223.70 to the face value of Rs 100 per unit, making it a total of Rs 323.70 per unit share. But the locals of Rasuwa, where the hydropower project is located, have locked the project demanding shares and the company has agreed to give them eight per cent shares. Under the new regulation, Sebon permitted Chilime to give five per cent shares only to the locals and they moved court saying it was against the earlier agreement with Chilime
Today the Court fixed another hearing on Chilime on June 29.
Long-term Practical Steps Required
Nepal Chambers of Commerce wants the budget to be more practical and target-oriented.
NCC hopes the budget will incorporate more long-term projects and programmes which have a lasting positive effect on the economy. The budget should focus on the development of rural areas and rural economy.
NCC believes that without sustainable peace, no business can flourish and without business/investment economic development is a distant dream. So, the first priority of the government should be establishment of lasting peace and favourable business environment. For favourable business environment and sustainable peace, the government should immediately put an end to bandhs, chakkajams, strikes and road blockades. It should protect investors and their investment and secure their right to do business. Only then will a favourable environment be created for the private sector’s de velopment.
The budget should focus on development of key areas like agriculture, hydropower, tourism, manufacturing sector and infrastructure development for economic growth. The budget should promote Public-Private-Partnership (PPP) in infrastructure development and clearly define the role of the private sector in this approach.
NCC further believes that the budget should emphasise on creating more jobs so that we can stop the younger generation migrating abroad. We have been urging the government to abolish the syndicate system and scrap the scrap tax which will give relief to people from spiraling price hike The proposed property tax should not be implemented before a new Constitution comes into effect Also, no new tax policies should also be implemented in this period.
NCC demands the implementation of multiple VAT for its effectiveness and generation of more revenue. The single VAT rate has been ineffective and most contentious since its implementation.
Also, the VAT system should be reformed so that exchange of bills becomes feasible in transactions. The existing labour policy is a major bottleneck in Nepal’s industrial and economic growth. The rigid labour policy is the main reason for low productivity and disputes between management and employees. So, the budget should amend this policy and make a new liberal and investment-friendly labour policy. The government should ratify the foreign investment policy, industry policy, commerce policy and hydropower act in the House, form the proposed Investment Board and set up Special Economic Zones within a month.
The consumer policy should be rectified and made business friendly as businessmen also are consumers. The budget should allocate funds for upgradation of TIA and construction of a new international air port. Similarly, new regional airports should be constructed in districts like Pokhara and Rupandehi. For development of hydropower sector, the budget should waive taxes on investments made in hydropower and provide tax holiday for 10 years.
Similarly, industries using local raw materials should also be granted this facility.NCC wants the budget to promote Information and Communication Technology in Nepal and also increase use of ICT among the general public by cutting customs duty and providing VAT free facility.
The government should also implement egovernance for better service and good governance. Climate change will be the biggest hurdle in the growth of LDCs like ours. Already, Nepal has started facing the effects of climate change in the agriculture and environmental sectors. So, NCC wants government to allocate fund for tackling this issue before it is too late. Malakar is president of Nepal Chambers of Commerce.
Saturday, June 27, 2009
Airfares in NRs from July
Nepal Rastra Bank (NRB) has issued a regulation to charge Nepali currency for all air tickets issued from Nepal with effect from July 1. After decades, airlines here will be accepting Nepali currency for airfares of both Nepali and foreign citizens getting their air tickets from Nepal. An excited Nepal Association of Tours and Travel Agents (NATTA) president Ram Kaji Koney said, “We happy to have achieved our target after a year of continuous endeavour to get NRs used for airfares.” NATTA had recently received a circular in this regard. “All air tickets issued from Nepal will be displayed in NRs, this is a kind of honour to Nepali currency,” said Koney. Earlier, except Nepal Airlines Corporation (NAC) all the foreign airlines used to charge airfares in dollars. “Efforts were on for the use of NRs in foreign airlines’ fare. Travel agents were forced to bear huge losses due to the fluctuating value of the dollar,” Koney said.
“NRB being the authorised body helped coordinate with Civil Aviation Authority of Nepal (CAAN), Nepal Oil Corporation (NOC), Nepal Airlines Corporation (NAC) and Board of Airlines Nepal (BARN),” said Koney
Most of the travel related problems would be sorted out as the cargo and courier services, GSA, online, PSA and airlines — will be solved.
CFC Gas Dump
Around 19 tonnes of chloro-floro carbon (CFC) gas is lying useless in a godown of Biratnagar customs for the past nine years. Kathmandu-based Heritage Company was importing the gas when the government banned it following a Supreme Court order saying that CFC is a major cause of depletion of ozone layer. The stock in the godown is polluting the surroundings. Trans Nepal, is the company which runs the godown on lease basis.
Revenue Drive
More than Rs 24 million revenue has been collected by different government offices in 11 months of the current fiscal year in Myagdi district. District Auditor General’s Office said the revenue was collected by 22 government offices till end of the Jestha month. During the period, the District Administration Office collected the highest amount of revenue with more than 14 million rupees and District Prison Department collected Rs 300 only.
Carlsberg Concept
The year 2009 marks the 100 year aniversary of a scientific breakthrough at the Carlsberg laboratory in Copenhagen providing quality and safe products to consumers — the pH scale. Professor Jens O Duus, head of the Carlsberg laboratory, said, “S P L Sorenson was capable of systematically creating a whole new concept by the exact defination of the pH scale, enabling us to produce a high quality product”. The 100th aniversary of the pH breakthrough will be marked at Carlsberg and at the international congress “The Centenary” at the Italian Chemical Society in September 2009.
Stop White Collar Crime, Corruption
Our economy is suffering from impunity, red tape, white collar corruption, bad governance and industrial unrest. Sloganeering and CA elections have hyped people's aspirations. The industrial sector was hopeful but nothing was delivered for peace, development or an industry-friendly environment. Even the budgeted development expenditure was not spent
Other countries are moving ahead with demand and supply based on comparative and competitive advantage. Where are we heading? Can we sus tain whatever employment we have or whatever industrial input we have? After elections, Nepal got a new political regime and the economy should have taken off and become self-driven.
However, this is not possible without understanding the Common Economic Agenda (CEA).Still, it's never too late and the new budget could be a step in that direction
Some broad areas are outlined below for consideration in the new budget
• Time-bound one- window mechanism for the industrial sector to attract investments
• One-window commit tee to allow fast-track decisions for new hydro projects
• Opening up new sectors in tourism and developing Nepal as the hub of South Asia
• Implementation of laws and policies for better investment environment
• Built confidence of the private sector and fight white collar corruption especially in the revenue
administration
• Link India and China with Nepal as transit facilitator.
Explore the potential to complement and supplement Sino-Indian opportunities for generating employment
• Develop Nepal as a service sector economy
• Develop Nepal as an offshore centre (we already have a law on this)
• Implementation of SEZs
If we cannot deliver development, equitable opportunity and economic rights, political conflict in Nepal will never cease and peace can never return While drafting the new constitution it is up to us to take socio-economic rights as basic and fundamenta rights of the people and the budget can be the first step to empower the people Khetan is president of the Young Entrepreneurs’ Council
Knowledge Series
Heidelberg Knowledge Series (HKA) III and IV concluded on June 19. According to a press statement, organised by Beesants Trading Co Pvt Ltd these programmes are meant to educate, share, and build on the knowledge of 'Possibilities in offset printing in Nepal'. The five-day training programme was conducted from June 15-19.
Tuesday, June 23, 2009
Make Nepal Sino-Indo Transit Point
onfederation of Nepalese Industries (CNI) wants the government to continue with pro-industry policies and programmes. The pressing issues that are hitting the business and industry sectors are energy crisis, labour disputes and frequent bandhs and strikes that the new budget should address immediately. CNI is concerned over the rising price that is an against the world trend. CNI wants the budget to focus on immediate ratification of Foreign Direct Investment Policy, establishment of Investment Board and product-specific Special Economic Zones (SEZs) and formation of industrial security force to make an investment friendly environment for double digit growth. The SEZs that are proposed for Jhapa, Dhanusha, Birgunj, Panchkhal, Jumla and Dhangadhi should be supported by industries like cement factories in Udayapur, Hetauda, Dang and Surkhet.
Likewise, CNI wants an end to the syndicate in the transport sector and also stopping the practice of calling road blockades. Industrial revolution is necessary to end unemployment. The budget should provide tax rebate for large scale industries that employ above 500 staffers as this would encourage industries to generate more employment.
CNI also wants the budget to bring provisions that could provide special facilities to those industries that hire over 25 per cent women workers. The new budget must reduce custom duty on raw materials
CNI requests the government for a policy of returning customs duty of export industries and establishment of a high-level revenue board with participation of the private sector.
For tourism, CNI proposes an international airport in Neejgarh of Bara district and regional airports in Pokhara and Bhairahawa. The government has declared the year 2011 as Nepal Tourism Year targeting to welcome one million tourists. To attract more tourists, CNI also proposes that the government make heritage hotels in old palaces.
Nepal needs a long-term policy for modernisation and commercialisation of the agriculture sector. Infrastructure development is another key aspect of our economy that the budget needs to give priority to. CNI proposes that an Infrastructure Development Bank with Public-Private-Partnership (PPP) model be developed along with construction of East-West railway in the Tarai as well as roads in the hills.
CNI also wants to see Nepal as a transit point between two fast growing economies — India and China — through the construction of North-South highways in Mahakali, Karnali, Kali Gandaki and Koshi river corridors. The budget must spell out policy measures to end energy crisis including simplification of licensing process and also no license for up to three megawatt (MW) hydropower projects. To encourage hydropower generation, the budget should ensure there is no environment impact assessment for up to 50 MW hydropower generation.
CNI also urges the government to mobilise all its diplomatic missions abroad for economic diplomacy to encourage Nepali exports.
Chaudhary is president of the Confederation of Nepalese Industries.
Experts Tips for Successful Budget
The budget should be based on the Three-Year Minimum Plan and Common Minimum Programme (CMP), suggested Dr Pushparaj Raj Rajkarnikar, former member of National Planning commission (NPC) at an interaction at Reporters’ Club here today.
Agriculture, hydropower, tourism and infrastructure development are the key areas the budget should address for economic growth, he said.
Previous governments also brought some good programmes like literacy programme — that could bring social transformation needed for economic development — and fast-track construction, Rajkarnikar said adding that the private sector did not come forward for the much-talked Fast Track Road construction due to frequent bandhs and insecurity.
“The private sector is not willing to invest,” he added. “It should be taken into confidence and the cooperatives sector groomed, apart from making the budget inclusive and a socially transformative one.” Finance Secretary Rameshwor Khanal also agreed the private sector has to be taken into confidence and that the government should create an investment-friendly environment.
“Commercialisation of agriculture thereby creating more jobs in agriculture, industrial security, expansion of road network for access to markets, and focus on spending on health and education for long term socio-economic change are the priorities of the budget,” he said adding that postconflict rehabilitation, relief and reconstruction are also important factors that the budget would not fail to address.
The private sector has suggested consistancy in revenue policy and the finance ministry is positive on that, he assured the business community.
“For implementation of long- term projects, the government is thinking of a multi-year budget,” Khanal added
However, Federation of Nepalese Chambers of Commerce and Industry (FNCCI) president Kush Kumar Joshi said that the security is key to industrial development.
“Industrial Security Force, solution to energy crisis, increasing competitiveness by scrapping the scrap tax and implementing multi VAT and boosting investors’ confidence are vital for employment generation,” he said adding that the budget must ensure peace in the industrial sector.
“Due to low export and high im- port, trade deficit of Nepal with other trading partner countries is widening hugely,” said Prof Dr Bishwhambher Pyakurel.
The trade deficit is at Rs 208.51 billion currently and is estimated to go up to Rs 330 billion by the end of the next fiscal year.
“Currently import is double the export,” he said adding that the contribution of industrial sector to the gross domestic product (GDP) has been decreasing.
He pointed out that the projection of the budget would fail if there was no coordination between Monetary Policy and Fiscal Policy. He also suggested forming a mechanism under the finance secretary to make fiscal and monetray policies compatible.
The Public-Private-Partnership concept has come to Nepal a long time ago but it has not moved forward
FNCCI has prepared a technical paper on the modality of PPP.
“Government apathy has made the PPP only a slogan,” Prof Dr Pyakurel complained.
Nepal Chambers of Commerce president Surendra Bir Malakar urged the government to bring multi VAt system for effective revenue mobilisation. He also suggested expanding tax net rather than increasing tax rate.
NPC former vice-chairman Dr Narayan Khadka advised the government not to bring out a populist budget.
RBB Cash Crunch
Rastriya Banijya Bank, Dhading branch, has run out of cash. Pension distribution is affected and cheques of Rs 3,000 could not be exchanged due to cash crunch in the bank, said the bank staffers. Though the bank sent a request to the head office for cash earlier, the shipment has not come yet, they said.
APLT Seminar
Alltech Biotechnolo gy USA and Nimbus organised the 22nd Asia Pacific Lecture Tour (APLT) 2009 on Monday. The lecture tour was aimed at providing latest updates on nutritional technologies worldwide in areas of livestock and poultry feed. More than 70 prominent industry enterpreneurs, veterinarians and government officials attended the lecture on ‘The Sustainability Principle’ to deal with traceability, sustainability, feed costs, industry challenges and opportunities in every aspect of the business. Alltech Biotechnology USA is one of the world leaders in animal nutrition and biotech animal feed supplements. Nimbus is a leading agri-based company and manufacturer of Shakti brand cattle and poultry feed. Nimbus regularly organizes lecture tours here in collaboration with Alltech USA.
NATA Condemnation
Nepal Agricultural Technician Association (NATA) has issued a statement condemning the act of vandalizing the personal vehicle of Shiva Ram Simkhada, chief of Flower Development Centre, Godavari
According to the statement, Simkhada’s personal vehicle was vandalized when he was on his way home to Nayabazar, Kathmandu
Alltech Picks Nimbus as Official Feed Partner
Alltech Biotechnology USA, world leader in animal nutrition and biotech animal feed supplements has named Nimbus official partner of ALLTECH FEI World Equestrian Games 2010. “In association with Alltech, Nimbus aims to cover the whole livestock and poultry feed industry in the global arena,” said Nimbus managing director Anand Bagaria adding that the company has targetted to cover the 30 per cent of the market share within few years span. The company provides direct employment opportunities to 600 people while 5000 people are indirectly employed by Nimbus.
The current annual turnover of the company is Rs 2 billion and MD Bagaria announced that the company would reach a targetted annual turnover of Rs 5 billion through this partnership. Besides nationwide networks, Nimbus also exports feed to Indian mar kets. In keeping with the motto, ‘Healthy animals means healthy returns’, the company has launched various nutritional feeds for animals in the market.
“It is due to similar ideals, quality conciousness and the desire to bring new technology to the farmers that Nimbus has been selected as the official partner of Alltech,” said Alltech general manager Chris Kane. He added that returns on investment is a key aspect of his company adding that it is the only company that addresses the key challenges and nutritional needs organically.
“Nimbus is proud to be the official partner of Alltech for Nepal,” said Bagaria. The 2010 Alltech FEI World Equestrian Games will take place over 16 days in Lexington, Kentucky, from September 25 to october 10, 2010. Alltech is also title sponsor of the game. Tickets will not go on sale until sometime later in 2009. The ticket deposit and other programmmes will be introduced before then.
Focus on Investment
As the umbrella organisation of the Nepali Privatet sector, the Federation of Nepalese Chambers of Commerce and Industry (FNCCI) wants this budget to focus on increasing investment — in short, it should be an ‘investment budget’.
Without an favourable investment-climate and increased investment, economic development would be a distant dream.
To create an investment- A friendly climate, anarchy and the culture of bandhs, strikes and road blockades — that are bleeding the business white — should be immediately stopped. If bandhs continue, industrialists will be compelled to close their business further fuelling unemployment problems. The government should bring a provision where businesses can get compensation for losses caused by bandhs, strikes and road blockades.
The government should also take strong measures to promote investment in productive sectors. The budget should be guided by the value of production.
The security of investors and their investment are the main problems in Nepali private sector. Other obstacles are dilemma in adopting an economic policy and laws, their implementation and the prevailing energy crisis. The budget must encourage generation of wind energy, solar energy and energy from wastage.
The budget should also promote private public s the umbrella organisation of the Nepali private sec partnership (PPP) in infrastructure development, enhance the purchasing power of consumers and promote good governance.
It should focus on strengthening joint public-private investment with greater leverage to the private sector
We suggest that the budget set a growth target of eight per cent for the fiscal year 2009-10 because it is a prerequisite for fast development.
Nepal can achieve this target if there is peace and a businessfriendly environment. For speedy development, the government must immediately ratify foreign investment policy, industry policy and commerce policy in the House, form the proposed Investment Board and set up Special Economic Zones (SEZs) within a month.
Stable tax policies en- courage businessmen to invest more. Thus, FNCCI opposes any new tax policies that government might introduce before the country gets a new Constitution
The budget must address the private sector’s de- mand of multiple VAT at 1, 4 and 13 per cent instead of the present 13 per cent VAT.
There has been a huge leakage in revenue due to single window VAT. If multiple VAT comes into effect, the government will be able to generate more VAT revenue. The budget must waive taxes on investments made in hydropower and reduce corporate tax by five per cent to 20 per cent which now stands at 25 per cent. The Kabadi Tax (scrap tax) must be scrapped and the proposed property tax should not be implemented before a new Constitution comes into effect.
The manufacturing sector should not be charged more than 8-10 per cent interest rate. The industries hit by conflict should get a chance to reschedule loans and get waiver on interest for the duration of the conflict period.
The budget should also declare tax holiday for 10 years to industries that use domestic raw materials
To encourage domestic production, the budget must make it mandatory to buy domestic goods for official purposes.
Apart from deteriorating law and order, power crisis and other infrastructure related problems, the budget must also try to resolve the private sector’s pressing problems like labour disputes.
The government should ensure a liberal labour policy that guarantees ‘No Work, No Pay’ and ban politically-affiliated trade unions. Trade unions should be apolitical (Joshi is president of the Federation of Nepalese Chambers of Commerce and Industry )
Flight From Holland Again
TUI/Arke Fly of the Netherlands is planning to re-launch direct flights from Holland to Nepal from October 2009. At first, there will be one flight per week which could be increased as per the market demand in future.
Nepal’s ambassador to Hol- land Pramesh Kumar Hamal said increased air connectivity to Nepal from the market hubs of Europe such as Holland would have a positive effect on the resurgence of tourism in Nepal. Speaking during a programme organised under joint auspices of Nepal Embassy in Brussels and TUI/Arke Fly Group of Holland, envoy Hamal said Nepal has adopted a liberal and open sky policy in view of its own landlocked status.
“Arke Fly would be able to tap the already existing market demand for direct air connection to Nepal,” he said, stressing on the priority accorded to the tourism sector. He added that a new tourism policy has recently been brought out and the campaign ‘Nepal Tourism Year 2011’ has been launched.
Hamal highlighted the unique and unparalled attractions of destination Nepal and underscored the need to harness the rich potential of tourism development for the benefit of Nepalis.
TUI/Arke Fly chief executive officer Steven Vander Heijden said Holland’s past experience in direct flight operations to Nepal would help restart the air link. “The decision to resume flights to Nepal from October 2009 draws a lot from those experiences,” he said adding that Nepal has a magnetic charm as a tourist destination.
Transavia and Martin Air used to fly to Nepal in the past.
Another NRB Rap on NDB’s Knuckles
Nepal Rastra Bank (NRB) has asked the troubled Nepal Development Bank (NDB) to clarify its Board of Directors’ stand on the clarification letter that it submitted to NRB on Thursday.
The NDB submitted its explanation — signed by its chairman Amar Gurung — to NRB but NRB said it had sought clarification on why the ailing development bank should not be liquidated from its board, said a high ranking NRB official.
The NRB letter has asked NDB’s board to clarify its stand. “If the clarification is from the board also, the minutes of the board meeting also have to be submitted along with the clarification,” the official said adding that the minutes of the board meeting are a must if it is the board’s decision.
“It is unclear whether it is the NDB chairman’s personal explanation or the reply of the board of directors.” “Yes, we have received a query letter,” NDB acting chief executive officer Purna Prasad Sharma said adding that the board is meeting to darft a clarification to NRB after it received the letter.
On June 18, NDB submitted a complete capital plan but also sought time till October 17 to improve its financial health. It claimed that given the opportunity, it could sell shares of various institutions and get back the deposit from National Cooperatives as instructed by NRB. However, it still needs an additional Rs 70 million capital injection even after it manages to get its money back.
However, there isn’t any guarantee that NDB will make amends as it has repeatedly been flouting the central bank’s directives. Individual depositors will get their money back since the financial institution has Rs 16.5 million in cash and Rs 160.3 million bank deposit.
The NRB’s findings show the Employee Provident Fund (Rs 331.4 million) and the Nepal Army (Rs 180 million) might not get their money back but small depositors need not worry. NDB has around 20,000 shareholders and 3,500 depositors.
If NRB finds the clarification unsatisfactory, it will file a case at Patan Appellate Court to press for NDB’s liquidation. NRB has already seized all its assets and frozen the accounts in various financial institutions
NDB — the nation’s first development bank — started operations in 1998.
Though it has a paid-up capital of Rs 320 million, it ran into huge losses, pegged at Rs Rs 690.2 million till the end of midMarch.
Its non-performing assets are at 55.09 per cent and capital adequacy ratio (CAR) stands at a whopping 48.31 per cent. As per rule, a bank must maintain its CAR at 11 per cent.
New Toshiba Notebook Hits Market
Toshiba’s Computer Systems Division (CSD), a division of Toshiba Singapore Pvt Ltd and a leading provider of mobile computing solutions, today announced the expansion of its mini notebook range with the new Toshiba NB200.
The addition o the NB200 expands product line-up to meet ever-increasing demands of consumers and exemplifies Toshiba’s reputation for quality tha they expect and reflects the company’s long his tory of building mobility platforms. “Combining style and state-of-the-art technology, this 10.1” mini notebook meets consumers’ mobility needs and reflects their modern digital lifestyle,” read a press release. It has a unique matt finish and compelling pleated textured cover design with a chrome hinge that appeals to the visual and tactile senses. For initial ship ment, NB200 will be available in this year’s most fashionable colours: Satin Brown. Other colours — Snow White, Indigo Blue and Silky Pink — will be added to the portfolio later.
“As consumers are placing greater emphasis on the design aspect of their mobile device, our new NB200 responds to this demand and offers a perfect balance of portability, quality and usability without compromising any of these,” said Wong Wai Meng, senior product marketing manager for Toshiba’s Computer Systems Division. “The smaller that devices are, the more consumers value the design aspect
We very much took this into account. The new Toshiba NB200 represents an elegant design statement.” The stylish NB200 also offers peace of mind with a 3D HDD protection sensor. Weighing a lightweight 1.18kg with 10.1-inch display, the NB200 offers users full QWERTY raised-tile keyboard making typing a breeze.
It is available at Rs 46,900 (inclusive of 13 per cent VAT and Toshiba carry-case) and is available at all Toshiba authorised resellers.
Lokta Paper Standards To Be Fixed by June-End
In mid-Asad, the Nepal Bureau of Standards and Measurement will decide the minimum standards required for Nepali Lokta paper to be used in government documentation.
A committee of the Nepal Handmade Paper Association (HANDPASS) along with Lokta paper experts will be interacting with the standards bureau for proper standards of Nepali Lokta paper that is to be used from the new fiscal year in government documentations.
“The standards bureau will soon fix the standards according to the use of paper for documentation purposes,” said Dr Milan Dev Bhattarai, president of HANDPASS.
Nepali handmade paper recently got approval to be re-used in government correspondence and it has already got its brand registration with the EU. In the past, the paper used to be compulsory for government legal correspondence but it was suddenly discarded.
According to Bhattarai, the bu- reau will decide the parameters including thickness, size, tearing strength, printability of the paper, weight of the paper, colour of the ink to be used and other minimum standards
“ We think the handmade paper that is to be used in citizenship certificates should at least have a weight of 250-350 gram per square metre (GSM) while in the case of Tippani Aadesh the standard weight should at least be 30 GSM,” said Bhattarai adding that the weight of paper may vary from 12, 50 to 60 GSM
“We have an open-border problem, but it will be definitely minimised by quality consciousness in customers,” he said.
Talking about the procurement cost of handmade paper at the government level, he said it needs at least a budget of Rs 20 million for the new fiscal year.
Along with it, the total turnover of the government will increase to Rs 40 million.The technical committee also has forwarded proposals regarding the use of Nepali handmade paper for the preparation of citi zenship certificates. According to Bhattarai an in- crease of about 15 per cent was observed in the total export of Nepali handmade paper this year compared to the last fiscal year. Paper worth Rs 300 million was exported during the present fiscal year.
Major countries importing Nepali Lokta paper are Switzerland, England, France, Germany, the USA, Canada, Japan and Australia.
The major exportable items of Lokta paper are in the form of packaging paper, stationery items and greeting cards.
Aside from the export factor, HANDPASS is also trying to promote the use of handmade paper in hotels, restaurants, private offices and organisations at home.
Dabur Real's Contest
The ex citing and fun-filled weekly contest — Real 8 times more contest — launched by Dabur Nepal’s premier brand ‘Real’ has been running successfully for the last 10 weeks. Till date, 81 winners have won exciting prizes including 72 early bird prizes and nine weekly bumper prizes. Each weekly bumper prize winner received an attractive gift hamper containing 8 different items — Nokia mobile phone, MP3 player, Parker pen, Real T-shirt, pen-drive, Sony FM radio, Ocean juice glass set and a gift pack of Real juice. The super bumper prize — after the completion of 12 weeks — is a trip for a couple to eight different destinations in Thailand and Malaysia — all paid for by Real. The second prize is Sony Bravia 32’’ LCD TV and third prize is Sony DVD home theatre system. The winners for these top three prizes will be picked in a live television programme on July 9.
Pepsi Scheme Winners
Dilip Kumar Gupta, Kapilvastu, and Shiva Shrestha, Nepalgunj, were declared the winners of the second lucky draw for Pepsi Dream Team campaign sequel, “Make Your Dream Team” on Sunday. The two winners of this week won allexpenses paid 3 nights-4 days trip to Bangkok and Pattaya. The next lucky draw will be held on June 28.
Laxmi Bank Limited Conducted Workshop
Laxmi Bank Limited (LBL) conducted a management development programme on June 17-18 with emphasis on driving premium pricing through customer satisfaction.
Participants included middle level managers of Laxmi Bank and customers and patrons. The programme was conducted by Professor Narasimhan Rajkumar — faculty of Marketing Department from XLRI in Jamshedhpur, India. Competitive intensification across industries has led to a scenario where product offerings by companies in a given industry are starting to look similar. “One way to bring about necessary differentiation is through superior customer service,” read an LBL release.
Bishal Bazaar Co’s Shareholders Gain
Except for the shareholders of trading sub-group, al other lost this week. After a long time Bishal Bazaar Company saw its 324-unit of shares being traded on Thursday to push the trading sub-group’s index up by 8.57 points to 290.35 points Bishal Bazaar’s shares were traded between Rs 3,213 (maximum) and Rs 3,150 (minimum) — making a total of Rs 1,029,060 transaction — from earlier closing of Rs 3,100 per unit
Of the total nine sub- groups, two sub-groups — manufacturing and others — did not see any changes in their indices as manufacturing sub-group did not see its shares being traded throughout the week whereas others group had a rollercoaster ride before closing at 646.19 points equal to the last week’s clos ing. The shareholders of commercial banks, development banks, finance companies, hydropower, insurance companies and hotels have to wait for a couple of weeks to get better prices for their scrips as investors’ have not gained confidence.
Though the Nespe dropped by only a minimal 0.68 point — to close at 683.71 points from last week’s closing of 684.39 points — the transaction amount dropped by a whopping 75.79 per cent to Rs 230.97 million against last week’s increase of 176 per cent to Rs 953.93 million.
The sensitive index also lost 0.32 point to 183.64 points from 183.96 points.
Similarly, the float index also shed 0.23 point to close at 66.03 points from last week’s closing of 66.25 points. Similarly, the contribution of Group-A companies also plunged to 14.38 per cent.
The top performers of this week are NCC Bank (with Rs 30.70 million), Bank of Kathmandu (with Rs 14.62 million), Standard Chartered Bank Nepal (with Rs 13.48 million), Citizens Bank International (with Rs 12.82 million) and Nepal SBI Bank (with Rs 10.71 million). National Hydropower topped the chart in terms of share units traded as its 1,11,000-unit of shares changed hands, whereas Nepal Express Finance topped the chart in terms of number of transactions with 563 transactions.
Gold, Silver Prices in Fluctuation Mode
The domestic gold market continued to see fluctuations this week too.
Gold, that was traded for Rs 23,580 per 10 gram on Sunday, closed at Rs 23,665 per 10 gram on Friday. According to Nepal Gold and Silver Dealers’ Association (NEGOSIDA), due to variations in dollar, domestic market has also been affected. The cost of gold per ounce in the international market was $939 per fluctuation mode ounce on Sunday, which closed at $934 on Friday. Gold was traded for Rs 23,580 per 10 gram on Monday. However, Thursday saw the highest price of Rs 23,750 per 10 gram in the domestic market. Meanwhile, silver opened at Rs 377 per 10 gram on Sunday and was traded for the same amount on Monday. Silver got traded for Rs 375 on Thursday and closed at Rs 375 per 10 gram on Friday.
Kaski Banks’ Deposit Touches Rs 25.65 Billion
Total deposit in all banks and financial institutions in Kaski has reached Rs 25.65 billion. Of the total deposit, 75 percent is in savings. The customers have been lured towards savings account as they can withdraw their deposit easily without extra charge on this account and also get interest, said Nepal Rastra Bank’s Pokhara branch manager Keshav Thapa.
Similarly, Rs 4.48 billion has been put into the fixed account and Rs 1.72 billion in the current account. Customers have to pay an extra charge to withdraw money before the fixed date from the fixed account whereas the current account does not give any interest.
Of the total deposit, 23 per cent has been deposited in joint investment banks, 19 per cent in private banks, five per cent in NRB, 26 per cent in all commercial banks, two per cent in agricultural banks, 20 per cent in development banks and 0.11 per cent in others.
There are 89 central offices and branches of commercial and development banks and financial institutions in the Syangja district.
Around 42 offices of 22 commercial banks, 32 offices of 23 development banks and 16 offices of 12 finances including others are carrying out transactions in the district.
Some 89 per cent of the total deposit has been invested in different sectors. Of the total investment, 19 per cent has been invested in whole-sellers and retailers, said Thapa.
Saturday, June 20, 2009
Widening Trade Deficit Worries Nepal and China
Consider the figures. Nepal´s trade deficit with China, including Hong Kong, soared by 36 percent last year and, in fact, it has almost doubled in the last two years to touch Rs 22.48 billion last year. While skimming Nepal´s trade statistics with its northern neighbor, it takes no time to find one more alarming trend. Nepal´s exports to China tumbled to less than half of what it was in 2004/05 while Nepal´s imports went up by over 65 percent during the same period.
It is not surprising Chinese imports are growing at a fast pace, as this has been a global phenomenon. China has demonstrated its tremendous capacity as the world´s factory, producing everything from toys and canvas shoes, to high-tech civilian and military aircraft.
But what is disturbing is the fact that Nepal´s export to China is continuously shrinking, and has lately been squeezed down to less than a billion rupees compared with over two billion rupees´ worth of exports recorded in 2004/05.
What went wrong? Instead of expanding its exports to China, why is Nepal losing its market in the world´s third largest economy? The answer is simple. Nepal doesn´t produce exportable products. It is no longer competitive in the rapidly modernizing Chinese consumer market. Currently, Nepal has almost no commodities that have a secure market in China, says Rajesh Kaji Shrestha, chairman of Nepal China Chamber of Commerce and Industry.
In addition, the railway connection between Tibet´s autonomous region and China´s big cities has played an important role in squeezing Nepal´s export to China. The railway enabled Chinese goods to be more cost effective in the booming cities of Tibet than those goods imported from Nepal, thus almost removing the market for once thriving exports of construction materials completely.
Vegetable ghee, once exported to Tibet for lighting, was a dominant item on the export list to China just a couple of years back. But the product suffered a similarly painful demise when Chinese factories supplied cheaper, non-edible ghee.
Not only Nepal officials are worried with the situation. The rapidly widening trade deficit has also sparked concern among Chinese officials. Talking to myrepublica.com in Beijing recently, Liang Wentao, deputy director general of the Ministry of Commerce of China, said that the Chinese government is ´very much concerned´ with its increasing trade surplus with a small and friendly country like Nepal. Wentao added that the Chinese government is ready to extend all necessary support to boost imports from Nepal, and that it is working with Nepali officials to explore various ways to initiate policies to help increase Nepal´s export to China.
Commerce Secretary of Nepal Purushottam Ojha is optimistic the widening trade deficit will start to decline once both countries finalize proposed duty-free access for Nepali products into the Chinese market. China is ready to provide the duty-free facility on 278 tariff lines, a facility it has been providing to LDCs across the board. However, Nepal has pushed for a different list containing 497 items, as the original list of commodities does not include items of Nepal´s export interest. "We have included potential export items like food and vegetable products, forest-based herbs, beer, flour, noodles and construction materials," Ojha said.
In addition, officials from each country stress that enhancing competitiveness of Nepal´s exportable products is the most sustainable way to deal with the ballooning trade deficit. How can this be done? Wentao advises to Nepal to lure foreign investment, which will not only provide much-needed capital but newer technology as well, as China has been doing since it adopted the policy of reforms and liberalization of economy.
Gold Gets Cheaper Despite Rupee Devaluation
Nepali currency weakened against major convertible currencies, including the US dollar over the week, as the greenback bounced back strongly against the Indian rupee, with which domestic rupee is pegged. Drop in the value of currency, however, did not impact the gold lovers, as still sharper drop in the international price of yellow metal caused its price to go down in the local market.
Currency
Nepal currency vis-Ã -vis US dollar devalued by Rs 1.30 over this week, as Indian currency weakened against the greenback during the period. Nepali rupee was valued Rs 77.50 per dollar on Friday.
This yielded better returns for exporters as well as families of overseas workers, who received payment and remittances this week. However, the devaluation of local currency made imports expensive, which eventually could burden consumers of imported goods. Nepal Rastra Bank, the central bank, had fixed the rate of rupee at Rs 76.20 per dollar on Sunday. But rupee continued to face heat of the rebounding dollar throughout the week, weakening to Rs 76.45 per dollar on Tuesday and Rs 77.10 on Thursday.
Likewise, Nepali rupee weakened by 92 paisa against the pound sterling this week. On Friday, a pound was exchanged at Rs 127.12. Rupee also witnessed a drop of 74 paisa against the euro, which was exchanged at Rs 108.21 on Friday. Going by the open market exchange regime, the rate may vary with the commercial banks.
Bullion
Gold priced dropped by Rs 18.5 per gram in the domestic market over the week -- thanks to the decline in the prices of the precious metal in the international market. Gold was traded at Rs 23,665 per 10 grams on Friday.
According to Nepal Gold and Silver Dealers Association, gold was traded at Rs 23,850 per 10 grams on Sunday. Because of fluctuation in currency and international price, gold price dropped to Rs 23,490 on Wednesday. It inched upward to Rs 23,750 per 10 grams on Thursday, but dropped by Rs 85 per 10 grams on Friday. Despite the drop, dealers said the demand for yellow metal continued to remain low.
The price of silver also dropped to Rs 375 from Rs 377 per 10 grams this week. As Nepal fulfills its bullion requirements through imports, any fluctuation in the price of gold directly impacts domestic rates.
Smart Telecom to Begin Services This Year
A new telecom company is soon making its foray in the market, taking up the number of telecom operators in the country to five. If things go as planned, Smart Telecom will launch basic telephone service within 2009, an official of Smart Telecom told myrepublica.com requesting anonymity.
Smart Telecom, which acquired the license to provide telecom services after depositing a fee of US$39,500, is a joint venture between Nepali, Singaporean and Israeli companies. Lal Sahu Distributions Limited of Singapore has 70 percent stake in the company, while Square Network Nepal and Gilat Satellite Networks of Israel have 20 percent and 10 percent shares, respectively.
As per the commitment expressed by the company during the time of acquiring the license, it will have to first introduce services in 398 VDCs in remote areas of western, mid-western, far-western and central regions.
Although the company has not yet finalized the locations from which it plans to begin its services, it has said it will install at least two lines in each of the VDCs that it sets its foot upon. After starting service in 398 VDCs, it will be allowed to expand its network to other parts of the country and introduce international call service as well.
"We hope the introduction of telecom services in the villages selected by Smart will fill in the vacuum created by country´s major telecom companies that usually do not pay attention to rural markets," said Kailash Neupane, spokesperson for Nepal Telecommunications Authority (NTA), the telecom regulatory body of Nepal. Currently, around 420 VDCs in Nepal do not have access to telephone services.
In order to deliver basic telephone services in rural areas, Smart Telecom will rely on VSAT (very small aperture terminal) technology. This technology is considered quite expensive compared to other wireless technologies like CDMA. But it is considered one of the best for countries like Nepal with difficult terrain as it offers very reliable service. The company is yet to fix tariff rates on its services.
Currently, four companies -- Nepal Telecom, Spice Nepal Private Limited, United Telecom Limited and STM Telecom Sanchar -- are providing telecom services in the country.
World Bank Aid for Energy Crisis Management
The World Bank today approved $89.2 million to help Nepal implement its Energy Crisis Management Action Plan. Nepal is experiencing an energy crisis of unprecedented severity, caused by years of under-investment and sharp growth in electricity demand. This long-term problem exacerbated last year due to drought in parts of the country and loss, through flooding, of a transmission line that was used to import electricity from India.
As a result, by January 2009, grid-based consumers were being supplied with electricity for only eight hours per day. This has had a highly negative impact on all aspects of the economy and imposed a heavy burden on Nepalis. While re cent rains have brought some relief against the power supply crisis, the shortage of storage capacity in the system means that the power supply deficit will continue to be severe in the coming winters.
The government has de- clared a ‘national energy crisis’ and its immediate priorities are to identify and implement quick investments to prevent in the coming winters a repeat of crises of similar magnitude while implementing medium-tolong term development plans on a parallel basis. The government also intends to ensure the continued expansion of its successful micro-hydro rural electrification programme.
“Increasing access to electricity is one of the major human and economic development challenges facing Nepal,” said Susan Goldmark, World Bank Country Director for Nepal.
“While it is clear that chronic power shortages will continue to be a defining feature of life in Nepal for several years to come, the bank is stepping up its assistance to help Nepal minimize economic impacts and hardships in the short term and also to implement medium to long term development plans. Some 36,000 rural households will benefit from the expansion of Nepal’s micro-hydro programme.” The additional financing for the Nepal Power Development Project, which was approved on May 22, 2003, will include investments in rehabilitation of the Kali Gandaki ‘A’ Hydro Electric Plant (HEP), the largest plant in Nepal’s power system as well as of two existing thermal plants in Duhabi and Hetauda. It will also finance construction of the Bharatpur-Bardaghat transmission line, strengthen the old and severely overloaded distribution network in Kathmandu Valley and expand the government’s offgrid micro-hydro rural electrification programme.
The investments are aimed at boosting Nepal’s power system by increasing energy production through reduction of down-time at Kali Gandaki ‘A’ HEP, making available an estimated 22 MW of capacity at existing thermal plants. It will improve reliability of the Kathmandu Valley distribution network by adding 500 MW transmission capacity to relay power from existing and expected future projects. An additional 4.25 MW will be installed through the microhydro programme, said Michael Haney, Senior Energy Specialist at WB.
‘Good Governance Will Ensure Good Business’
Corporate governance is an area of great importance for all financial and real sector institutions, opined experts here today during a seminar on ‘Good corporate governance means good business’ organised jointly by Nepal Stock Exchange (Nepse) and International Finance Corporation (IFC), the private sector arm of the World Bank Group.
“For companies, good governance means securing access to broader based, cheaper capital,” said Nepse general manager Shanker Man Singh. “Good governance equals good business. All of us are working towards that goal, whether through legislative measures, training or inculcating new standards of ethics in business,” he said.
At a time when domestic compa- nies are deep into boardroom disputes, corporate good governance is in a shambles. Regulatory authorities like Nepal Rastra Bank (NRB), Securities Board of Nepal (Sebon), Beema Samiti, Company Registrar and front line regulator Nepse face great challenges in safeguarding depositors’ and shareholders’ rights.
Though in April 2005 Corporate Governance Country Assessment — a corporate financial governance project that provided impetus for the development of Nepali capital market — with the help of World Bank, the situation has not yet improved.
For the regulatory authorities su- pervision and monitoring are becoming more challenging due to lack of trained manpower, infrastructure and increasing number of public companies
“The Company Act provides basic corporate framework, but when companies go public and their shares get publicly traded at the sole secondary market, their corporate good governance is a matter of concern for the public as well,” Singh said.
“Capital market is limited to family, multinationals are not going public and public enterprises are suffering from political influence,” said Constituent Assembly member and industrialist Padhma Jyoti. With a fivedecade long experience and expertise in Nepali corporate business, he urged entrepreneurs to escape from political turmoil.
Mike Lubrano, MD of Catrca Capi- tal, Washington presented a paper on, “Stock Exchange and Improvement in Corporate Governance: the Case of Novo Mercado, Brazil’. Sanaa Abzouzid of IFC presented a paper on ‘Preparing a family business for IPO’. She explored the feasibility of transformation of family business into public business in Nepal.
A firm with good governance can attract higher investment premiums, have cheaper access to debt, outperform its peers in the long run and gain better access to multilateral investors. To establish good corporate governance, a firm should have well-defined shareholders rights including protection of minority shareholders, solid control environment including strong risk management and internal control, high levels of transparency and disclosure and an empowered and capable Board of Directors.“Business is not just about making sound investment decisions, taking and managing risks and dealing with economic uncertainties. Today, it is about social responsibility, putting all of our actions under public scrutiny and responding to the concerns of those among whom we conduct our business in open and accountable way,” Singh said.
Securities Board of Nepal chairman Dr Sur Bir Poudel, Nepal Bankers’ Association president Sashin Joshi, Himalayan Distillery chairman Narendra Basnyat and Unilever Nepal managing director Kamran Baqr also shared their experiences of corporate good governance.
NRB deputy governor Krishna Bahadur Manandhar and Washingtonbased IFC corporate governance unit’s Maxin Garvey also shed light on good corporate governance.
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