Fuel crisis to get worse: Stocks enough only for two days
ekantipur, 28-Jul-08
The Nepal Oil Corporation (NOC), which has curtailed petroleum supplies citing that it has not been able to pay for adequate imports, has warned that its fuel stock has alarmingly shrunk and is just enough to support two day's demand.
“Our stock has dropped to 15,000 Kiloliters (KL), and of that that about 9,000 KL is dead stock which cannot be pumped out,” said NOC Chief Digambhar Jha, informing the Post that the corporation has no diesel stock at Thankot depot, and stock of petrol is also depleting fast.
The corporation officials attributed the problem to shortfall in imports in the past and further reduction in supply by the Indian supplier to 1,000 KL a day, which is a third of the country's daily demand.
“Despite seeking support from all quarters, we could not manage enough funds to import more than 50 percent of our requirements this month,” Jha said.
NOC records show the corporation, which released the final monthly installment to the Indian Oil Corporation (IOC) Monday, paid Rs 2.83 billion to the Indian supplier in July. To meet the domestic demand, it was required to pay Rs 5.44 billion.
As a result, the corporation has largely lowered supplies in the market, creating a severe fuel crisis in the country. That has closed down 90 percent retailing stations and affected vehicular movement.
According to the transport entrepreneurs' federation, the number of vehicles plying on the road has gone down to a third due to fuel shortage, while passengers have been are forced to travel packed in the few operating buses and three-wheelers (tempos).
Cautioning the government of the looming disaster, the corporation has requested the Ministry of Finance to facilitate an early release of Rs 700 million, which the government decided to give to it last week.
“The delay in the release of the promised funds has limited our import capacity,” said Jha. He added that the corporation has also sought the government to refund the value added tax (VAT) that it has been paying. Given that the VAT paid at import point is higher than that realized from retails due to import-sales prices differences, NOC has claimed Rs 840 million from the government for the last fiscal year.
“It is our due demand, and we have also asked the government to give it as soon as possible,” said Jha adding that consumers, already reeling under a fuel crisis, may face a still worse situation if the government did not act promptly.
Tuesday, July 29, 2008
Fuel crisis to get worse: Stocks enough only for two days
Fuel crisis to get worse: Stocks enough only for two days
ekantipur, 28-Jul-08
The Nepal Oil Corporation (NOC), which has curtailed petroleum supplies citing that it has not been able to pay for adequate imports, has warned that its fuel stock has alarmingly shrunk and is just enough to support two day's demand.
“Our stock has dropped to 15,000 Kiloliters (KL), and of that that about 9,000 KL is dead stock which cannot be pumped out,” said NOC Chief Digambhar Jha, informing the Post that the corporation has no diesel stock at Thankot depot, and stock of petrol is also depleting fast.
The corporation officials attributed the problem to shortfall in imports in the past and further reduction in supply by the Indian supplier to 1,000 KL a day, which is a third of the country's daily demand.
“Despite seeking support from all quarters, we could not manage enough funds to import more than 50 percent of our requirements this month,” Jha said.
NOC records show the corporation, which released the final monthly installment to the Indian Oil Corporation (IOC) Monday, paid Rs 2.83 billion to the Indian supplier in July. To meet the domestic demand, it was required to pay Rs 5.44 billion.
As a result, the corporation has largely lowered supplies in the market, creating a severe fuel crisis in the country. That has closed down 90 percent retailing stations and affected vehicular movement.
According to the transport entrepreneurs' federation, the number of vehicles plying on the road has gone down to a third due to fuel shortage, while passengers have been are forced to travel packed in the few operating buses and three-wheelers (tempos).
Cautioning the government of the looming disaster, the corporation has requested the Ministry of Finance to facilitate an early release of Rs 700 million, which the government decided to give to it last week.
“The delay in the release of the promised funds has limited our import capacity,” said Jha. He added that the corporation has also sought the government to refund the value added tax (VAT) that it has been paying. Given that the VAT paid at import point is higher than that realized from retails due to import-sales prices differences, NOC has claimed Rs 840 million from the government for the last fiscal year.
“It is our due demand, and we have also asked the government to give it as soon as possible,” said Jha adding that consumers, already reeling under a fuel crisis, may face a still worse situation if the government did not act promptly.
ekantipur, 28-Jul-08
The Nepal Oil Corporation (NOC), which has curtailed petroleum supplies citing that it has not been able to pay for adequate imports, has warned that its fuel stock has alarmingly shrunk and is just enough to support two day's demand.
“Our stock has dropped to 15,000 Kiloliters (KL), and of that that about 9,000 KL is dead stock which cannot be pumped out,” said NOC Chief Digambhar Jha, informing the Post that the corporation has no diesel stock at Thankot depot, and stock of petrol is also depleting fast.
The corporation officials attributed the problem to shortfall in imports in the past and further reduction in supply by the Indian supplier to 1,000 KL a day, which is a third of the country's daily demand.
“Despite seeking support from all quarters, we could not manage enough funds to import more than 50 percent of our requirements this month,” Jha said.
NOC records show the corporation, which released the final monthly installment to the Indian Oil Corporation (IOC) Monday, paid Rs 2.83 billion to the Indian supplier in July. To meet the domestic demand, it was required to pay Rs 5.44 billion.
As a result, the corporation has largely lowered supplies in the market, creating a severe fuel crisis in the country. That has closed down 90 percent retailing stations and affected vehicular movement.
According to the transport entrepreneurs' federation, the number of vehicles plying on the road has gone down to a third due to fuel shortage, while passengers have been are forced to travel packed in the few operating buses and three-wheelers (tempos).
Cautioning the government of the looming disaster, the corporation has requested the Ministry of Finance to facilitate an early release of Rs 700 million, which the government decided to give to it last week.
“The delay in the release of the promised funds has limited our import capacity,” said Jha. He added that the corporation has also sought the government to refund the value added tax (VAT) that it has been paying. Given that the VAT paid at import point is higher than that realized from retails due to import-sales prices differences, NOC has claimed Rs 840 million from the government for the last fiscal year.
“It is our due demand, and we have also asked the government to give it as soon as possible,” said Jha adding that consumers, already reeling under a fuel crisis, may face a still worse situation if the government did not act promptly.
Oil exploration permit violates law
Oil exploration permit violates law
eKantipur, 28-Jul-08
The government has not followed the constitutional process while signing agreement with international companies for exploration and production of petroleum in the tarai, experts said here on Monday.
Speaking during a national workshop on "Petroleum Exploration and Legal Compliance", jointly organized by Nepal Bar Association (NBA) and World Wildlife Fund (WWF) the experts said the agreement made by the government are not in compliance with the existing laws.
The government has recently signed agreement for petroleum exploration and production with two international companies -- Texona Resources Company and Cairn Energy -- but has kept the agreements confidential.
"The agreements should not be kept confidential according to the 1990 Constitution as well as the present Interim Constitution 2007," said Bishwa Kanta Mainali, senior advocate and president of NBA.
Similarly, the petroleum agreements should meet the requirements of environment protection with a compulsory legal provision for Environment Impact Assessment (EIA) before the companies are granted the exploration rights, he said.
"However, there has been no evidence of EIA being followed by the government," Mainali said.
According to him, though regulation 10 (1) of Petroleum Regulations, 1985, has stated that a bidder shall not be granted more than two exploration blocks for the petroleum exploration, government has licensed five of the 10 blocks to Cairn Energy.
Meantime, speaking during the workshop, Anil Manandhar, country representative of WWF said, "The provision on environmental protection under the petroleum agreement seems inadequate."
eKantipur, 28-Jul-08
The government has not followed the constitutional process while signing agreement with international companies for exploration and production of petroleum in the tarai, experts said here on Monday.
Speaking during a national workshop on "Petroleum Exploration and Legal Compliance", jointly organized by Nepal Bar Association (NBA) and World Wildlife Fund (WWF) the experts said the agreement made by the government are not in compliance with the existing laws.
The government has recently signed agreement for petroleum exploration and production with two international companies -- Texona Resources Company and Cairn Energy -- but has kept the agreements confidential.
"The agreements should not be kept confidential according to the 1990 Constitution as well as the present Interim Constitution 2007," said Bishwa Kanta Mainali, senior advocate and president of NBA.
Similarly, the petroleum agreements should meet the requirements of environment protection with a compulsory legal provision for Environment Impact Assessment (EIA) before the companies are granted the exploration rights, he said.
"However, there has been no evidence of EIA being followed by the government," Mainali said.
According to him, though regulation 10 (1) of Petroleum Regulations, 1985, has stated that a bidder shall not be granted more than two exploration blocks for the petroleum exploration, government has licensed five of the 10 blocks to Cairn Energy.
Meantime, speaking during the workshop, Anil Manandhar, country representative of WWF said, "The provision on environmental protection under the petroleum agreement seems inadequate."
Monday, July 28, 2008
West Seti hydro-power development
West Seti hydro-power development
ekantipur, 25-Jul-08
By Dr Trilochan Upreti
After the withdrawal of the World Bank from the Arun III hydropower project and its subsequent demise, power sector development has got a major blow in Nepal, which was considered a betrayal by that institution upon a tiny, vulnerable and least developed country. Some people inside Nepal have blamed a political party for such a disastrous and detrimental consequence owing to the mishandling of the issues in an immature manner. This was also considered as a fall of public sector investment in the hydropower sector opening the gate for the private sector or public-private partnership.
Pursuant to the policy of involving the private sector, the government has invited the private sector into the power market. Snowy Mountains Engineering Corporation (SMEC) showing its interest in the West Seti concluded an MOU with the government on Asad 24, 2051, in which SMEC has promised to provide at least 10 percent of the total hydro-electricity to be produced and exported to India from the project. SMEC, however, has not bothered to commission the project to date except for the renewal of the survey license numerous times by amending the conditions of the project eight times.
The initial agreement of providing at least 10 percent of the produced electricity, that is to say, 75 of the 750 MW capacity of the project, was amended at a later stage pretending that there is no connection of the national grid and also technical advice of an expert from the Asian Development Bank arguing that monetary reimbursement in lieu of power could be higher than the 75 MW of hydropower. The then cabinet, pursuant to the proposal submitted by the Ministry of Water resources, decided on Kartik 14, 2055 to provide the project to SMEC for a period of 30 years, prescribing the royalty of 0.05 percent to be paid to Nepal instead of providing 75 MW of hydro-electricity.
In fact, it was a manipulation detrimental to the nation and beneficial to the decision maker and the producer. A high level meeting of the then water resources ministry headed by Minister Deepak Gyawali had decided to get 10 percent of hydro-electricity from SMEC, instead of the 0.05 percent royalty, asking the company to develop a separate 122 MW capacity Upper Seti project that was decided on Aswin12, 2059.
SMEC has managed the fund for the project by negotiating with Chinese and Indian investment banks and world financial markets, negotiating for power purchase arrangement with India's Power Trading Corporation, amending the license for its wider benefit and also extending the time of the license until it can finalize the above mentioned activities.
However, from the perspective of our national interest, it is too long to wait, providing more beneficial conditions to the producer to the detriment of Nepal and to agree to more and more demands for benefits by the company after these long years. The concerned ministers have been providing every concession and comfort to the company in an inconsistent manner thereby causing harm to Nepal and penalizing ourselves for the omission of the developer. However, the cloud of distrust between the political leaders and the people are increasingly surfacing, which is not a good indication. The total cost of the project is one billion and two hundred million US dollars.
From the view of the developer, it would be usual to take that much time for finalizing the environmental, financial, technical and other studies and arrangements for a project of this size. From Nepal's perspective, the waiting for so long for a company to develop this project, making eight amendments in favor of the company but unfavorable to Nepal is not a good initiation at all. What is more, Clause 2.4 of the amended agreement says that SMEC will pay royalty to Nepal only if it has sufficient funds after paying off its debt to the participants and bearing the operating costs. This news brought out by The Kathmandu Post was confirmed by the present State Minister for Water resources. This was again contradicted by himself by saying that Nepal will get 75 MW of hydro-electric power from SMEC when he was signing an agreement for its 15 percent equity participation in the project through ADB loan. The Finance Minister was quoted as saying that the above matter is true and that they will renegotiate with SMEC compelling it to provide hydro-electricity instead of cash royalty.
To date, no government authority has even raised the question of the augmented water of 90 cubic meter by the project and its price. In fact, the price of water is more valuable than the price of electricity and this will be a net benefit to India. Nepal should negotiate with India and strive to convince India for the payment of that water, which will be the life-blood to the farmers of India to increase their agriculture productivity particularly during dry season. One may argue insisting that we cannot waste further time by involving in such useless points because India will not agree to it. Such an argument is detrimental to the country, as it was in the past. Such norms have been adopted in the entire world, including India itself in its inter-state water disputes. Therefore, we must convince India and get the legitimate entitlement. This is the core issue in this sector.
The price of 90 cubic meter of augmented water from the West Seti hydropower project should be paid by India, which will be a net profit to Nepal from the Seti project. The government must not be seen as taking a double standard in the matter of government involvement in a water resources project. For example, the finance minister has ruled out government investment in the Upper Tama Koshi Project whereas the government has directly invested 15 percent equity share in the West Seti project. There are two versions of the argument on how to develop hydro-electricity and water resources in Nepal. One view has emphasized to separate electricity from water by departing from the past nationalist ideology, while the other view holds the argument that both should be considered in one issue and dealt with accordingly. Otherwise, we will see another demise and disastrous effect on the West Seti and SMEC plan, because it is very hard to make a project but very easy to break it within a short span of time.
ekantipur, 25-Jul-08
By Dr Trilochan Upreti
After the withdrawal of the World Bank from the Arun III hydropower project and its subsequent demise, power sector development has got a major blow in Nepal, which was considered a betrayal by that institution upon a tiny, vulnerable and least developed country. Some people inside Nepal have blamed a political party for such a disastrous and detrimental consequence owing to the mishandling of the issues in an immature manner. This was also considered as a fall of public sector investment in the hydropower sector opening the gate for the private sector or public-private partnership.
Pursuant to the policy of involving the private sector, the government has invited the private sector into the power market. Snowy Mountains Engineering Corporation (SMEC) showing its interest in the West Seti concluded an MOU with the government on Asad 24, 2051, in which SMEC has promised to provide at least 10 percent of the total hydro-electricity to be produced and exported to India from the project. SMEC, however, has not bothered to commission the project to date except for the renewal of the survey license numerous times by amending the conditions of the project eight times.
The initial agreement of providing at least 10 percent of the produced electricity, that is to say, 75 of the 750 MW capacity of the project, was amended at a later stage pretending that there is no connection of the national grid and also technical advice of an expert from the Asian Development Bank arguing that monetary reimbursement in lieu of power could be higher than the 75 MW of hydropower. The then cabinet, pursuant to the proposal submitted by the Ministry of Water resources, decided on Kartik 14, 2055 to provide the project to SMEC for a period of 30 years, prescribing the royalty of 0.05 percent to be paid to Nepal instead of providing 75 MW of hydro-electricity.
In fact, it was a manipulation detrimental to the nation and beneficial to the decision maker and the producer. A high level meeting of the then water resources ministry headed by Minister Deepak Gyawali had decided to get 10 percent of hydro-electricity from SMEC, instead of the 0.05 percent royalty, asking the company to develop a separate 122 MW capacity Upper Seti project that was decided on Aswin12, 2059.
SMEC has managed the fund for the project by negotiating with Chinese and Indian investment banks and world financial markets, negotiating for power purchase arrangement with India's Power Trading Corporation, amending the license for its wider benefit and also extending the time of the license until it can finalize the above mentioned activities.
However, from the perspective of our national interest, it is too long to wait, providing more beneficial conditions to the producer to the detriment of Nepal and to agree to more and more demands for benefits by the company after these long years. The concerned ministers have been providing every concession and comfort to the company in an inconsistent manner thereby causing harm to Nepal and penalizing ourselves for the omission of the developer. However, the cloud of distrust between the political leaders and the people are increasingly surfacing, which is not a good indication. The total cost of the project is one billion and two hundred million US dollars.
From the view of the developer, it would be usual to take that much time for finalizing the environmental, financial, technical and other studies and arrangements for a project of this size. From Nepal's perspective, the waiting for so long for a company to develop this project, making eight amendments in favor of the company but unfavorable to Nepal is not a good initiation at all. What is more, Clause 2.4 of the amended agreement says that SMEC will pay royalty to Nepal only if it has sufficient funds after paying off its debt to the participants and bearing the operating costs. This news brought out by The Kathmandu Post was confirmed by the present State Minister for Water resources. This was again contradicted by himself by saying that Nepal will get 75 MW of hydro-electric power from SMEC when he was signing an agreement for its 15 percent equity participation in the project through ADB loan. The Finance Minister was quoted as saying that the above matter is true and that they will renegotiate with SMEC compelling it to provide hydro-electricity instead of cash royalty.
To date, no government authority has even raised the question of the augmented water of 90 cubic meter by the project and its price. In fact, the price of water is more valuable than the price of electricity and this will be a net benefit to India. Nepal should negotiate with India and strive to convince India for the payment of that water, which will be the life-blood to the farmers of India to increase their agriculture productivity particularly during dry season. One may argue insisting that we cannot waste further time by involving in such useless points because India will not agree to it. Such an argument is detrimental to the country, as it was in the past. Such norms have been adopted in the entire world, including India itself in its inter-state water disputes. Therefore, we must convince India and get the legitimate entitlement. This is the core issue in this sector.
The price of 90 cubic meter of augmented water from the West Seti hydropower project should be paid by India, which will be a net profit to Nepal from the Seti project. The government must not be seen as taking a double standard in the matter of government involvement in a water resources project. For example, the finance minister has ruled out government investment in the Upper Tama Koshi Project whereas the government has directly invested 15 percent equity share in the West Seti project. There are two versions of the argument on how to develop hydro-electricity and water resources in Nepal. One view has emphasized to separate electricity from water by departing from the past nationalist ideology, while the other view holds the argument that both should be considered in one issue and dealt with accordingly. Otherwise, we will see another demise and disastrous effect on the West Seti and SMEC plan, because it is very hard to make a project but very easy to break it within a short span of time.
MoAC unveils commercial agriculture policy
MoAC unveils commercial agriculture policy
eKantipur, 25-Jul-08
The Ministry of Agriculture and Co-operatives (MoAC) on Wednesday unveiled a policy focusing on commercialization of agriculture sector for the fiscal year 2007/08.
Under the policy, MoAC has planned for a long-term lease of government-owned barren land to landless people for the purpose of commercial and co-operative farming.
The MoAC is also launching parwar (pointed gourd) farming in eleven districts, potato farming in 20 districts along with the programs targeted to uplift under-privileged groups in the terai.
“We have put commercialization of agriculture in top priority while formulating current fiscal year's policy,” said Dr Hari Dahal, spokesperson at MoAC, talking to the Post on Wednesday. "We are also continuing One Village One Product (OVOP) program this year for the commercialization of fruits and fish varieties like trout. The ministry has allocated Rs 30 million this year for OVOP program.
The government is also encouraging commercial farming of herbs, cooperative animal husbandry in 22 districts inhabited by backward people including the emancipated Kamaiyas, along with off-season vegetable farming inside green house to generate income among underprivileged classes, states the policy paper of MoAC.
The policy also has incorporated programs of lending goats in additional 38 districts to provide opportunity to poor farmers in goat rearing, and operating fisheries through women's groups along the highway in Kailali and Kanchanpur districts.
The ministry has also framed a policy to expand tea cultivation in other districts of the eastern region under the program of intensifying high-valued crops and off-season agricultural produce while programs will be initiated to extend coffee cultivation in additional districts of western hilly region.
Under the policy, the ministry has allocated Rs 37.9 million to provide subsidy in chemical fertilizers and seeds in 26 districts whereas the limit of subsidized loan has been hiked to Rs 15,000 from existing Rs 10,000.
To promote export of organic agricultural produces, government has laid a provision to issue internationally recognized certified demand paper.
Much to the relief of sugarcane producing farmers, government is forming Sugarcane and Sugar Board with the representation of farmers and sugar mill representatives and to conduct research to increase productivity.
In a bid to replace mounting imports, the MoAC is initiating the policy of expanding onion farming in additional 2,400 hectares of land in Saptari, Siraha, Sarlahi, Bara, Dhanusha and Rupandehi districts.
eKantipur, 25-Jul-08
The Ministry of Agriculture and Co-operatives (MoAC) on Wednesday unveiled a policy focusing on commercialization of agriculture sector for the fiscal year 2007/08.
Under the policy, MoAC has planned for a long-term lease of government-owned barren land to landless people for the purpose of commercial and co-operative farming.
The MoAC is also launching parwar (pointed gourd) farming in eleven districts, potato farming in 20 districts along with the programs targeted to uplift under-privileged groups in the terai.
“We have put commercialization of agriculture in top priority while formulating current fiscal year's policy,” said Dr Hari Dahal, spokesperson at MoAC, talking to the Post on Wednesday. "We are also continuing One Village One Product (OVOP) program this year for the commercialization of fruits and fish varieties like trout. The ministry has allocated Rs 30 million this year for OVOP program.
The government is also encouraging commercial farming of herbs, cooperative animal husbandry in 22 districts inhabited by backward people including the emancipated Kamaiyas, along with off-season vegetable farming inside green house to generate income among underprivileged classes, states the policy paper of MoAC.
The policy also has incorporated programs of lending goats in additional 38 districts to provide opportunity to poor farmers in goat rearing, and operating fisheries through women's groups along the highway in Kailali and Kanchanpur districts.
The ministry has also framed a policy to expand tea cultivation in other districts of the eastern region under the program of intensifying high-valued crops and off-season agricultural produce while programs will be initiated to extend coffee cultivation in additional districts of western hilly region.
Under the policy, the ministry has allocated Rs 37.9 million to provide subsidy in chemical fertilizers and seeds in 26 districts whereas the limit of subsidized loan has been hiked to Rs 15,000 from existing Rs 10,000.
To promote export of organic agricultural produces, government has laid a provision to issue internationally recognized certified demand paper.
Much to the relief of sugarcane producing farmers, government is forming Sugarcane and Sugar Board with the representation of farmers and sugar mill representatives and to conduct research to increase productivity.
In a bid to replace mounting imports, the MoAC is initiating the policy of expanding onion farming in additional 2,400 hectares of land in Saptari, Siraha, Sarlahi, Bara, Dhanusha and Rupandehi districts.
Sunday, July 27, 2008
Nepal's energy emergency
Nepal's energy emergency
Required immediately: more power to meet domestic shortfall and to reduce the trade gap by exporting to India
NepaliTimes, Issue $410 (25-Jul-08 - 31-Jul-08)
By Dewan Rai
Whichever government comes to power, the first thing it will have to start working on will be energy.
In any other country, this would be considered an emergency: Nepal is going through its first-ever monsoon power cuts. This winter load-shedding will go up to 56 hours a week. The generation shortfall will be 35 per cent below demand this December.
Not just this year, Nepal will suffer an average of to 6-8 hours of power cuts a day till 2013 because no new major power generation schemes are coming on line till then except the 70MW Middle Marsyangdi.
The other emergency is Nepal's widening balance of payments gap with India, which reached Rs 96 billion this year because of the higher cost of petroleum imports and falling export. The trade imbalance is expected to grow, and the only way to narrow the gap in the medium term is by launching hydroelectricity export projects immediately.
There will be other benefits from aggressive investments in hydro infrastructure: it will generate tens of thousands of jobs. In their economic masterplan, the Maoists say they want to generate 10,000 megawatts in the next 10 years to meet domestic demand and to export to India. This would require investments at a time when most international companies are wary of doing business in Nepal because of political risk.
Nepal's electricity demand is rising at 10 per cent a year, but could increase if the peace dividend finally spurs economic growth. Domestic investors and community generation schemes could easily add up to 50MW a year. Industry analysts see a role for large foreign joint ventures in projects to export power to India.
They point to the Electricity Act of 1992 that allowed 300MW of power to be generated in six years in the mid-1990s, doubling generation capacity, and say Nepal's new government needs to make a similar breakthrough.
"Ten year ago, no one even wanted to hear about investment in hydropower but now we have investors lining up to put money into this sector," says Gyanendra Lal Pradhan of Butwal Power Company, one of Nepal's new breed of entrepreneurs with stakes in seven hydro projects worth 350MW in pipeline.
"It's simple demand and supply," Pradhan adds, "demand is growing so we need to add supply. But we have to be fast, if we start today we may be able to bring load shedding down to zero in seven years, otherwise this shortage will last till 2016."
The time is right for new investments in hydropower to meet domestic shortfalls and to export to India. The Maoists have expressed a strong commitment to develop the sector, but investors are still wary.
Earlier this year, the government issued licenses to two Indian companies for big budget projects: Arun III (402MW) and Upper Karnali (300MW), both dedicated export projects.
On Monday, the World Bank's soft loan division, the International Finance Corporation announced in Kathmandu that would be financing 25 per cent of the cost of both projects.
The government is re-inviting bids for a storage project on the Budi Gandaki, and a slew of new projects are coming on line that will generate 150MW in the next two years.
The earliest any of the export projects will start selling power to India will be 2015, and that is if work starts right away. The 750MW Australia-Nepal export joint venture West Seti project has been delayed by 10 years and will take another 10 years to be completed.
SN Power is exploring the Upper Tama Kosi II and III (500MW), while NEA, with public shares, is starting Upper Tama Kosi I next year to be completed by 2013.
Some, like Ajaya Dixit of Nepal Water Conservation Foundation, say that Nepal should concentrate on fulfilling domestic demand and promoting value-added industries first before expending time and money on export projects which have long gestation.
"Rather than just sell electricity, it would be better to generate downstream benefits from using electricity," he says, "electricity can be the primary mover of socio-economic progress in Nepal."
Others say meeting domestic demand should go hand-in-hand with exports to India to balance the trade gap. Says Balaram Pradhan of the Nepal Hydropower Association: "We have to produce enough energy for domestic economic growth, but we also need to export electricity to bridge the trade gap."
Required immediately: more power to meet domestic shortfall and to reduce the trade gap by exporting to India
NepaliTimes, Issue $410 (25-Jul-08 - 31-Jul-08)
By Dewan Rai
Whichever government comes to power, the first thing it will have to start working on will be energy.
In any other country, this would be considered an emergency: Nepal is going through its first-ever monsoon power cuts. This winter load-shedding will go up to 56 hours a week. The generation shortfall will be 35 per cent below demand this December.
Not just this year, Nepal will suffer an average of to 6-8 hours of power cuts a day till 2013 because no new major power generation schemes are coming on line till then except the 70MW Middle Marsyangdi.The other emergency is Nepal's widening balance of payments gap with India, which reached Rs 96 billion this year because of the higher cost of petroleum imports and falling export. The trade imbalance is expected to grow, and the only way to narrow the gap in the medium term is by launching hydroelectricity export projects immediately.
There will be other benefits from aggressive investments in hydro infrastructure: it will generate tens of thousands of jobs. In their economic masterplan, the Maoists say they want to generate 10,000 megawatts in the next 10 years to meet domestic demand and to export to India. This would require investments at a time when most international companies are wary of doing business in Nepal because of political risk.
Nepal's electricity demand is rising at 10 per cent a year, but could increase if the peace dividend finally spurs economic growth. Domestic investors and community generation schemes could easily add up to 50MW a year. Industry analysts see a role for large foreign joint ventures in projects to export power to India.
They point to the Electricity Act of 1992 that allowed 300MW of power to be generated in six years in the mid-1990s, doubling generation capacity, and say Nepal's new government needs to make a similar breakthrough.
"Ten year ago, no one even wanted to hear about investment in hydropower but now we have investors lining up to put money into this sector," says Gyanendra Lal Pradhan of Butwal Power Company, one of Nepal's new breed of entrepreneurs with stakes in seven hydro projects worth 350MW in pipeline.
"It's simple demand and supply," Pradhan adds, "demand is growing so we need to add supply. But we have to be fast, if we start today we may be able to bring load shedding down to zero in seven years, otherwise this shortage will last till 2016."
The time is right for new investments in hydropower to meet domestic shortfalls and to export to India. The Maoists have expressed a strong commitment to develop the sector, but investors are still wary.
Earlier this year, the government issued licenses to two Indian companies for big budget projects: Arun III (402MW) and Upper Karnali (300MW), both dedicated export projects.
On Monday, the World Bank's soft loan division, the International Finance Corporation announced in Kathmandu that would be financing 25 per cent of the cost of both projects.
The government is re-inviting bids for a storage project on the Budi Gandaki, and a slew of new projects are coming on line that will generate 150MW in the next two years.
The earliest any of the export projects will start selling power to India will be 2015, and that is if work starts right away. The 750MW Australia-Nepal export joint venture West Seti project has been delayed by 10 years and will take another 10 years to be completed.
SN Power is exploring the Upper Tama Kosi II and III (500MW), while NEA, with public shares, is starting Upper Tama Kosi I next year to be completed by 2013.
Some, like Ajaya Dixit of Nepal Water Conservation Foundation, say that Nepal should concentrate on fulfilling domestic demand and promoting value-added industries first before expending time and money on export projects which have long gestation.
"Rather than just sell electricity, it would be better to generate downstream benefits from using electricity," he says, "electricity can be the primary mover of socio-economic progress in Nepal."
Others say meeting domestic demand should go hand-in-hand with exports to India to balance the trade gap. Says Balaram Pradhan of the Nepal Hydropower Association: "We have to produce enough energy for domestic economic growth, but we also need to export electricity to bridge the trade gap."
The power of water
The power of water
India lets private investors take the lead on sensitive Nepal projects
NepaliTimes, Issue $410 (25-Jul-08 - 31-Jul-08)
By Prabhu Ghate
The history of Indo-Nepal water resource cooperation is a litany of dashed hopes, shelved projects, unimplemented treaties, and mutual recrimination. The small-neighbour-big-brother syndrome that pervades relations in every sphere invariably arouses suspicion of unequal benefits when governments are involved.
India is now trying to get governments out of it. Hydropower seems to enjoy the support of all the major parties in Nepal, including the Maoists, whose manifesto talks of adding 10,000MW of capacity in mission mode over the next 10 years through domestic and external financing.
Two MoUs were signed before the elections with private Indian developers to build and operate hydropower plants for electricity export to India. GMR bagged the 400MW Arun III and Satluj Jal Vidyut Nigam got the 300MW Upper Karnali. The World Bank's IFC announced on Tuesday that it would finance 25 per cent of the cost of both projects.
A third project, the 600MW Budi Gandaki, did not get proper bids and is being re-tendered. Bids were evaluated according to pre-announced criteria, including the share of free power the developer would make available to the domestic market, and the share of equity it would offer the NEA.
Based on the winning bids, and subsequent negotiations in consultation with a parliamentary committee, GMR will share 12 per cent of the electricity produced as free power and offer 27 per cent as equity to the NEA, while Satluj will share 22 per cent as free power.
The highly seasonal waters of Nepali rivers are largely wasted during the monsoons as they run down to the sea through the Ganges, causing floods on the way. Dry season flows are insufficient to irrigate even Nepal's Tarai.
Meanwhile, Nepal is looking at 56-hour powercuts this winter. The irony is that power-rich Nepal imports power from India while a huge energy-starved market sits just across the border.
GMR and Satluj now have to form JVs with the NEA, apply for survey licences, tie up the financing, enter into power purchase agreements with India's Power Trading Corporation or other buyers, and prepare detailed project reports. All this is expected to take two years, after which construction could take another five years.
Some civil society groups remain opposed, and one of them has challenged the MoUs in the courts on the grounds that under the interim constitution agreements entailing the export of natural resources require the approval of a two-thirds majority of the parliament. However the court refused to grant a stay, and may decide that while water is a natural resource, electricity produced from it is not.
A possible complication can be the federal arrangements the new constitution will propose for sharing benefits of hydropower projects. What will happen to projects already in the pipeline for the expected two years during which the constituent assembly does its work?
Dams and storage reservoirs decrease excessive monsoon flows, alleviating floods, while increasing flows in the dry season, rendering the water much more valuable for irrigation. Some activists argue that these regulated flows are a valuable byproduct of hydropower projects which India should be willing to pay for, just as it is willing to pay for electricity. This will be a factor in the huge high dam projects that have been under investigation for decades now.
It has arisen even in the case of the 750MW West Seti being promoted by the Australian Snowy Mountain group with Indian, ADB and Chinese investment. The promoters argue that they have no way of charging for downstream irrigation and flood control benefits in India. Irrigation water is a notoriously under-priced resource in India as it is in Nepal.
This is an area where the governments will have to come in, although investors are hoping it will not further hold up projects like West Seti, which has been 13 years in the making.
India lets private investors take the lead on sensitive Nepal projects
NepaliTimes, Issue $410 (25-Jul-08 - 31-Jul-08)
By Prabhu Ghate
The history of Indo-Nepal water resource cooperation is a litany of dashed hopes, shelved projects, unimplemented treaties, and mutual recrimination. The small-neighbour-big-brother syndrome that pervades relations in every sphere invariably arouses suspicion of unequal benefits when governments are involved.
India is now trying to get governments out of it. Hydropower seems to enjoy the support of all the major parties in Nepal, including the Maoists, whose manifesto talks of adding 10,000MW of capacity in mission mode over the next 10 years through domestic and external financing.
Two MoUs were signed before the elections with private Indian developers to build and operate hydropower plants for electricity export to India. GMR bagged the 400MW Arun III and Satluj Jal Vidyut Nigam got the 300MW Upper Karnali. The World Bank's IFC announced on Tuesday that it would finance 25 per cent of the cost of both projects.
A third project, the 600MW Budi Gandaki, did not get proper bids and is being re-tendered. Bids were evaluated according to pre-announced criteria, including the share of free power the developer would make available to the domestic market, and the share of equity it would offer the NEA.
Based on the winning bids, and subsequent negotiations in consultation with a parliamentary committee, GMR will share 12 per cent of the electricity produced as free power and offer 27 per cent as equity to the NEA, while Satluj will share 22 per cent as free power.
The highly seasonal waters of Nepali rivers are largely wasted during the monsoons as they run down to the sea through the Ganges, causing floods on the way. Dry season flows are insufficient to irrigate even Nepal's Tarai.
Meanwhile, Nepal is looking at 56-hour powercuts this winter. The irony is that power-rich Nepal imports power from India while a huge energy-starved market sits just across the border.
GMR and Satluj now have to form JVs with the NEA, apply for survey licences, tie up the financing, enter into power purchase agreements with India's Power Trading Corporation or other buyers, and prepare detailed project reports. All this is expected to take two years, after which construction could take another five years.
Some civil society groups remain opposed, and one of them has challenged the MoUs in the courts on the grounds that under the interim constitution agreements entailing the export of natural resources require the approval of a two-thirds majority of the parliament. However the court refused to grant a stay, and may decide that while water is a natural resource, electricity produced from it is not.
A possible complication can be the federal arrangements the new constitution will propose for sharing benefits of hydropower projects. What will happen to projects already in the pipeline for the expected two years during which the constituent assembly does its work?
Dams and storage reservoirs decrease excessive monsoon flows, alleviating floods, while increasing flows in the dry season, rendering the water much more valuable for irrigation. Some activists argue that these regulated flows are a valuable byproduct of hydropower projects which India should be willing to pay for, just as it is willing to pay for electricity. This will be a factor in the huge high dam projects that have been under investigation for decades now.
It has arisen even in the case of the 750MW West Seti being promoted by the Australian Snowy Mountain group with Indian, ADB and Chinese investment. The promoters argue that they have no way of charging for downstream irrigation and flood control benefits in India. Irrigation water is a notoriously under-priced resource in India as it is in Nepal.
This is an area where the governments will have to come in, although investors are hoping it will not further hold up projects like West Seti, which has been 13 years in the making.
Monday, July 21, 2008
IFC and Partners Hold Workshop on Hydropower Project Financing in Nepal
IFC and Partners Hold Workshop on Hydropower Project Financing in Nepal
IFC, 21-Jul-08
Minakshi Seth
Phone : +91 11 4111 1000
E-mail: mseth@ifc.org
IFC, a member of the World Bank Group, the Independent Power Producers’ Association of Nepal, the Nepal Banker’s Association, and the Nepal Hydropower Association today held a workshop on hydropower project financing to help promote investments in the sector.
The event was attended by senior government officials, infrastructure and power specialists, and private sector business associations from South Asia. Discussion topics included project financing; risk assessment, securitization, and mitigation; environmental concerns, including climate change; and international best practices and their adaptation to Nepal’s context.
Dr. Sandip Shah, President of IPPAN, said, “Nepal has set ambitious targets of an additional 5,000 to 10,000 megawatts generation in the next 10 years. While the country’s energy needs have encouraged domestic investors and banks to engage in developing small and midsize hydropower projects, international lenders and partners also have an important role to play.”
Anita George, IFC Infrastructure Director, said, “Quality infrastructure is essential for economic growth and prosperity. Investments in power projects are needed urgently in Nepal. IFC is pleased to participate in and support this debate, which will help address important risk management and project finance aspects for developing this vital sector.”
IFC recently supported a feasibility study for the development of the Infrastructure Development Bank of Nepal along with other investors to develop and provide a comprehensive range of financial products and services for the development of infrastructure projects and facilities in Nepal.
At the workshop, Vice Chairman of National Planning Commission Dr. Jagdish Chandra Pokharel reinforced the importance of international capital and partners for harnessing Nepal’s hydropower resources. Secretary Shankar Koirala of the Ministry of Water Resources reiterated the government’s commitment to streamline project development by introducing an appropriate legislation and regulatory framework. Secretary Rameshore Khanal highlighted the key role of international partners in risk assessment and securitization as well as project appraisal for large infrastructure projects. He noted that international developers and lending agencies are welcome to introduce various financial instruments for developing projects.
Over the past few years, Nepal’s government and the private sector have undertaken a number of initiatives to promote investments in the hydropower sector. This includes power summit conferences in 2006 and 2007 that focused on jump-starting private sector initiatives for hydropower development in Nepal. Major outcomes include the awarding of development licenses by the government for two projects through a competitive bidding process, initial steps toward creating an infrastructure development bank, and the building of cross-border transmission lines.
About IFC
IFC, a member of the World Bank Group, fosters sustainable economic growth in developing countries by financing private sector investment, mobilizing private capital in local and international financial markets, and providing advisory and risk mitigation services to businesses and governments. IFC’s vision is that people should have the opportunity to escape poverty and improve their lives. In FY07, IFC committed $8.2 billion and mobilized an additional $3.9 billion through syndications and structured finance for 299 investments in 69 developing countries. IFC also provided advisory services in 97 countries. For more information, visit www.ifc.org.
About the Independent Power Producers’ Association of Nepal
IPPAN is a nonprofit, nongovernmental organization with the objectives to address constraints facing hydropower project development in Nepal and assist the government and domestic and international private sector developers in this field. Its activities include identifying incompatibility in existing legal and regulatory frameworks, following international trends in project financing, understanding power markets and their diversification within the country and wider region, reviewing conventional processes and criteria for project approval and implementation standards for efficiency, incorporating social and environmental concerns, and facilitating technical training and interaction among power producers in Nepal and worldwide.
IFC, 21-Jul-08
Minakshi Seth
Phone : +91 11 4111 1000
E-mail: mseth@ifc.org
IFC, a member of the World Bank Group, the Independent Power Producers’ Association of Nepal, the Nepal Banker’s Association, and the Nepal Hydropower Association today held a workshop on hydropower project financing to help promote investments in the sector.
The event was attended by senior government officials, infrastructure and power specialists, and private sector business associations from South Asia. Discussion topics included project financing; risk assessment, securitization, and mitigation; environmental concerns, including climate change; and international best practices and their adaptation to Nepal’s context.
Dr. Sandip Shah, President of IPPAN, said, “Nepal has set ambitious targets of an additional 5,000 to 10,000 megawatts generation in the next 10 years. While the country’s energy needs have encouraged domestic investors and banks to engage in developing small and midsize hydropower projects, international lenders and partners also have an important role to play.”
Anita George, IFC Infrastructure Director, said, “Quality infrastructure is essential for economic growth and prosperity. Investments in power projects are needed urgently in Nepal. IFC is pleased to participate in and support this debate, which will help address important risk management and project finance aspects for developing this vital sector.”
IFC recently supported a feasibility study for the development of the Infrastructure Development Bank of Nepal along with other investors to develop and provide a comprehensive range of financial products and services for the development of infrastructure projects and facilities in Nepal.
At the workshop, Vice Chairman of National Planning Commission Dr. Jagdish Chandra Pokharel reinforced the importance of international capital and partners for harnessing Nepal’s hydropower resources. Secretary Shankar Koirala of the Ministry of Water Resources reiterated the government’s commitment to streamline project development by introducing an appropriate legislation and regulatory framework. Secretary Rameshore Khanal highlighted the key role of international partners in risk assessment and securitization as well as project appraisal for large infrastructure projects. He noted that international developers and lending agencies are welcome to introduce various financial instruments for developing projects.
Over the past few years, Nepal’s government and the private sector have undertaken a number of initiatives to promote investments in the hydropower sector. This includes power summit conferences in 2006 and 2007 that focused on jump-starting private sector initiatives for hydropower development in Nepal. Major outcomes include the awarding of development licenses by the government for two projects through a competitive bidding process, initial steps toward creating an infrastructure development bank, and the building of cross-border transmission lines.
About IFC
IFC, a member of the World Bank Group, fosters sustainable economic growth in developing countries by financing private sector investment, mobilizing private capital in local and international financial markets, and providing advisory and risk mitigation services to businesses and governments. IFC’s vision is that people should have the opportunity to escape poverty and improve their lives. In FY07, IFC committed $8.2 billion and mobilized an additional $3.9 billion through syndications and structured finance for 299 investments in 69 developing countries. IFC also provided advisory services in 97 countries. For more information, visit www.ifc.org.
About the Independent Power Producers’ Association of Nepal
IPPAN is a nonprofit, nongovernmental organization with the objectives to address constraints facing hydropower project development in Nepal and assist the government and domestic and international private sector developers in this field. Its activities include identifying incompatibility in existing legal and regulatory frameworks, following international trends in project financing, understanding power markets and their diversification within the country and wider region, reviewing conventional processes and criteria for project approval and implementation standards for efficiency, incorporating social and environmental concerns, and facilitating technical training and interaction among power producers in Nepal and worldwide.
Nepali overseas workers double in five years
Nepali overseas workers double in five years
eKantipur, 20-Jul-08
BY PRABHAKAR GHIMIRE
In what may be termed an indication of growing unemployment in the country, the number of Nepali youths moving out for overseas jobs has more than doubled over the past five years.
Slim employment opportunities and greater access to labor destinations amid sprouting manpower agencies has contributed to the soaring number of workers leaving for overseas jobs.
The number of Nepalis going for foreign employment has grown at double-digit steadily over this period. In the fiscal year 2007/08, which ended last week, the number of overseas job goers grew by 20 percent, compared to the previous fiscal year.
Statistics of Department of Labor shows that a total of 239,637 Nepali job seekers left for different destinations - mostly for blue-collar work - during the year. The number was 199,191 during the fiscal year 2006/07.
Only 106,660 workers in total had left for foreign jobs in fiscal year 2003/04.
Officials attribute such a remarkable growth of overseas employment to the positive impact of labor pacts signed by Nepal with four recipient countries.
Over the last two years, Nepal has signed Memorandum of Understanding with the United Arab Emirates (UAE), Korea, Qatar and Bahrain to ensure greater rights of Nepali workers there.
As a result of labor agreements and change in working environment, the preferences regarding different destinations have also changed over the period.
Qatar became the most favored destination for Nepali workers during the last fiscal year receiving 85,411 workers , 47 percent up from the number recorded during a year earlier.
Data shows, Malaysia became the second largest country from most preferred destination in the last fiscal year. It received only 50,526 Nepali workers, which was about 28 percent less than the previous fiscal year.
The United Arab Emirates and Saudi Arabia also witnessed double digit growth in the arrival of Nepali workers.
However, more than 93 percent of the total outgoing workers are concentrated on the largest four recipients due to lack of diversification of labor destinations.
"Lack of employment opportunities within the country has drive up the number of Nepali workers seeking overseas jobs even for meager remuneration," Dilli Ram Sharma, director of Department of Labor and Employment Promotion (DoLEP) told the Post.
"Increasing personal access to the outer world has also helped in finding overseas jobs in recent years, said Sharma.
eKantipur, 20-Jul-08
BY PRABHAKAR GHIMIRE
In what may be termed an indication of growing unemployment in the country, the number of Nepali youths moving out for overseas jobs has more than doubled over the past five years.
Slim employment opportunities and greater access to labor destinations amid sprouting manpower agencies has contributed to the soaring number of workers leaving for overseas jobs.
The number of Nepalis going for foreign employment has grown at double-digit steadily over this period. In the fiscal year 2007/08, which ended last week, the number of overseas job goers grew by 20 percent, compared to the previous fiscal year.
Statistics of Department of Labor shows that a total of 239,637 Nepali job seekers left for different destinations - mostly for blue-collar work - during the year. The number was 199,191 during the fiscal year 2006/07.
Only 106,660 workers in total had left for foreign jobs in fiscal year 2003/04.
Officials attribute such a remarkable growth of overseas employment to the positive impact of labor pacts signed by Nepal with four recipient countries.
Over the last two years, Nepal has signed Memorandum of Understanding with the United Arab Emirates (UAE), Korea, Qatar and Bahrain to ensure greater rights of Nepali workers there.
As a result of labor agreements and change in working environment, the preferences regarding different destinations have also changed over the period.
Qatar became the most favored destination for Nepali workers during the last fiscal year receiving 85,411 workers , 47 percent up from the number recorded during a year earlier.
Data shows, Malaysia became the second largest country from most preferred destination in the last fiscal year. It received only 50,526 Nepali workers, which was about 28 percent less than the previous fiscal year.
The United Arab Emirates and Saudi Arabia also witnessed double digit growth in the arrival of Nepali workers.
However, more than 93 percent of the total outgoing workers are concentrated on the largest four recipients due to lack of diversification of labor destinations.
"Lack of employment opportunities within the country has drive up the number of Nepali workers seeking overseas jobs even for meager remuneration," Dilli Ram Sharma, director of Department of Labor and Employment Promotion (DoLEP) told the Post.
"Increasing personal access to the outer world has also helped in finding overseas jobs in recent years, said Sharma.
Thursday, July 17, 2008
Fuel subsidies take a toll on Nepal economy
Fuel subsidies take a toll on Nepal economy
IHT, 30-Jun-08
By Nicholas Owen
Yogendra Raj Sharma, on a recent day, had been waiting in line for six hours at a service station in Katmandu to fill the motorcycle he uses to drive to work. "It's very bad," he said. "Without petrol I cannot get to work, so I have to spend my time here."
Ending the fuel shortages that have kept Sharma, a civil engineer, and thousands of other Katmandu residents waiting in line for hours is one of the main challenges facing the Maoist leader Prachanda, who is widely expected to head the next government following the resignation on June 26 of Girija Prasad Koirala as prime minister.
Nepal subsidizes the retail price of gasoline, diesel and other fuel products. But the state-owned Nepal Oil Corp., which has a monopoly over fuel procurement and distribution, cannot afford to keep selling at a loss.
As world oil prices rise, so do the company's financial losses. Officials have estimated these will reach a record 8.5 billion Nepalese rupees, or $131.8 million, by the end of the fiscal year on July 15, representing 10 percent of the government's budgeted tax revenue. In May, the company's monthly loss rose to 1.78 billion rupees, according to official estimates - equivalent on an annual basis to about 3 percent of Nepal's gross domestic product.
"Clearly it's not sustainable," said Alexander Pitt, the International Monetary Fund's representative here.
With official lending to Nepal Oil putting public finances under strain, Koirala's government raised fuel prices on June 9 for the first time since October. Retail prices for petrol, diesel, kerosene and liquefied petroleum gas were increased by 25 percent, 24 percent, 27 percent and 9 percent, respectively.
With that, and yet another loan to the company, the line at the filling station used by Sharma disappeared. Bus drivers, however, responded by blockading roads across Katmandu until the government agreed to raise regulated transport fares. Student groups protested against higher fares by burning tires and vandalizing vehicles.
Even after the price increases, the oil company will still be selling at a loss. Pitt, the IMF representative, said the price rise was a "positive step," but "it goes only some way towards resolving the crisis."
Because of its losses, the company cannot make regular payments to Indian Oil Corp., its sole supplier, which routinely suspends cross-border fuel shipments. As a result, Nepal Oil often imports less than half of the country's daily requirement of two million liters, or 530,000 gallons.
Pitt said the government's "ad hoc" subsidy policy was part of the problem. Instead of agreeing to regular payments to ensure regular supplies, it has waited until filling stations run out of fuel before stepping in with additional loans or price increases.
"If it was just fiscal losses that would be one problem, but it's not only that, it's the disruption that comes with it," Pitt said.
Fuel shortages are one of the three biggest constraints on business activity in Nepal, along with power cuts and labor disputes, said Rajendra Khetan, president of the Young Entrepreneurs' Council, a business lobby.
"It curtails the productivity of the industrial sector," Khetan said, and the higher prices for consumer goods that result from low productivity contribute to increasing wage demands by trade unions.
"There's a whole chain impact," Khetan said.
In the dry season, from October to April, when low water levels at hydroelectric plants often cause the state-owned Nepal Electricity Authority (NEA) to cut power supplies to factories, fuel shortages mean the lost power cannot be replaced by running diesel-powered back-up generators.
After recent consultations with Nepalese officials, the IMF's executive directors recommended that to end the shortages, the government should abolish fixed prices and "consider introducing an automatic pricing mechanism for petroleum products." But so far, the country's politicians have not proposed freeing prices to rise and fall with global trends.
Nepal's fuel subsidies are widely acknowledged to benefit mainly the relatively well-off, who can at least afford cars or motorcycles. Critics of the subsidies say that by canceling them, money could be used for improving basic services for the poor. According to budget figures, the oil company's expected annual loss represents 30 percent of the government's planned expenditure on education, and 70 percent of its planned spending on health care.
Communication is part of the problem, but implementation is a bigger problem, Pitt said. The company has failed to ensure that filling stations can buy fuel even after price increases.
"When there have been price increases in the past, they have not led to a visible improvement in the supply situation," Pitt said.
Fuel lines reappeared about a week after the latest price rise and fuel station owners went on strike, saying that the company was still not providing them with sufficient supplies.
Recently, Koirala's government tried a dual-pricing system, theoretically allowing some filling stations to distribute fuel at cost. It did not work - Nepal Oil was still unable to ensure supplies.
"You cannot have two prices," Khetan said. "The system has to be privatized."
The government took a cautious step toward doing that when it announced the price increases this month, saying that it would abolish the oil company's 30-year monopoly. But unless prices are liberalized and subsidies ended, private-sector participation in the fuel business is likely to be limited.
"If the price remains regulated at a low cost then there will be no incentive for the private sector to enter the market," Pitt said.
Deregulating prices is not something the country's politicians are prepared to consider. And in elections held on April 10, Prachanda's Maoists emerged as the largest party in the Constituent Assembly. The Maoists have not said how they will address fuel shortages but abolishing subsidies would likely be a step too far for a party that only signed a cease-fire ending its 10-year "people's war" in November 2006.
IHT, 30-Jun-08
By Nicholas Owen
Yogendra Raj Sharma, on a recent day, had been waiting in line for six hours at a service station in Katmandu to fill the motorcycle he uses to drive to work. "It's very bad," he said. "Without petrol I cannot get to work, so I have to spend my time here."
Ending the fuel shortages that have kept Sharma, a civil engineer, and thousands of other Katmandu residents waiting in line for hours is one of the main challenges facing the Maoist leader Prachanda, who is widely expected to head the next government following the resignation on June 26 of Girija Prasad Koirala as prime minister.
Nepal subsidizes the retail price of gasoline, diesel and other fuel products. But the state-owned Nepal Oil Corp., which has a monopoly over fuel procurement and distribution, cannot afford to keep selling at a loss.
As world oil prices rise, so do the company's financial losses. Officials have estimated these will reach a record 8.5 billion Nepalese rupees, or $131.8 million, by the end of the fiscal year on July 15, representing 10 percent of the government's budgeted tax revenue. In May, the company's monthly loss rose to 1.78 billion rupees, according to official estimates - equivalent on an annual basis to about 3 percent of Nepal's gross domestic product.
"Clearly it's not sustainable," said Alexander Pitt, the International Monetary Fund's representative here.
With official lending to Nepal Oil putting public finances under strain, Koirala's government raised fuel prices on June 9 for the first time since October. Retail prices for petrol, diesel, kerosene and liquefied petroleum gas were increased by 25 percent, 24 percent, 27 percent and 9 percent, respectively.
With that, and yet another loan to the company, the line at the filling station used by Sharma disappeared. Bus drivers, however, responded by blockading roads across Katmandu until the government agreed to raise regulated transport fares. Student groups protested against higher fares by burning tires and vandalizing vehicles.
Even after the price increases, the oil company will still be selling at a loss. Pitt, the IMF representative, said the price rise was a "positive step," but "it goes only some way towards resolving the crisis."
Because of its losses, the company cannot make regular payments to Indian Oil Corp., its sole supplier, which routinely suspends cross-border fuel shipments. As a result, Nepal Oil often imports less than half of the country's daily requirement of two million liters, or 530,000 gallons.
Pitt said the government's "ad hoc" subsidy policy was part of the problem. Instead of agreeing to regular payments to ensure regular supplies, it has waited until filling stations run out of fuel before stepping in with additional loans or price increases.
"If it was just fiscal losses that would be one problem, but it's not only that, it's the disruption that comes with it," Pitt said.
Fuel shortages are one of the three biggest constraints on business activity in Nepal, along with power cuts and labor disputes, said Rajendra Khetan, president of the Young Entrepreneurs' Council, a business lobby.
"It curtails the productivity of the industrial sector," Khetan said, and the higher prices for consumer goods that result from low productivity contribute to increasing wage demands by trade unions.
"There's a whole chain impact," Khetan said.
In the dry season, from October to April, when low water levels at hydroelectric plants often cause the state-owned Nepal Electricity Authority (NEA) to cut power supplies to factories, fuel shortages mean the lost power cannot be replaced by running diesel-powered back-up generators.
After recent consultations with Nepalese officials, the IMF's executive directors recommended that to end the shortages, the government should abolish fixed prices and "consider introducing an automatic pricing mechanism for petroleum products." But so far, the country's politicians have not proposed freeing prices to rise and fall with global trends.
Nepal's fuel subsidies are widely acknowledged to benefit mainly the relatively well-off, who can at least afford cars or motorcycles. Critics of the subsidies say that by canceling them, money could be used for improving basic services for the poor. According to budget figures, the oil company's expected annual loss represents 30 percent of the government's planned expenditure on education, and 70 percent of its planned spending on health care.
Communication is part of the problem, but implementation is a bigger problem, Pitt said. The company has failed to ensure that filling stations can buy fuel even after price increases.
"When there have been price increases in the past, they have not led to a visible improvement in the supply situation," Pitt said.
Fuel lines reappeared about a week after the latest price rise and fuel station owners went on strike, saying that the company was still not providing them with sufficient supplies.
Recently, Koirala's government tried a dual-pricing system, theoretically allowing some filling stations to distribute fuel at cost. It did not work - Nepal Oil was still unable to ensure supplies.
"You cannot have two prices," Khetan said. "The system has to be privatized."
The government took a cautious step toward doing that when it announced the price increases this month, saying that it would abolish the oil company's 30-year monopoly. But unless prices are liberalized and subsidies ended, private-sector participation in the fuel business is likely to be limited.
"If the price remains regulated at a low cost then there will be no incentive for the private sector to enter the market," Pitt said.
Deregulating prices is not something the country's politicians are prepared to consider. And in elections held on April 10, Prachanda's Maoists emerged as the largest party in the Constituent Assembly. The Maoists have not said how they will address fuel shortages but abolishing subsidies would likely be a step too far for a party that only signed a cease-fire ending its 10-year "people's war" in November 2006.
Public enterprises make faltering picture
Public enterprises make faltering picture
ekantipur, 16-Jul-08
The performance of public enterprises weakened over the 2007/08 fiscal year, as 15 companies suffered losses leading to a decline in the volume of combined profits.
The Ministry of Finance (MoF), releasing a Yellow Book, projected that the enterprises earned a profit of three billion rupees during the fiscal year, as compared to eight billion rupees in the 2006/07 fiscal year.
It said mounting losses made by NOC was the prime cause to bring down the combined profits of the corporations. In the 2007/08 fiscal year, the oil supplier was projected to have suffered losses amounting to Rs 7.18 billion.
The eight billion rupees combined profits that the public enterprises managed to make in the 2006/07 fiscal year was a two-fold improvement on the profits made in the year before that.
In 2006/07, seven companied together paid combined dividends of nearly one billion rupees to the government. During the year, Nepal Telecom (NT) and the Agricultural Development Bank, Nepal (ADB/N) earned profits of six billion rupees and a billion rupees respectively.
Over the 2007/08 fiscal year, the public service providing enterprises like NT and Nepal Electricity Authority (NEA) did not do any better. MoF said NT's profit is expected to be more or less same, while NEA is expected to suffer a loss of a billion rupees.
ekantipur, 16-Jul-08
The performance of public enterprises weakened over the 2007/08 fiscal year, as 15 companies suffered losses leading to a decline in the volume of combined profits.
The Ministry of Finance (MoF), releasing a Yellow Book, projected that the enterprises earned a profit of three billion rupees during the fiscal year, as compared to eight billion rupees in the 2006/07 fiscal year.
It said mounting losses made by NOC was the prime cause to bring down the combined profits of the corporations. In the 2007/08 fiscal year, the oil supplier was projected to have suffered losses amounting to Rs 7.18 billion.
The eight billion rupees combined profits that the public enterprises managed to make in the 2006/07 fiscal year was a two-fold improvement on the profits made in the year before that.
In 2006/07, seven companied together paid combined dividends of nearly one billion rupees to the government. During the year, Nepal Telecom (NT) and the Agricultural Development Bank, Nepal (ADB/N) earned profits of six billion rupees and a billion rupees respectively.
Over the 2007/08 fiscal year, the public service providing enterprises like NT and Nepal Electricity Authority (NEA) did not do any better. MoF said NT's profit is expected to be more or less same, while NEA is expected to suffer a loss of a billion rupees.
Fuel supply worsens, over 50pc vehicles remain off road
Fuel supply worsens, over 50pc vehicles remain off road
ekantipur, 16-Jul-08
The number of four-wheelers plying the capital's roads was reduced to less than half Wednesday as the Nepal Oil Corporation (NOC) sharply cut supplies amid a three-quarter drop in imports due to the lack of funds.
The cutback left commuters stranded at different corners of the Kathmandu Valley while many packed into the few operating buses and three-wheelers (tempos).
The NOC said it distributed 72,000 liters of petrol dividing the stock equally between private and institutional retailers. The quantity is a mere 40 percent of the normal daily requirement.
Likewise, the cash-strapped state-owned petroleum importer distributed 84,000 liters of diesel, which is less than one-third of the valley's daily requirement.
“The situation is very bad. We cannot distribute even half of the required amount of fuel,” said a senior NOC official, preferring not to be named. “Imports from India have gone down to a quarter of what we consume in a day, and we neither have the funds nor anyone to turn to for money to increase imports,” he told the Post.
Sharad Bhandary, general secretary of the Nepal Petroleum Dealers Association, said that only nine private dealers received petrol on the day. “Each received a maximum of 4,000 liters, and that's only enough to create anger and quarrels among consumers rather than satisfying the need,” he said.
Bhandary added that the corporation had not distributed even a drop of fuel to private dealers from Friday to Monday. On Tuesday, it had delivered 1,800 liters to the retailers.
“With that amount of fuel, we became confused over how to distribute it and manage the crowd,” he stated.
NOC officials, moreover, added that the situation could remain bad through this week as it would need a few more days to arrange loans from domestic financial institutions. “A couple of banks have agreed to provide fresh loans. But it will take about a week before we actually get the cash, as they are just closed of their books of accounts on Tuesday,” he said.
He informed the Post that the corporation has sought additional financial support of Rs 1.5 billion from the government. A request in this connection was forwarded to the Supplies Ministry earlier this week.
But officials said they did not expect any immediate decision on the matter as the current government was preparing to hand over charge to the incoming administration and might not take financial decisions at this late hour.
ekantipur, 16-Jul-08
The number of four-wheelers plying the capital's roads was reduced to less than half Wednesday as the Nepal Oil Corporation (NOC) sharply cut supplies amid a three-quarter drop in imports due to the lack of funds.
The cutback left commuters stranded at different corners of the Kathmandu Valley while many packed into the few operating buses and three-wheelers (tempos).
The NOC said it distributed 72,000 liters of petrol dividing the stock equally between private and institutional retailers. The quantity is a mere 40 percent of the normal daily requirement.
Likewise, the cash-strapped state-owned petroleum importer distributed 84,000 liters of diesel, which is less than one-third of the valley's daily requirement.
“The situation is very bad. We cannot distribute even half of the required amount of fuel,” said a senior NOC official, preferring not to be named. “Imports from India have gone down to a quarter of what we consume in a day, and we neither have the funds nor anyone to turn to for money to increase imports,” he told the Post.
Sharad Bhandary, general secretary of the Nepal Petroleum Dealers Association, said that only nine private dealers received petrol on the day. “Each received a maximum of 4,000 liters, and that's only enough to create anger and quarrels among consumers rather than satisfying the need,” he said.
Bhandary added that the corporation had not distributed even a drop of fuel to private dealers from Friday to Monday. On Tuesday, it had delivered 1,800 liters to the retailers.
“With that amount of fuel, we became confused over how to distribute it and manage the crowd,” he stated.
NOC officials, moreover, added that the situation could remain bad through this week as it would need a few more days to arrange loans from domestic financial institutions. “A couple of banks have agreed to provide fresh loans. But it will take about a week before we actually get the cash, as they are just closed of their books of accounts on Tuesday,” he said.
He informed the Post that the corporation has sought additional financial support of Rs 1.5 billion from the government. A request in this connection was forwarded to the Supplies Ministry earlier this week.
But officials said they did not expect any immediate decision on the matter as the current government was preparing to hand over charge to the incoming administration and might not take financial decisions at this late hour.
Fuel supply worsens, over 50pc vehicles remain off road
Fuel supply worsens, over 50pc vehicles remain off road
ekantipur, 16-Jul-08
The number of four-wheelers plying the capital's roads was reduced to less than half Wednesday as the Nepal Oil Corporation (NOC) sharply cut supplies amid a three-quarter drop in imports due to the lack of funds.
The cutback left commuters stranded at different corners of the Kathmandu Valley while many packed into the few operating buses and three-wheelers (tempos).
The NOC said it distributed 72,000 liters of petrol dividing the stock equally between private and institutional retailers. The quantity is a mere 40 percent of the normal daily requirement.
Likewise, the cash-strapped state-owned petroleum importer distributed 84,000 liters of diesel, which is less than one-third of the valley's daily requirement.
“The situation is very bad. We cannot distribute even half of the required amount of fuel,” said a senior NOC official, preferring not to be named. “Imports from India have gone down to a quarter of what we consume in a day, and we neither have the funds nor anyone to turn to for money to increase imports,” he told the Post.
Sharad Bhandary, general secretary of the Nepal Petroleum Dealers Association, said that only nine private dealers received petrol on the day. “Each received a maximum of 4,000 liters, and that's only enough to create anger and quarrels among consumers rather than satisfying the need,” he said.
Bhandary added that the corporation had not distributed even a drop of fuel to private dealers from Friday to Monday. On Tuesday, it had delivered 1,800 liters to the retailers.
“With that amount of fuel, we became confused over how to distribute it and manage the crowd,” he stated.
NOC officials, moreover, added that the situation could remain bad through this week as it would need a few more days to arrange loans from domestic financial institutions. “A couple of banks have agreed to provide fresh loans. But it will take about a week before we actually get the cash, as they are just closed of their books of accounts on Tuesday,” he said.
He informed the Post that the corporation has sought additional financial support of Rs 1.5 billion from the government. A request in this connection was forwarded to the Supplies Ministry earlier this week.
But officials said they did not expect any immediate decision on the matter as the current government was preparing to hand over charge to the incoming administration and might not take financial decisions at this late hour.
ekantipur, 16-Jul-08
The number of four-wheelers plying the capital's roads was reduced to less than half Wednesday as the Nepal Oil Corporation (NOC) sharply cut supplies amid a three-quarter drop in imports due to the lack of funds.
The cutback left commuters stranded at different corners of the Kathmandu Valley while many packed into the few operating buses and three-wheelers (tempos).
The NOC said it distributed 72,000 liters of petrol dividing the stock equally between private and institutional retailers. The quantity is a mere 40 percent of the normal daily requirement.
Likewise, the cash-strapped state-owned petroleum importer distributed 84,000 liters of diesel, which is less than one-third of the valley's daily requirement.
“The situation is very bad. We cannot distribute even half of the required amount of fuel,” said a senior NOC official, preferring not to be named. “Imports from India have gone down to a quarter of what we consume in a day, and we neither have the funds nor anyone to turn to for money to increase imports,” he told the Post.
Sharad Bhandary, general secretary of the Nepal Petroleum Dealers Association, said that only nine private dealers received petrol on the day. “Each received a maximum of 4,000 liters, and that's only enough to create anger and quarrels among consumers rather than satisfying the need,” he said.
Bhandary added that the corporation had not distributed even a drop of fuel to private dealers from Friday to Monday. On Tuesday, it had delivered 1,800 liters to the retailers.
“With that amount of fuel, we became confused over how to distribute it and manage the crowd,” he stated.
NOC officials, moreover, added that the situation could remain bad through this week as it would need a few more days to arrange loans from domestic financial institutions. “A couple of banks have agreed to provide fresh loans. But it will take about a week before we actually get the cash, as they are just closed of their books of accounts on Tuesday,” he said.
He informed the Post that the corporation has sought additional financial support of Rs 1.5 billion from the government. A request in this connection was forwarded to the Supplies Ministry earlier this week.
But officials said they did not expect any immediate decision on the matter as the current government was preparing to hand over charge to the incoming administration and might not take financial decisions at this late hour.
Upper Tamakoshi : NEA, HBL ink Rs 6b deal
Upper Tamakoshi : NEA, HBL ink Rs 6b deal
ekantipur, 16-Jul-08
The 309-megawatt (MW) Upper Tamakoshi hydroelectric project made one more significant step towards materializing after Nepal Electricity Authority (NEA) and Himalayan Bank Ltd (HBL) Wednesday signed a memorandum of understanding (MoU) in connection with investment in the project.
A consortium of 10 commercial banks of which HBL is to be the lead bank, will mobilize six billion rupees for the project. Arjun Karki, Executive Director of NEA, and Ashok SJB Rana, Chief Executive Officer of HBL, singed the MoU on Wednesday at a program organized at NEA premises.
The Employees Provident Fund (EPF) has already decided to invest Rs 12 billion in the project and it also signed a MoU with NEA a few months back.
"Now we need around three to four billion rupees more for the project," said Karki at the signing function, adding, "Also, talks are underway with Rastriya Beema Sansthan and the Citizens' Investment Fund for arranging more funds for the project."
"Hence, we can very confidently arrange the financing arrangement and take the project ahead." The project's total estimated cost is Rs 27 billion.
He said this development has shown that Nepalis can quite efficiently build big hydroelectric projects on their own. "The commercial banks' support has boosted our confidence and indicated ample opportunity in the local markets," he said. Rana of HBL said the prospect of financing such a big project was a great oppertunity for local banks. "This is a good opportunity to prove one’s capacity because it is the first big project to be built with the investment of Nepali banks alone," Rana added.
Upper Tamakoshi located in the northern part of Dolakha district is a run-of-river project.
The project is taken as an ideal one in terms of cost and location.
NEA, which holds the license for the project, plans to complete it by 2013 BS for selling power entirely inside Nepal.
"We are six months behind the scheduled plan," Karki said, adding that NEA is going to call for a tender bid in a month to construct the tunnel.
Karki urged commercial banks to invest in building the transmission lines required in several parts of the country.
ekantipur, 16-Jul-08
The 309-megawatt (MW) Upper Tamakoshi hydroelectric project made one more significant step towards materializing after Nepal Electricity Authority (NEA) and Himalayan Bank Ltd (HBL) Wednesday signed a memorandum of understanding (MoU) in connection with investment in the project.
A consortium of 10 commercial banks of which HBL is to be the lead bank, will mobilize six billion rupees for the project. Arjun Karki, Executive Director of NEA, and Ashok SJB Rana, Chief Executive Officer of HBL, singed the MoU on Wednesday at a program organized at NEA premises.
The Employees Provident Fund (EPF) has already decided to invest Rs 12 billion in the project and it also signed a MoU with NEA a few months back.
"Now we need around three to four billion rupees more for the project," said Karki at the signing function, adding, "Also, talks are underway with Rastriya Beema Sansthan and the Citizens' Investment Fund for arranging more funds for the project."
"Hence, we can very confidently arrange the financing arrangement and take the project ahead." The project's total estimated cost is Rs 27 billion.
He said this development has shown that Nepalis can quite efficiently build big hydroelectric projects on their own. "The commercial banks' support has boosted our confidence and indicated ample opportunity in the local markets," he said. Rana of HBL said the prospect of financing such a big project was a great oppertunity for local banks. "This is a good opportunity to prove one’s capacity because it is the first big project to be built with the investment of Nepali banks alone," Rana added.
Upper Tamakoshi located in the northern part of Dolakha district is a run-of-river project.
The project is taken as an ideal one in terms of cost and location.
NEA, which holds the license for the project, plans to complete it by 2013 BS for selling power entirely inside Nepal.
"We are six months behind the scheduled plan," Karki said, adding that NEA is going to call for a tender bid in a month to construct the tunnel.
Karki urged commercial banks to invest in building the transmission lines required in several parts of the country.
Tuesday, July 15, 2008
Company of the month: Chaudhary Group
Company of the month: Chaudhary Group
NepaliTimes, Issue #408 (11-Jul-08 to 17-Jul-08)
Kiran Nepal
Nepali multinational: Chaudhary Group spreads its wings beyond Nepal
"We now have to let economic agenda take centre stage in Nepal," says Binod Chaudhary, "we are done with politics."
The 53-year-old head of the Chaudhary Group (CG) says this is the reason he agreed to become a UML-nominated member of the Constituent Assembly along with other businessmen.
"This is why my colleagues and I joined the assembly. We now want to make sure that the economy takes centre stage," Chaudhary said in an interview after being selected as the Nepali Times Company of the Month for July.
Binod Chaudhary has a lot to be proud of: a third-generation Nepali Marwari business family that has become Nepal's first multinational with over $500 million in assets and revenues that Forbes Asia recently called 'among Nepal's richest non-royals'.
Chaudhary's Cinnovation group with its hotel division has invested in tourism, manufacturing and trade, owning hotels in New York, Malaysia, Maldives and Sri Lanka. The group is still in full expansion mode with partners to set up luxury hotels in Singapore, Thailand and Bali.
But Chaudhary still sees Nepal as his base. "You have to have a certain mindset to be a global player," he says, "but our roots are here and I get the greatest satisfaction from being able to invest and create new jobs in Nepal."
Indeed, ever since taking over from his father Lunkaran Das Chaudhary and starting a department store in New Road in the 1970s, CG is now the biggest business player in Nepal literally 'Touching Life Everyday', as the company's motto has it. CG's WaiWai instant noodle is a recognised and established brand not just in Nepal but in 20 different countries. CG's trading wing sells LG electronics and Marutis.
"Entrepreneurship only really took off after the Panchayat, but even through the difficult period after 1990 there has been dramatic growth in business in Nepal," says Chaudhary, "in fact, if there were right policies and proper governance, Nepal's economy could really take off."
Chaudhary says Nepal should now concentrate on core areas like manufacturing, hydropower, financial services and tourism and would like to work to make investment possible in these sectors as a member of the CA.
In fact, CG itself is investing in a 2 million ton annual capacity cement plant. Nepal consumes 2.6 million tons of cement annually, and this is expected to grow at 15 per cent a year.
Chaudhary also sees no other alternative but to invest boldly in hydropower in a big way to reduce Nepal's growing balance of payments gap with India. His group alone is involved in studying several projects in the
5 MW-600 MW range totaling 1,700 MW. Investment in cement, tourism and hydropower alone could create hundreds of thousands of new jobs.
"If there is one job that is really easy in the world, it is to raise capital through mutual funds, venture capital. All you need is a track record and a good idea," he says. Chaudhary is confident that with proper support there is no reason why up to 10 other Nepali businesses can also expand their overseas investments.
Chaudhary is not as pessimistic as others about a new government led by the Maoists. He says the regime change is an opportunity for Nepal to be more focussed on private sector-led growth, provide an investment-friendly climate for domestic and foreign investors and allow industries to spread their wings in an unfettered way.
Chaudhary has one pet-idea that he says could immediately increase national income: train 50,000 workers waiting to go abroad in English and basic skills to double their monthly income. This, he says, will have an immediate impact on remittances.
Rahul, Nirvana and Varun Chaudhary with Dad Binod (white suit)
NepaliTimes, Issue #408 (11-Jul-08 to 17-Jul-08)
Kiran Nepal
Nepali multinational: Chaudhary Group spreads its wings beyond Nepal
"We now have to let economic agenda take centre stage in Nepal," says Binod Chaudhary, "we are done with politics."
The 53-year-old head of the Chaudhary Group (CG) says this is the reason he agreed to become a UML-nominated member of the Constituent Assembly along with other businessmen.
"This is why my colleagues and I joined the assembly. We now want to make sure that the economy takes centre stage," Chaudhary said in an interview after being selected as the Nepali Times Company of the Month for July.
Binod Chaudhary has a lot to be proud of: a third-generation Nepali Marwari business family that has become Nepal's first multinational with over $500 million in assets and revenues that Forbes Asia recently called 'among Nepal's richest non-royals'.
Chaudhary's Cinnovation group with its hotel division has invested in tourism, manufacturing and trade, owning hotels in New York, Malaysia, Maldives and Sri Lanka. The group is still in full expansion mode with partners to set up luxury hotels in Singapore, Thailand and Bali.
But Chaudhary still sees Nepal as his base. "You have to have a certain mindset to be a global player," he says, "but our roots are here and I get the greatest satisfaction from being able to invest and create new jobs in Nepal."
Indeed, ever since taking over from his father Lunkaran Das Chaudhary and starting a department store in New Road in the 1970s, CG is now the biggest business player in Nepal literally 'Touching Life Everyday', as the company's motto has it. CG's WaiWai instant noodle is a recognised and established brand not just in Nepal but in 20 different countries. CG's trading wing sells LG electronics and Marutis.
"Entrepreneurship only really took off after the Panchayat, but even through the difficult period after 1990 there has been dramatic growth in business in Nepal," says Chaudhary, "in fact, if there were right policies and proper governance, Nepal's economy could really take off."
Chaudhary says Nepal should now concentrate on core areas like manufacturing, hydropower, financial services and tourism and would like to work to make investment possible in these sectors as a member of the CA.
In fact, CG itself is investing in a 2 million ton annual capacity cement plant. Nepal consumes 2.6 million tons of cement annually, and this is expected to grow at 15 per cent a year.
Chaudhary also sees no other alternative but to invest boldly in hydropower in a big way to reduce Nepal's growing balance of payments gap with India. His group alone is involved in studying several projects in the
5 MW-600 MW range totaling 1,700 MW. Investment in cement, tourism and hydropower alone could create hundreds of thousands of new jobs.
"If there is one job that is really easy in the world, it is to raise capital through mutual funds, venture capital. All you need is a track record and a good idea," he says. Chaudhary is confident that with proper support there is no reason why up to 10 other Nepali businesses can also expand their overseas investments.
Chaudhary is not as pessimistic as others about a new government led by the Maoists. He says the regime change is an opportunity for Nepal to be more focussed on private sector-led growth, provide an investment-friendly climate for domestic and foreign investors and allow industries to spread their wings in an unfettered way.
Chaudhary has one pet-idea that he says could immediately increase national income: train 50,000 workers waiting to go abroad in English and basic skills to double their monthly income. This, he says, will have an immediate impact on remittances.
Rahul, Nirvana and Varun Chaudhary with Dad Binod (white suit)
1.5 million South Asian workers migrate every year: ILO
1.5 million South Asian workers migrate every year: ILO
Xinhua, 14-Jul-08
More than 1.5 million South Asian workers are estimated to migrate every year, many of them destined for the Gulf region to perform construction, maintenance and other service jobs, said the International Labor Organization (ILO).
For protection of the soaring number of the migrant workers from South Asia, a two-day regional symposium will be held here on July 15-16, private news agency UNB reported Monday quoting ILO sources.
The symposium on "Deployment of Workers Overseas: A Shared Responsibility" will be jointly organized by ILO and the Ministry of Expatriates Welfare and Overseas Employment of Bangladesh.
The symposium will discuss recruitment policies and cooperation mechanism between origin and destination countries and provide avenue for exchange of best practices on the preparation of workers for foreign employment and provision of on-site services and monitoring.
Representatives of Bangladesh, India, Indonesia, Malaysia, Nepal, Pakistan, Philippines, the United Arab Emirates, South Korea and Sri Lanka will participate in the symposium.
ILO says counting only those who go through regular channels, more than 200,000 workers are estimated every year from each of Sri Lanka and Pakistan and many more from Bangladesh and India.
In 2007, remittances to the region were estimated by the World Bank to have exceeded 40 billion U.S. dollars.
Of this, India accounted for 27 billion U.S. dollars, Bangladesh 6.4 billion dollars, Pakistan 6.1 billion dollars, Sri Lanka 2.7 billion dollars and Nepal
1.6 billion dollars.
Xinhua, 14-Jul-08
More than 1.5 million South Asian workers are estimated to migrate every year, many of them destined for the Gulf region to perform construction, maintenance and other service jobs, said the International Labor Organization (ILO).
For protection of the soaring number of the migrant workers from South Asia, a two-day regional symposium will be held here on July 15-16, private news agency UNB reported Monday quoting ILO sources.
The symposium on "Deployment of Workers Overseas: A Shared Responsibility" will be jointly organized by ILO and the Ministry of Expatriates Welfare and Overseas Employment of Bangladesh.
The symposium will discuss recruitment policies and cooperation mechanism between origin and destination countries and provide avenue for exchange of best practices on the preparation of workers for foreign employment and provision of on-site services and monitoring.
Representatives of Bangladesh, India, Indonesia, Malaysia, Nepal, Pakistan, Philippines, the United Arab Emirates, South Korea and Sri Lanka will participate in the symposium.
ILO says counting only those who go through regular channels, more than 200,000 workers are estimated every year from each of Sri Lanka and Pakistan and many more from Bangladesh and India.
In 2007, remittances to the region were estimated by the World Bank to have exceeded 40 billion U.S. dollars.
Of this, India accounted for 27 billion U.S. dollars, Bangladesh 6.4 billion dollars, Pakistan 6.1 billion dollars, Sri Lanka 2.7 billion dollars and Nepal
1.6 billion dollars.
Gold set to cross Rs 25,000 per tola
Gold set to cross Rs 25,000 per tola
ArthaExpress, 13-Jul-08
Taking a cue from the international market, gold in the domestic market today hit Rs 21,350 per 10 gram — Rs 24,900 per tola (11.664 gram).
“The price rise is not due to local demand but due to international price rise,” said president of Nepal Gold and Silver Dealers’ Association (NEGOSIDA) Tej Ratna Shakya, who was today again selected president unanimously for a second term.
The price of gold once again is on a bullish path. Earlier — on March 17 — gold had touched a historic high of Rs 25,000 per tola in the domestic market. “And the phenomenon may repeat itself,” he said adding that the rising international price has pushed the local price sky high despite low local demand.
In the international market, gold today hit $964.50 per ounce. The price of gold in the international market is rising even though the price of crude is also touching new highs by the day. Gold is inching towards $1000 per ounce in the international market and the domestic market too is warming up.
The continuous rise in crude price, weakening greenback and the fall in international share markets have led to the hike in the global gold price.
the domestic market, gold closed Rs 255 higher to Rs 21,090 per 10 gram on Friday from last week’s closing price of Rs 20,835.
ArthaExpress, 13-Jul-08
Taking a cue from the international market, gold in the domestic market today hit Rs 21,350 per 10 gram — Rs 24,900 per tola (11.664 gram).
“The price rise is not due to local demand but due to international price rise,” said president of Nepal Gold and Silver Dealers’ Association (NEGOSIDA) Tej Ratna Shakya, who was today again selected president unanimously for a second term.
The price of gold once again is on a bullish path. Earlier — on March 17 — gold had touched a historic high of Rs 25,000 per tola in the domestic market. “And the phenomenon may repeat itself,” he said adding that the rising international price has pushed the local price sky high despite low local demand.
In the international market, gold today hit $964.50 per ounce. The price of gold in the international market is rising even though the price of crude is also touching new highs by the day. Gold is inching towards $1000 per ounce in the international market and the domestic market too is warming up.
The continuous rise in crude price, weakening greenback and the fall in international share markets have led to the hike in the global gold price.
the domestic market, gold closed Rs 255 higher to Rs 21,090 per 10 gram on Friday from last week’s closing price of Rs 20,835.
Govt bill to spend Rs 73b passed
Govt bill to spend Rs 73b passed
ekantipur, 14-Jul-08
A meeting of the Constituent Assembly (CA) on Monday passed a special bill that authorizes the government, in the absence of a fiscal year budget, to incur expenditures totaling Rs 73.54 billion in the new fiscal year that begins from July 16.
Of the total, the government has proposed Rs 26.6 billion under a non-votable head, in an allocation for different sub-sectors over the whole fiscal year. The new financial arrangement that was tabled by Finance Minister Dr Ram Sharan Mahat has allocated Rs 25.96 billion, almost 97.6 percent, to service domestic and foreign loans during the next fiscal year. Likewise, the government has also earmarked Rs 2.5 million and Rs 2 million for the first president and vice-president respectively of the democratic republic of Nepal.
Similarly, the government has proposed Rs 46.94 billion under the votable head, an amount equivalent to one-third of the real expenditure of the current fiscal.
The endorsement will allow the government to incur expenditures. Education will absorb the largest chunk of Rs 9.48 billion followed by Rs 4.70 billion for internal security and Rs 4.05 billion for infrastructure development under the Ministry of Physical Planning and Construction.
Likewise, following endorsement of the bill, the government will have the authority to impose taxes and collect revenue as per the arrangements made in the Finance Act 2007.
If revenue collected during the period remains insufficient to meet planned expenditures, the government will have the authority to mobilize overdrafts equivalent to 5 percent of the total revenue mobilized in the current fiscal year. "However, such overdrafts will be included in internal loans under the upcoming budget for year 2008/09," states the special bill.
Informing the CA meeting about the major economic activities of the current fiscal year, Finance Minister Dr Ram Sharan Mahat said that creeping inflation and soaring petroleum losses are major concerns that can pose a challenge to future macro-economic stability.
He further informed that the government had to bear an additional burden of Rs 5 billion due to the emergence of unexpected financial obligations while settling political differences among various parties. However, he praised the revenue administration, which was able to mobilize revenue of Rs 107 billion, which is more than the annual target of Rs 103.66 billion.
ekantipur, 14-Jul-08
A meeting of the Constituent Assembly (CA) on Monday passed a special bill that authorizes the government, in the absence of a fiscal year budget, to incur expenditures totaling Rs 73.54 billion in the new fiscal year that begins from July 16.
Of the total, the government has proposed Rs 26.6 billion under a non-votable head, in an allocation for different sub-sectors over the whole fiscal year. The new financial arrangement that was tabled by Finance Minister Dr Ram Sharan Mahat has allocated Rs 25.96 billion, almost 97.6 percent, to service domestic and foreign loans during the next fiscal year. Likewise, the government has also earmarked Rs 2.5 million and Rs 2 million for the first president and vice-president respectively of the democratic republic of Nepal.
Similarly, the government has proposed Rs 46.94 billion under the votable head, an amount equivalent to one-third of the real expenditure of the current fiscal.
The endorsement will allow the government to incur expenditures. Education will absorb the largest chunk of Rs 9.48 billion followed by Rs 4.70 billion for internal security and Rs 4.05 billion for infrastructure development under the Ministry of Physical Planning and Construction.
Likewise, following endorsement of the bill, the government will have the authority to impose taxes and collect revenue as per the arrangements made in the Finance Act 2007.
If revenue collected during the period remains insufficient to meet planned expenditures, the government will have the authority to mobilize overdrafts equivalent to 5 percent of the total revenue mobilized in the current fiscal year. "However, such overdrafts will be included in internal loans under the upcoming budget for year 2008/09," states the special bill.
Informing the CA meeting about the major economic activities of the current fiscal year, Finance Minister Dr Ram Sharan Mahat said that creeping inflation and soaring petroleum losses are major concerns that can pose a challenge to future macro-economic stability.
He further informed that the government had to bear an additional burden of Rs 5 billion due to the emergence of unexpected financial obligations while settling political differences among various parties. However, he praised the revenue administration, which was able to mobilize revenue of Rs 107 billion, which is more than the annual target of Rs 103.66 billion.
Monday, July 14, 2008
US apparel firm bankruptcy hits Nepal
US apparel firm bankruptcy hits Nepal
ArthaExpress, 11-Jul-08
The bankruptcy of American apparel buyer giant Stephen Berry has put four major Nepali garment exporters at risk of losing US$ 4 million and possible closedown.
Omi Apparel, Amardeep Garment, Binita Fashion and Destination Apparels plunged deep into trouble after Stephen Berry sought protection under US Chapter 11 bankruptcy law, that gives troubled firms more time to reorganize debt obligations.
"Though the door to receipt of payments due has not been completely closed, there will certainly be delay in payment and that will land the industry in trouble," Prashanta Pokharel, owner of Omi Apparel, told the Post. However, he refused to elaborate.
Knowledgeable people in the industry said it´s not only a question of delay. Since the buyer has declared bankruptcy exporters will lose at least a chunk of the payments due.
Stephen Berry, known for dealing in cheap university labels in the US, has been importing a substantial volume of garments from Nepal over the last half decade.
In the latest deal, it placed orders worth US$ 5.25 million with the four Nepali manufacturers in January. Of that, the exporters said they have received payment of only US$ 400,000. While they are yet to dispatch last consignments worth US$ 850,000, they
are also supposed to have received payment of $ 4 million for consignments already dispatched.
According to exporters, the Stephen Berry bankruptcy is bad news for the four exporters and for the Nepali garment industry as a whole. As chances of the US economy going into recession are heightening, exporters warned that more such cases can surface in the days to come.
Delay in payment, which they said is the best case scenario in the Stephen Berry deal, would still affect timely release of bank guarantees, freeze assets, subject them to fines and affect future operations, unless the banks came to the rescue.
"If the court refuses Stephen Berry´s appeal, the company will have to go into liquidation, which will be a disaster for Nepali manufacturers," said an official at the Garment Association of Nepal, requesting not to be named.
Nepal´s garment industry, which had investment of Rs 9 billion and had over 200 players in 2001, currently comprises just a dozen companies because of eroding competitiveness and internal problems.
ArthaExpress, 11-Jul-08
The bankruptcy of American apparel buyer giant Stephen Berry has put four major Nepali garment exporters at risk of losing US$ 4 million and possible closedown.
Omi Apparel, Amardeep Garment, Binita Fashion and Destination Apparels plunged deep into trouble after Stephen Berry sought protection under US Chapter 11 bankruptcy law, that gives troubled firms more time to reorganize debt obligations.
"Though the door to receipt of payments due has not been completely closed, there will certainly be delay in payment and that will land the industry in trouble," Prashanta Pokharel, owner of Omi Apparel, told the Post. However, he refused to elaborate.
Knowledgeable people in the industry said it´s not only a question of delay. Since the buyer has declared bankruptcy exporters will lose at least a chunk of the payments due.
Stephen Berry, known for dealing in cheap university labels in the US, has been importing a substantial volume of garments from Nepal over the last half decade.
In the latest deal, it placed orders worth US$ 5.25 million with the four Nepali manufacturers in January. Of that, the exporters said they have received payment of only US$ 400,000. While they are yet to dispatch last consignments worth US$ 850,000, they
are also supposed to have received payment of $ 4 million for consignments already dispatched.
According to exporters, the Stephen Berry bankruptcy is bad news for the four exporters and for the Nepali garment industry as a whole. As chances of the US economy going into recession are heightening, exporters warned that more such cases can surface in the days to come.
Delay in payment, which they said is the best case scenario in the Stephen Berry deal, would still affect timely release of bank guarantees, freeze assets, subject them to fines and affect future operations, unless the banks came to the rescue.
"If the court refuses Stephen Berry´s appeal, the company will have to go into liquidation, which will be a disaster for Nepali manufacturers," said an official at the Garment Association of Nepal, requesting not to be named.
Nepal´s garment industry, which had investment of Rs 9 billion and had over 200 players in 2001, currently comprises just a dozen companies because of eroding competitiveness and internal problems.
Nepal’s garment industry close to losing its shirt
Nepal’s garment industry close to losing its shirt
ekantipur, 10-Jul-08
Nepal's garment exports to the US dropped by nearly half during the last six months as a result of buyers' waning interest in the leading foreign currency earning industry due to eroding competitiveness and internal labor problems.
Nepal sold US$ 8.96 million worth of readymade clothes to the US in the first six months of 2008. According to the Garment Association of Nepal (GAN), the figure was a 43 percent decline from the same period last year.
GAN's monthly trading data shows that the fall in garment exports to the world's largest apparel market was the steepest in June. Exports plummeted 71 percent to US$ 929,366 from US$ 3.21 million during the same month last year.
Entrepreneurs, who have long been demanding support from political leaders to bring discipline in the labor force, said business has been in free fall for 24 months straight.
“The government still has not shown any seriousness to develop a garment processing zone (GPZ), a program which was announced two years ago to help us cut production costs by a quarter,” said a GAN official. Nepal's garment industry, which is largely dependent on the US market, has been going downhill from 2002 when the US pledged duty-free market access to its major competitors in Sub-Saharan and Caribbean countries.
The end of the quota regime in international apparel trading in 2005 came as another blow, while internal instability, labor stirs and deteriorated industrial security forced well over 90 percent of the manufacturing units to close up shop over the past three years.
The industry, which in 2001 had some 200 operators with investments amounting to Rs 6 billion and employed over 60,000 persons, is down to a mere dozen manufacturers.
Nepali exporters have been pressing the government for the past five years to mobilize its diplomatic channels to secure duty-free facility in the US market. They even tied up with other Asian garment producing LDCs to directly lobby for special preference. “Sadly, all our pleas fell on deaf ears,” said the official. Even the bill recommending special preference for Asian LDCs that a US congressmen had tabled a couple of years ago got nowhere.
Despite the gloom running deep in the industry, garment entrepreneurs said that the industry could still regain its former glory if the GPZ was developed urgently, foreign investment was brought in and the government announced minimal fiscal and procedural support.
ekantipur, 10-Jul-08
Nepal's garment exports to the US dropped by nearly half during the last six months as a result of buyers' waning interest in the leading foreign currency earning industry due to eroding competitiveness and internal labor problems.
Nepal sold US$ 8.96 million worth of readymade clothes to the US in the first six months of 2008. According to the Garment Association of Nepal (GAN), the figure was a 43 percent decline from the same period last year.
GAN's monthly trading data shows that the fall in garment exports to the world's largest apparel market was the steepest in June. Exports plummeted 71 percent to US$ 929,366 from US$ 3.21 million during the same month last year.
Entrepreneurs, who have long been demanding support from political leaders to bring discipline in the labor force, said business has been in free fall for 24 months straight.
“The government still has not shown any seriousness to develop a garment processing zone (GPZ), a program which was announced two years ago to help us cut production costs by a quarter,” said a GAN official. Nepal's garment industry, which is largely dependent on the US market, has been going downhill from 2002 when the US pledged duty-free market access to its major competitors in Sub-Saharan and Caribbean countries.
The end of the quota regime in international apparel trading in 2005 came as another blow, while internal instability, labor stirs and deteriorated industrial security forced well over 90 percent of the manufacturing units to close up shop over the past three years.
The industry, which in 2001 had some 200 operators with investments amounting to Rs 6 billion and employed over 60,000 persons, is down to a mere dozen manufacturers.
Nepali exporters have been pressing the government for the past five years to mobilize its diplomatic channels to secure duty-free facility in the US market. They even tied up with other Asian garment producing LDCs to directly lobby for special preference. “Sadly, all our pleas fell on deaf ears,” said the official. Even the bill recommending special preference for Asian LDCs that a US congressmen had tabled a couple of years ago got nowhere.
Despite the gloom running deep in the industry, garment entrepreneurs said that the industry could still regain its former glory if the GPZ was developed urgently, foreign investment was brought in and the government announced minimal fiscal and procedural support.
Thursday, July 10, 2008
New monetary policy to focus on inflation
New monetary policy to focus on inflation
ekantipur, 9-Jul-08
With a major focus on curtailing the swelling inflation that is already close to 10 percent, Nepal Rastra Bank is all set to bring out its Monetary Policy for the next fiscal year, even though the government is deferring on the announcement of a new fiscal budget.
A high ranking government official told the Post that the central bank is making all the necessary preparations to announce its annual monetary policy in the third week of July. "As per the NRB Act, we will make the monetary policy public on the usual time despite the fact that the government is delaying the announcement of a new budget," said the official.
He further said that as the central bank can amend its monetary policy anytime, it will do so if the policies or provisions of the upcoming budget contradict with NRB's monetary policy.
He said that the major focus of the new monetary policy would be to deal with the rising price level, though the central bank has limited policy options. Since rising inflation is a global phenomenon, domestic policy can hardly make any remarkable impact to keep the inflation level within a desired level.
However, he dropped hints that there will be no change in the existing bank rate and Cash Reserve Ratio (CRR) to squeeze liquidity to control inflation, as there is neither a liquidity crunch nor excess liquidity to fuel the inflation. "Curtailing money supply in the name of limiting inflation will hurt growth prospects and that is something we don't want," he said.
He further said that the upcoming monetary policy would take measures to increase interest rates on deposits to provide some relief to the depositors, who are facing a negative interest rate.
"Higher interest rates on deposits will also help curtail consumption," he said and added that there will not be any remarkable impact on investment even if the lending rates go up by one to two percentage points.
The official said that the monetary policy is less likely to announce any major policy changes for promoting exports and added that there are hardly any measures that can be announced to promote the sector. The monetary policy, among others, will also announce the full-fledge implementation of the Basel II, an advance account keeping tool for financial institutions aimed at raising the quality of financial transactions up to international levels and promote more transparency.
ekantipur, 9-Jul-08
With a major focus on curtailing the swelling inflation that is already close to 10 percent, Nepal Rastra Bank is all set to bring out its Monetary Policy for the next fiscal year, even though the government is deferring on the announcement of a new fiscal budget.
A high ranking government official told the Post that the central bank is making all the necessary preparations to announce its annual monetary policy in the third week of July. "As per the NRB Act, we will make the monetary policy public on the usual time despite the fact that the government is delaying the announcement of a new budget," said the official.
He further said that as the central bank can amend its monetary policy anytime, it will do so if the policies or provisions of the upcoming budget contradict with NRB's monetary policy.
He said that the major focus of the new monetary policy would be to deal with the rising price level, though the central bank has limited policy options. Since rising inflation is a global phenomenon, domestic policy can hardly make any remarkable impact to keep the inflation level within a desired level.
However, he dropped hints that there will be no change in the existing bank rate and Cash Reserve Ratio (CRR) to squeeze liquidity to control inflation, as there is neither a liquidity crunch nor excess liquidity to fuel the inflation. "Curtailing money supply in the name of limiting inflation will hurt growth prospects and that is something we don't want," he said.
He further said that the upcoming monetary policy would take measures to increase interest rates on deposits to provide some relief to the depositors, who are facing a negative interest rate.
"Higher interest rates on deposits will also help curtail consumption," he said and added that there will not be any remarkable impact on investment even if the lending rates go up by one to two percentage points.
The official said that the monetary policy is less likely to announce any major policy changes for promoting exports and added that there are hardly any measures that can be announced to promote the sector. The monetary policy, among others, will also announce the full-fledge implementation of the Basel II, an advance account keeping tool for financial institutions aimed at raising the quality of financial transactions up to international levels and promote more transparency.
Butwal Power to build Marsyhangdi III
Butwal Power to build Marsyhangdi III
ekantipur, 9-Jul-08
Butwal Power Company Ltd (BPC) on Wednesday announced it was going to develop the 42 MW Marsyangdi-III hydroelectric project at Tarkughat VDC in Lamjung district with a target of operationalizing it in four years.
Keton Hydropower Limited, a subsidiary of BPC, will develop the project. Ace Development Bank Limited will take charge of the entire financial management for the project and act as financial advisor, fund manager, trustee and also look into other matters related to project finance, said a joint press statement issued by BPC, Keton and Ace on Wednesday.
Marsyangdi-III is a run-of-river type project with an estimated annual energy generation capacity of 205 Gigawatt/hour (GWh), the statement said. "The estimated cost of the project is 78 million USD (5.4 billion rupees), that is approximately 1,850 USD per kW," it added. The company has already started the feasibility and environment impact assessment (EIA) study, and that is expected to be completed within a year, said Ranjan Lohar, Chief Executive Officer (CEO) of BPC. The project is expected to start commercial operation by 2012 AD.
Ace Development Bank will arrange necessary capital from national or international capital markets through the issuing of appropriate financial instruments (like convertible debentures), according to Siddhant Raj Pandey, CEO at Ace.
The 205 GWh generated by the project will be supplied to the Nepal market through the national grid.
BPC has successfully built and operated small and medium-sized hydroelectric projects including Tinau, Adhikhola, Jhimruk, Khimti and Khudi.
ekantipur, 9-Jul-08
Butwal Power Company Ltd (BPC) on Wednesday announced it was going to develop the 42 MW Marsyangdi-III hydroelectric project at Tarkughat VDC in Lamjung district with a target of operationalizing it in four years.
Keton Hydropower Limited, a subsidiary of BPC, will develop the project. Ace Development Bank Limited will take charge of the entire financial management for the project and act as financial advisor, fund manager, trustee and also look into other matters related to project finance, said a joint press statement issued by BPC, Keton and Ace on Wednesday.
Marsyangdi-III is a run-of-river type project with an estimated annual energy generation capacity of 205 Gigawatt/hour (GWh), the statement said. "The estimated cost of the project is 78 million USD (5.4 billion rupees), that is approximately 1,850 USD per kW," it added. The company has already started the feasibility and environment impact assessment (EIA) study, and that is expected to be completed within a year, said Ranjan Lohar, Chief Executive Officer (CEO) of BPC. The project is expected to start commercial operation by 2012 AD.
Ace Development Bank will arrange necessary capital from national or international capital markets through the issuing of appropriate financial instruments (like convertible debentures), according to Siddhant Raj Pandey, CEO at Ace.
The 205 GWh generated by the project will be supplied to the Nepal market through the national grid.
BPC has successfully built and operated small and medium-sized hydroelectric projects including Tinau, Adhikhola, Jhimruk, Khimti and Khudi.
Wednesday, July 09, 2008
All eyes on the budget
All eyes on the budget
ekantipur, 7-Jul-08
BY PROF SRI RAM POUDYAL
The upcoming budget is going to be the first to be presented by the Maoist-led government. Rightists are watching how it will embrace socialist vision and programs in the context of a liberalized economy, while leftists are pondering how the budget will combine the ideals of socialism with those of capitalism.
Whatever they may be speculating, the budget has to be designed to maintain the growth momentum, fulfill the mandate of the people's movement and adhere to fiscal discipline. The Maoists have to deliver what they promised in their CA election manifesto. Besides, there are mounting claims and aspirations of all classes and interest groups. The finance minister has the difficult task of balancing these expectations when allocating and generating the required resources. He also has to make a tradeoff between short- and long-term objectives.
The most important thing the budget should mention, even if in general terms, is the direction in which the government is steering the economy.
The finance minister inherits a legacy of fiscal profligacy characterized by a persistent budgetary deficit. In 1974, the gross fiscal deficit (excluding grants) was Rs 505.4 million. It surged to Rs 12,819.9 million in 1991 and is estimated to have ballooned to Rs 65,328.3 million today.
As a proportion of the GDP, the deficit has remained at the 6 percent level in recent years. The growing deficit has tended not only to cause a sharp increase in the debt-GDP ratio, but also exerted pressure on domestic prices and adversely affected savings and investments, and consequently, growth. Foreign grants and loans covered 57 percent of the gross deficit in 2006 and 2007. The estimate for the current fiscal year is 68.6 percent.
The question is how long and to what extent we should depend on foreign help to meet our budgetary expenditure when we are all aware of the consequences of excessive dependence on foreign aid. Keynesian intellectuals are losing ground as Nepal's tradition of unbalanced budgets has not yielded any tangible results.
So the first task is reducing the deficit. This can be done by increasing expenditure marginally if it is not possible to reduce it and if there is no rise in revenue. This brings up three important questions. First, what should be the size of the government budget? Second, how should the allocations be made? And, third, how can revenue be increased?
Nepal Rastra Bank's data for the first 10 months of the current fiscal year shows that actual expenditure is 60 percent of the estimated amount (Rs 168,995.6 million), while revenue mobilization is 76 percent of the target (Rs 103,667.3 million). It seems very likely that both the expenditure and revenue collection targets will be met. The estimated expenditure for next year will have to be certainly higher, say around Rs 200 billion, representing an increase of 18.3 percent over this year's estimate.
As inflation is estimated to be around 8 percent, the real increase will be 10 percent. The government should contain current expenditure at the present level allowing for inflation and increase the share of capital expenditure. In the last five years, capital expenditure amounted to 26 to 27 percent of total expenditure. This is just the reverse of what prevailed during the years 1975 to 1994 when the share of capital expenditure ranged between 63 to 71 percent.
The high share of current expenditure in total expenditure witnessed during the last one and a half decades has been largely due to the unnecessary expansion of the state machinery by successive governments to serve the political interests of the party in power. One can see how the staff are only partially employed at almost all the government offices. Therefore, there is a need to restructure administration to make it more effective and accountable. Unjustifiable current expenses also need to be eliminated. This will result in significant savings that could be used to meet obligations warranted by circumstances.
The allocation of capital expenditure should be done in such a way so as to maintain the growth momentum witnessed in the current year. In the course of maintaining the growth momentum, the focus should be on inclusive growth, which means concentrating on agriculture. Farming, the mainstay of 85 percent of the country's population, has been lagging behind with a nominal growth rate of 0.7 percent in 2007 and 1.1 percent in the preceding year.
The agricultural sector needs to be transformed by steering it towards greater commercialization and gradual substitution of integrated farming by enterprises specialized in crops, vegetables, horticulture, livestock and poultry. This requires development of fodder markets, effective delivery of agricultural and veterinary services to the farms and sustained investments in rural markets, transportation and communication. Moreover, crop and livestock insurance has to be provided, and floor prices and minimum wages have to be fixed.
Commercialized farming and specialized enterprises can be best achieved through producers' cooperatives. Although such organizations have proliferated, there is no vision and perspective of cooperative development. Therefore, specific policies are required to develop a new generation of cooperatives to have an impact on the agricultural sector. Such cooperatives should be able to face market competition with vertical integration and coordination as is prevalent in India, the US and Canada. Other sectors that should receive due attention in the budget are the social sector and the needs of underprivileged communities and victims of the people's movement.
With respect to industry, the strategy should be to promote public-private partnership by developing viable mechanisms and easing infrastructural and policy bottlenecks. There is a need to bring a new industrial policy to encourage the growth of export industries and discourage the rampant tendency of holding licenses - particularly for micro-hydro, mining, forestry and trading - instead of executing the projects within the stipulated time.
On the revenue front, there is plenty scope for mobilizing additional resources by enhancing tax compliance, expanding the tax base (i.e., urban property tax) and enforcing VAT. A modern computerized information system and simplified procedures will help improve tax compliance considerably. Local authorities need to be motivated to explore and tap potential revenue sources within their jurisdiction. And, of course, malpractices and corruption by tax collectors should be stopped. They siphon off a significant amount of money that would otherwise go into the state treasury.
ekantipur, 7-Jul-08
BY PROF SRI RAM POUDYAL
The upcoming budget is going to be the first to be presented by the Maoist-led government. Rightists are watching how it will embrace socialist vision and programs in the context of a liberalized economy, while leftists are pondering how the budget will combine the ideals of socialism with those of capitalism.
Whatever they may be speculating, the budget has to be designed to maintain the growth momentum, fulfill the mandate of the people's movement and adhere to fiscal discipline. The Maoists have to deliver what they promised in their CA election manifesto. Besides, there are mounting claims and aspirations of all classes and interest groups. The finance minister has the difficult task of balancing these expectations when allocating and generating the required resources. He also has to make a tradeoff between short- and long-term objectives.
The most important thing the budget should mention, even if in general terms, is the direction in which the government is steering the economy.
The finance minister inherits a legacy of fiscal profligacy characterized by a persistent budgetary deficit. In 1974, the gross fiscal deficit (excluding grants) was Rs 505.4 million. It surged to Rs 12,819.9 million in 1991 and is estimated to have ballooned to Rs 65,328.3 million today.
As a proportion of the GDP, the deficit has remained at the 6 percent level in recent years. The growing deficit has tended not only to cause a sharp increase in the debt-GDP ratio, but also exerted pressure on domestic prices and adversely affected savings and investments, and consequently, growth. Foreign grants and loans covered 57 percent of the gross deficit in 2006 and 2007. The estimate for the current fiscal year is 68.6 percent.
The question is how long and to what extent we should depend on foreign help to meet our budgetary expenditure when we are all aware of the consequences of excessive dependence on foreign aid. Keynesian intellectuals are losing ground as Nepal's tradition of unbalanced budgets has not yielded any tangible results.
So the first task is reducing the deficit. This can be done by increasing expenditure marginally if it is not possible to reduce it and if there is no rise in revenue. This brings up three important questions. First, what should be the size of the government budget? Second, how should the allocations be made? And, third, how can revenue be increased?
Nepal Rastra Bank's data for the first 10 months of the current fiscal year shows that actual expenditure is 60 percent of the estimated amount (Rs 168,995.6 million), while revenue mobilization is 76 percent of the target (Rs 103,667.3 million). It seems very likely that both the expenditure and revenue collection targets will be met. The estimated expenditure for next year will have to be certainly higher, say around Rs 200 billion, representing an increase of 18.3 percent over this year's estimate.
As inflation is estimated to be around 8 percent, the real increase will be 10 percent. The government should contain current expenditure at the present level allowing for inflation and increase the share of capital expenditure. In the last five years, capital expenditure amounted to 26 to 27 percent of total expenditure. This is just the reverse of what prevailed during the years 1975 to 1994 when the share of capital expenditure ranged between 63 to 71 percent.
The high share of current expenditure in total expenditure witnessed during the last one and a half decades has been largely due to the unnecessary expansion of the state machinery by successive governments to serve the political interests of the party in power. One can see how the staff are only partially employed at almost all the government offices. Therefore, there is a need to restructure administration to make it more effective and accountable. Unjustifiable current expenses also need to be eliminated. This will result in significant savings that could be used to meet obligations warranted by circumstances.
The allocation of capital expenditure should be done in such a way so as to maintain the growth momentum witnessed in the current year. In the course of maintaining the growth momentum, the focus should be on inclusive growth, which means concentrating on agriculture. Farming, the mainstay of 85 percent of the country's population, has been lagging behind with a nominal growth rate of 0.7 percent in 2007 and 1.1 percent in the preceding year.
The agricultural sector needs to be transformed by steering it towards greater commercialization and gradual substitution of integrated farming by enterprises specialized in crops, vegetables, horticulture, livestock and poultry. This requires development of fodder markets, effective delivery of agricultural and veterinary services to the farms and sustained investments in rural markets, transportation and communication. Moreover, crop and livestock insurance has to be provided, and floor prices and minimum wages have to be fixed.
Commercialized farming and specialized enterprises can be best achieved through producers' cooperatives. Although such organizations have proliferated, there is no vision and perspective of cooperative development. Therefore, specific policies are required to develop a new generation of cooperatives to have an impact on the agricultural sector. Such cooperatives should be able to face market competition with vertical integration and coordination as is prevalent in India, the US and Canada. Other sectors that should receive due attention in the budget are the social sector and the needs of underprivileged communities and victims of the people's movement.
With respect to industry, the strategy should be to promote public-private partnership by developing viable mechanisms and easing infrastructural and policy bottlenecks. There is a need to bring a new industrial policy to encourage the growth of export industries and discourage the rampant tendency of holding licenses - particularly for micro-hydro, mining, forestry and trading - instead of executing the projects within the stipulated time.
On the revenue front, there is plenty scope for mobilizing additional resources by enhancing tax compliance, expanding the tax base (i.e., urban property tax) and enforcing VAT. A modern computerized information system and simplified procedures will help improve tax compliance considerably. Local authorities need to be motivated to explore and tap potential revenue sources within their jurisdiction. And, of course, malpractices and corruption by tax collectors should be stopped. They siphon off a significant amount of money that would otherwise go into the state treasury.
NOC warns of worsening fuel supply
NOC warns of worsening fuel supply
ekantipur, 7-Jul-08
The Nepal Oil Corporation (NOC) has warned that the long running fuel supply shortage can become worse as there is no concrete plan to address NOC's deepening financial crisis due to soaring global oil prices.
NOC officials told the Post that the supply situation has become more vulnerable as the corporation eyes losses of about Rs 1.30 billion for the month of July.
“The Indian supplier passed on the international crude prices of US$137 a barrel to Nepal in July 1. While this has further widened our financial gap, things could go really bad later this month,” a senior NOC official told the Post.
The state-owned petroleum import monopolist rang warning bells, as it has anticipated the Indian Oil Corporation (IOC) to pass on the international price of about US$ 145 per barrel to Nepal in mid-July.
Once that is incorporated into the domestic price structure, the retail prices of petrol and diesel would touch Rs 105 per liter each, kerosene will go up to Rs 95 a liter and liquefied petroleum gas (LPG) to Rs 1,600 a cylinder.
“That will widen NOC's losses to Rs 2 billion a month straight away,” said the source, elaborating that the corporation could fail to import even the existing volume of petroleum products from later this month.
The corporation is already importing less than half of the normal national requirement at present, which has left a majority of petrol pumps to be empty and made consumers queue for hours for a few liters.
Senior officials at the Supplies Ministry further said that the government was planning to release a fresh Rs 500 million to the ailing corporation within the next few days to step up its imports.
“However, we don't have a solid vision from the political leadership over how to balance the rising global oil prices with the increasing pressure to provide relief to the people,” said the official.
Meanwhile, NOC Monday instructed petroleum dealers to retail petroleum products at the government's fixed prices, which are slightly lower than that tabled by the Nepal Petroleum Dealers' Association (NPDA).
Issuing a letter to the dealers, the corporation even warned them of stringent actions if they failed to comply with its directives. “We will go to the extent of suspending operating licenses,” said the official.
If the dealers complied, the prices of petrol, diesel and kerosene would go down by about 75 paisa each from the existing retail prices. However, NPDA has so far refused to operate at the government's rates, saying that it would not generate enough returns to the dealers.
ekantipur, 7-Jul-08
The Nepal Oil Corporation (NOC) has warned that the long running fuel supply shortage can become worse as there is no concrete plan to address NOC's deepening financial crisis due to soaring global oil prices.
NOC officials told the Post that the supply situation has become more vulnerable as the corporation eyes losses of about Rs 1.30 billion for the month of July.
“The Indian supplier passed on the international crude prices of US$137 a barrel to Nepal in July 1. While this has further widened our financial gap, things could go really bad later this month,” a senior NOC official told the Post.
The state-owned petroleum import monopolist rang warning bells, as it has anticipated the Indian Oil Corporation (IOC) to pass on the international price of about US$ 145 per barrel to Nepal in mid-July.
Once that is incorporated into the domestic price structure, the retail prices of petrol and diesel would touch Rs 105 per liter each, kerosene will go up to Rs 95 a liter and liquefied petroleum gas (LPG) to Rs 1,600 a cylinder.
“That will widen NOC's losses to Rs 2 billion a month straight away,” said the source, elaborating that the corporation could fail to import even the existing volume of petroleum products from later this month.
The corporation is already importing less than half of the normal national requirement at present, which has left a majority of petrol pumps to be empty and made consumers queue for hours for a few liters.
Senior officials at the Supplies Ministry further said that the government was planning to release a fresh Rs 500 million to the ailing corporation within the next few days to step up its imports.
“However, we don't have a solid vision from the political leadership over how to balance the rising global oil prices with the increasing pressure to provide relief to the people,” said the official.
Meanwhile, NOC Monday instructed petroleum dealers to retail petroleum products at the government's fixed prices, which are slightly lower than that tabled by the Nepal Petroleum Dealers' Association (NPDA).
Issuing a letter to the dealers, the corporation even warned them of stringent actions if they failed to comply with its directives. “We will go to the extent of suspending operating licenses,” said the official.
If the dealers complied, the prices of petrol, diesel and kerosene would go down by about 75 paisa each from the existing retail prices. However, NPDA has so far refused to operate at the government's rates, saying that it would not generate enough returns to the dealers.
Roundup of Economic & Business News (Jun 1 - Jun 30)
Jun 1
Autorickshaw rally to promote tourism (ekantipur)
Prices skyrocket despite road access (ekantipur)
Cement price drops by 10pc (ArthaExpress)
Jun 2
Khimti resumes operation (ekantipur)
Monthly oil loss to jump to Rs 2.70b (ekantipur)
NMB Bank becomes full-fledged (ekantipur)
Tourist arrivals continue to decline (ekantipur)
Construction on Bio-trail begins in Mechi (Nepalnews)
Jun 3
FLSC resumes tax collection (ekantipur)
Upper Tamakoshi access road construction delayed (ekantipur)
Fulbari Hotel loan rescheduled (ekantipur)
New action plan proposed to cut jobless rate (ekantipur)
Jun 4
Aviation fuel up 12pc (ekantipur)
Power cut now 5 hrs a week (ekantipur)
Indian railway to extend up to Biratnagar: Lalu (ekantipur)
GDP to grow by 4pc, inflation at 8.9pc (ekantipur)
RBB announces voluntary retirement scheme (ekantipur)
NOC Cuts Fuel Supply to Pokhara by Half (ArthaExpress)
NAC to share ground handling charge with CAAN (ArthaExpress)
Jun 5
EC to give $100m for education sector (ekantipur)
Field study for Arun III begins (ekantipur)
Grocery prices rising despite plentiful supply (ekantipur)
EBL reports 52pc rise in profits (ekantipur)
Budget deficit continues to increase (Nepalnews)
Comen starts copper, zinc futures (ArthaExpress)
Jun 6
Airfares to go up (ekantipur)
Transporters up in arms over measly fuel quota (ekantipur)
Field study for Arun III begins (ArthaExpress)
Still hand to mouth: Farmers see little benefit from food price rises (NepaliTimes)
Peacetime in a war zone: War over, development hopes run high in the Maoist heartland (NepaliTimes)
Jun 7
LURE OF FOREIGN EMPLOYMENT: Women leaving for riskier jobs abroad (ekantipur)
Bird flu, soaring cost of production threaten poultry farming (ekantipur)
Book review : Investors’ handbook (ArthaExpress)
Jun 8
Agriculture growth 14 yr high; Nepal’s per capita is $470 (ekantipur)
National Advertising Policy sought (ArthaExpress)
Tourists arrival in Tatopani decreases (ArthaExpress)
PWR needs popularisation (ArthaExpress)
Jun 9
Bishnumati corridor to be complete within a month (ekantipur)
Qatar is destination of first choice for Nepali workers (ekantipur)
FNCCI for fuel price hike (Nepalnews)
Price of fuel hiked (Nepalnews)
NAC turns 50, staff not keen to celebrate (ArthaExpress)
Jun 10
Transporters hike fares up to 40 pc (ekantipur)
NEA, Bhotekoshi dispute resolved (ekantipur)
Gasoline shortage boon for some! (ekantipur)
'Cooking with electricity cheaper than fossil fuel' (ekantipur)
Link veggie, fruit production with industries (ekantipur)
Oil dealers bring out their own price list (ekantipur)
Dispute in tea estate (ArthaExpress)
Jun 11
Gyanendra abandons Narayanhiti (ekantipur)
Opportunities galore for retail share investors (ekantipur)
Agriculture production increases: Report (Nepalnews)
Govt says transport fare hike not acceptable (Nepalnews)
Jun 12
Balefi hydel set to take off (ekantipur)
Freefall of garment export to US continues (ekantipur)
Nepal starts exporting eggs (ArthaExpress)
Jun 13
Tourism rebounds, 5-star hotel bookings up (ekantipur)
Foreign trade crosses Rs 200b (ekantipur)
FNCCI presents 20-year vision for economic revolution (ekantipur)
Extreme leftist groups pushing country into a brink: Finance Minister (Nepalnews)
Jun 14
Ambeshwor to survey 100 MW Kali Gandaki Koban (ekantipur)
Special security arrangements in Sunsari-Morang corridor (ekantipur)
Cooking gas becomes costlier (Nepalnews)
Jun 15
Dream run at stock market (Nepalnews)
Widen tax net, suggests Joshi (ArthaExpress)
Jun 16
25 to 35 pc transport fare hikes mooted (ekantipur)
NOC-dealers dispute induces new fuel shortage (ekantipur)
Unpaid BSP workers protest (ekantipur)
Sebon alerts issue, sales managers (ArthaExpress)
Jun 17
Govt inaction puts mutual funds in limbo (ekantipur)
Budget demands by ministries touch Rs 240b (ekantipur)
Worst is over: NAC’s technocrat MD (ArthaExpress)
Jun 18
Ticket prices head skyward as airlines raise fuel surcharge (ekantipur)
Employment agents demand equal opportunity (ekantipur)
NEA losses mount to Rs 270 million (ArthaExpress)
Jun 19
Severe food insecurity in 9 districts (ekantipur)
Fuel shortage resurfaces (ekantipur)
Galileo Nepal first to issue e-ticket (ArthaExpress)
Jun 20
Committee to study 600MW Budhigandaki (ekantipur)
22 manpower agencies sealed (ekantipur)
Govt losing Rs 1.5m in revenue every day (ekantipur)
Govt authorises transporters to raise fare by 25 percent (Nepalnews)
Nepal's silent food emergency (NepaliTimes)
Food crisis epicentre (NepaliTimes)
Jun 21
UK to provide Rs 3.74b assistance (ekantipur)
20 sign job contracts with Korean firms (ekantipur)
Jun 22
‘List of property inside Narayanhiti not satisfactory’ (ekantipur)
SCB to play constructive role for New Nepal (ekantipur)
Make remittances productive (ekantipur)
Short-term interest rates up (ArthaExpress)
Transport strike affects Gandaki, Dhaulagiri zones (ArthaExpress)
Jun 23
Transport strike hobbles nation (ekantipur)
Students win 45 pc discount on fares (ekantipur)
Time running out for annual policy, program (ekantipur)
No end in sight to fuel shortage (ekantipur)
‘Social security package will ensure good labor relations’ (ekantipur)
Betel nut import up (ArthaExpress)
Mango production decreases (ArthaExpress)
Jun 24
NEPSE becomes 'for-profit' company (ekantipur)
Rs 37.5m NDM winners announced (ekantipur)
Clean Energy receives share applications worth Rs 3b (ekantipur)
Strike, fuel shortage affecting food delivery: WFP (Nepalnews)
Tourists stay brief in Bhaktapur: Survey (ArthaExpress)
Jun 25
Water sector corruption a threat to development: TI (ekantipur)
New fares for public transport (ekantipur)
Airlines hike fuel surcharge (ekantipur)
Fuel dealers walk out of talks (ekantipur)
Transport strike ends; govt agrees to let the fare increase by 28 pc (Nepalnews)
Jun 26
Yet another banda hits valley (ekantipur)
Inflation close to double digits (ekantipur)
Sunrise Bank opens Gabahal branch (ekantipur)
22.44pc rise in overseas job seekers (ekantipur)
Jun 27
Gyanendra gone, other ‘kings’ still on allowances (ekantipur)
Revenues increase 26pc, expenditures up 20pc (ekantipur)
Few stockbrokers delaying business at NEPSE (ekantipur)
‘Keep pegged exchange rate to check inflation’ (ekantipur)
A Kathmanduite Uses Only 20 ltr of Water a Day: Study (ArthaExpress)
BUDGET 2008: If you plan for the worst, then you do well if things get better. (NepaliTimes)
Jun 28
Mechi farmers compelled to use low quality fertilizers (ekantipur)
Diesel shortage delays paddy cultivation (ekantipur)
Bheri truckers to scrap syndicate (ekantipur)
Catfish farming catching on in Kaski (ArthaExpress)
Jun 29
Guthi land encroachment threat to culture (ekantipur)
‘Alternative modes of water supply to urban poor’ (ekantipur)
FlyYeti suspends Nepal operation (ekantipur)
NTB-led Sales Mission visits US (Nepalnews)
Jun 30
YCL obstructs tender process (ekantipur)
KMC doctors’ strike leaves patients in lurch (ekantipur)
Lack of skills limits Nepali workers’ overseas prospects (ekantipur)
DNYA urges transparency in expenses of NGOs and INGOs (Nepalnews)
Autorickshaw rally to promote tourism (ekantipur)
Prices skyrocket despite road access (ekantipur)
Cement price drops by 10pc (ArthaExpress)
Jun 2
Khimti resumes operation (ekantipur)
Monthly oil loss to jump to Rs 2.70b (ekantipur)
NMB Bank becomes full-fledged (ekantipur)
Tourist arrivals continue to decline (ekantipur)
Construction on Bio-trail begins in Mechi (Nepalnews)
Jun 3
FLSC resumes tax collection (ekantipur)
Upper Tamakoshi access road construction delayed (ekantipur)
Fulbari Hotel loan rescheduled (ekantipur)
New action plan proposed to cut jobless rate (ekantipur)
Jun 4
Aviation fuel up 12pc (ekantipur)
Power cut now 5 hrs a week (ekantipur)
Indian railway to extend up to Biratnagar: Lalu (ekantipur)
GDP to grow by 4pc, inflation at 8.9pc (ekantipur)
RBB announces voluntary retirement scheme (ekantipur)
NOC Cuts Fuel Supply to Pokhara by Half (ArthaExpress)
NAC to share ground handling charge with CAAN (ArthaExpress)
Jun 5
EC to give $100m for education sector (ekantipur)
Field study for Arun III begins (ekantipur)
Grocery prices rising despite plentiful supply (ekantipur)
EBL reports 52pc rise in profits (ekantipur)
Budget deficit continues to increase (Nepalnews)
Comen starts copper, zinc futures (ArthaExpress)
Jun 6
Airfares to go up (ekantipur)
Transporters up in arms over measly fuel quota (ekantipur)
Field study for Arun III begins (ArthaExpress)
Still hand to mouth: Farmers see little benefit from food price rises (NepaliTimes)
Peacetime in a war zone: War over, development hopes run high in the Maoist heartland (NepaliTimes)
Jun 7
LURE OF FOREIGN EMPLOYMENT: Women leaving for riskier jobs abroad (ekantipur)
Bird flu, soaring cost of production threaten poultry farming (ekantipur)
Book review : Investors’ handbook (ArthaExpress)
Jun 8
Agriculture growth 14 yr high; Nepal’s per capita is $470 (ekantipur)
National Advertising Policy sought (ArthaExpress)
Tourists arrival in Tatopani decreases (ArthaExpress)
PWR needs popularisation (ArthaExpress)
Jun 9
Bishnumati corridor to be complete within a month (ekantipur)
Qatar is destination of first choice for Nepali workers (ekantipur)
FNCCI for fuel price hike (Nepalnews)
Price of fuel hiked (Nepalnews)
NAC turns 50, staff not keen to celebrate (ArthaExpress)
Jun 10
Transporters hike fares up to 40 pc (ekantipur)
NEA, Bhotekoshi dispute resolved (ekantipur)
Gasoline shortage boon for some! (ekantipur)
'Cooking with electricity cheaper than fossil fuel' (ekantipur)
Link veggie, fruit production with industries (ekantipur)
Oil dealers bring out their own price list (ekantipur)
Dispute in tea estate (ArthaExpress)
Jun 11
Gyanendra abandons Narayanhiti (ekantipur)
Opportunities galore for retail share investors (ekantipur)
Agriculture production increases: Report (Nepalnews)
Govt says transport fare hike not acceptable (Nepalnews)
Jun 12
Balefi hydel set to take off (ekantipur)
Freefall of garment export to US continues (ekantipur)
Nepal starts exporting eggs (ArthaExpress)
Jun 13
Tourism rebounds, 5-star hotel bookings up (ekantipur)
Foreign trade crosses Rs 200b (ekantipur)
FNCCI presents 20-year vision for economic revolution (ekantipur)
Extreme leftist groups pushing country into a brink: Finance Minister (Nepalnews)
Jun 14
Ambeshwor to survey 100 MW Kali Gandaki Koban (ekantipur)
Special security arrangements in Sunsari-Morang corridor (ekantipur)
Cooking gas becomes costlier (Nepalnews)
Jun 15
Dream run at stock market (Nepalnews)
Widen tax net, suggests Joshi (ArthaExpress)
Jun 16
25 to 35 pc transport fare hikes mooted (ekantipur)
NOC-dealers dispute induces new fuel shortage (ekantipur)
Unpaid BSP workers protest (ekantipur)
Sebon alerts issue, sales managers (ArthaExpress)
Jun 17
Govt inaction puts mutual funds in limbo (ekantipur)
Budget demands by ministries touch Rs 240b (ekantipur)
Worst is over: NAC’s technocrat MD (ArthaExpress)
Jun 18
Ticket prices head skyward as airlines raise fuel surcharge (ekantipur)
Employment agents demand equal opportunity (ekantipur)
NEA losses mount to Rs 270 million (ArthaExpress)
Jun 19
Severe food insecurity in 9 districts (ekantipur)
Fuel shortage resurfaces (ekantipur)
Galileo Nepal first to issue e-ticket (ArthaExpress)
Jun 20
Committee to study 600MW Budhigandaki (ekantipur)
22 manpower agencies sealed (ekantipur)
Govt losing Rs 1.5m in revenue every day (ekantipur)
Govt authorises transporters to raise fare by 25 percent (Nepalnews)
Nepal's silent food emergency (NepaliTimes)
Food crisis epicentre (NepaliTimes)
Jun 21
UK to provide Rs 3.74b assistance (ekantipur)
20 sign job contracts with Korean firms (ekantipur)
Jun 22
‘List of property inside Narayanhiti not satisfactory’ (ekantipur)
SCB to play constructive role for New Nepal (ekantipur)
Make remittances productive (ekantipur)
Short-term interest rates up (ArthaExpress)
Transport strike affects Gandaki, Dhaulagiri zones (ArthaExpress)
Jun 23
Transport strike hobbles nation (ekantipur)
Students win 45 pc discount on fares (ekantipur)
Time running out for annual policy, program (ekantipur)
No end in sight to fuel shortage (ekantipur)
‘Social security package will ensure good labor relations’ (ekantipur)
Betel nut import up (ArthaExpress)
Mango production decreases (ArthaExpress)
Jun 24
NEPSE becomes 'for-profit' company (ekantipur)
Rs 37.5m NDM winners announced (ekantipur)
Clean Energy receives share applications worth Rs 3b (ekantipur)
Strike, fuel shortage affecting food delivery: WFP (Nepalnews)
Tourists stay brief in Bhaktapur: Survey (ArthaExpress)
Jun 25
Water sector corruption a threat to development: TI (ekantipur)
New fares for public transport (ekantipur)
Airlines hike fuel surcharge (ekantipur)
Fuel dealers walk out of talks (ekantipur)
Transport strike ends; govt agrees to let the fare increase by 28 pc (Nepalnews)
Jun 26
Yet another banda hits valley (ekantipur)
Inflation close to double digits (ekantipur)
Sunrise Bank opens Gabahal branch (ekantipur)
22.44pc rise in overseas job seekers (ekantipur)
Jun 27
Gyanendra gone, other ‘kings’ still on allowances (ekantipur)
Revenues increase 26pc, expenditures up 20pc (ekantipur)
Few stockbrokers delaying business at NEPSE (ekantipur)
‘Keep pegged exchange rate to check inflation’ (ekantipur)
A Kathmanduite Uses Only 20 ltr of Water a Day: Study (ArthaExpress)
BUDGET 2008: If you plan for the worst, then you do well if things get better. (NepaliTimes)
Jun 28
Mechi farmers compelled to use low quality fertilizers (ekantipur)
Diesel shortage delays paddy cultivation (ekantipur)
Bheri truckers to scrap syndicate (ekantipur)
Catfish farming catching on in Kaski (ArthaExpress)
Jun 29
Guthi land encroachment threat to culture (ekantipur)
‘Alternative modes of water supply to urban poor’ (ekantipur)
FlyYeti suspends Nepal operation (ekantipur)
NTB-led Sales Mission visits US (Nepalnews)
Jun 30
YCL obstructs tender process (ekantipur)
KMC doctors’ strike leaves patients in lurch (ekantipur)
Lack of skills limits Nepali workers’ overseas prospects (ekantipur)
DNYA urges transparency in expenses of NGOs and INGOs (Nepalnews)
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