Global tinderbox

Global tinderbox
Economist, 28-Dec-09

2010 could be a year that sparks unrest

IF THE world appears to have escaped relatively unscathed by social unrest in 2009, despite suffering the worst recession since the 1930s, it might just prove the lull before the storm. Despite a tentative global recovery, for many people around the world economic and social conditions will continue to deteriorate in 2010. An estimated 60m people worldwide will lose their jobs. Poverty rates will continue to rise, with 200m people at risk of joining the ranks of those living on less than $2 a day. But poverty alone does not spark unrest—exaggerated income inequalities, poor governance, lack of social provision and ethnic tensions are all elements of the brew that foments unrest.

Loadsheding 51 hours a week; 12 hours a day likely from next month

Loadsheding 51 hours a week; 12 hours a day likely from next month
Nepalnews, 30-Dec-09

Nepal Electricity Authority (NEA) has increased the load shedding hours to 51 hours a week starting today.

NEA will cut power in all areas in rotation for seven hours a day for five days and eight hours a day for two days in two slots everyday.

According to chief of NEA's load dispatch centre Sher Singh Bhat, the load shedding hours were increased as the electricity production is decreasing, while the production is falling.

NEA had been cutting power only in the mornings and afternoons so far. From today, it will also cut power in the afternoons.

With the advent of dry season, the water level in the rivers has gone down affecting electricity production. All the hydro-power plants in Nepal except Kulekhani and Mid-Marsyangdi are based on run-off-the-river system.

According to NEA, the demand for electricity across the nation at peak hours is 845 MW, while the supply is only 450 MW.

Going by the current trend, outage timing is expected to rise to 12 hours a day starting as early as January.

Although, NEA and energy ministry officials had been touting the loadsheding hours this year would be limited to 10 hours a day, it is likely power will be cut for as long as 18 hours a day in the driest season, like last year.

The forecast of NEA officials, who had been banking on India to rescue Nepal from its power crisis, failed as India agreed to supply much less power than expected by the Nepali officials.

Chinese company agrees to invest 51 percent in West Seti Hydro-project

Chinese company agrees to invest 51 percent in West Seti Hydro-project
Nepalnews, 28-Dec-09

A Chinese government venture, China National Machinery Import and Export Company, has agreed to invest 51 per cent share in West Seti Hydro-project.

Director of West Seti Hydro-project Himalaya Pande told journalists in Kathmandu over a video conference Monday evening that he signed an agreement to this effect with president of the Chinese company Jia Zhiqiane this afternoon.

The agreement was signed in presence of Prime Minister Madhav Kumar Nepal, energy minister Prakash Sharan Mahat and foreign minister Sujata Koirala in Beijing.

After assurance of investment PM Nepal has directed energy minister Mahat to extend the license period of the project by one year. The license of West Seti Hydro-project was due to expire on December 31, this year.

The project is being constructed under an export plan where 90 percent of the production will be exported to India.

Ten percent of the production will be provided to Nepal for free for 30 years, and the entire project will be handed over to Nepal after that.

With the latest arrangement, the 750 MW West-Seti Hydro-project can go ahead without the investment of Asian Development Bank (ADB), which was considered one of the major investors for the project before this.

The estimated cost of the project is USD 1600 million. ABD had earlier showed interest for 15 percent share in the project beside loan to Nepal government for another 15 percent share. Australian company SMEC is another chief investor for the project.

Is the banking crisis (in Nepal) real?

Is the banking crisis real?
Myrepublica, 27-Dec-09
DR RAGHAB D PANT

With the publication of Current Macroeconomic Situation by the Nepal Rastra Bank recently, based on data of the first three months of the current fiscal year, there have been discussions among the public and in the media arguing that the economy has been hit by three problems at the same speed. They are: (i) the problem in the banking sector due to concentration of its loan – 60.9 percent (or Rs 263 billion, which is equivalent to 30 percent of gross domestic product) of the outstanding loan to be precise – with the security of land and buildings; (ii) decline in the growth of inflow of remittances; and (iii) deficit in the balance of payments totaling Rs 19 billion in the first three months of the current fiscal year. In the first three months of the last fiscal year, the country had experienced a surplus of 8 billion in its balance of payments.

The first problem, however, is not new: It was there and published for public information in the monthly report of the Nepal Rastra Bank. In August, 2009, for example, the total loan with the security of land and buildings was also precisely 60.9 percent of the total and almost the same in September, 2008 (Nepal Rastra Bank, Current Macroeconomic Situation, Monthly Reports, various issues). So, it was a normal affair—though the way we Nepalis used to run the banking system, it was sure to hit the tsunami soon.

Suddenly, in a few newspapers on Dec 17, there was news that the economy is in the midst of serious problems supported by the statement of the Secretary of Finance. According to the Finance Secretary, the decline in the growth rate of remittances and increase in the trade deficit due to rise in import and decline in export were the main reasons of the problem and “ if we did not attempt to reduce import soon, the exchange rate of Nepali currency vis-à-vis Indian currency need to be depreciated.” (Nagarik, Dec 17).

I am perhaps naive, but how can we reduce import when the growth in real income – popularly known as gross domestic product (GDP) at constant prices – is substantially lower than the growth in nominal income? This means that trade deficit will continue to grow as long as there is high receipts from remittances and slow growth in GDP.

In Nepal, the receipts from remittances have been the single most important factor determining the level and direction of economic activities of the country, both at the micro and macro levels. A marginal instability in this source will disturb the foundation of the economy and is expected to be more dangerous than the current political problem.

The foreign exchange reserve of the banking system has been increasing due to rising receipts from remittances and this source has helped the individual family to increase its consumption in excess of the rise in income from domestic source. The import, however, has to go up to meet the increase in national consumption at a rate higher than the growth in real income. This has led to the deterioration in the foreign trade balance of the country but, at the same time, it has been instrumental for the increase in government revenue due to rising receipts from import duties.

As far as the exchange rate is concerned, it is also an old problem. We have been writing since the past several years about the need to depreciate the exchange rate of Nepali currency vis-à-vis Indian currency due to several reasons, including (i) rising deficit in merchandise trade account and , presumably, (ii) capital flight due partly to political disturbances and due partly to difference in the productivity of capital between the two countries (For details, see Exchange Rate Management: The Emerging Problem and the Options, The Himalayan Times, June 2, 2008).

Against this background, I don’t see any new problem emerging; it is the continuation of the same old problem except that the government is not yet ready to change the exchange rate of the Nepali currency. On the contrary, they are trying to find a way to impose some restrictions on the import of goods and services from India to maintain current exchange rate. In fact, the central bank, according to newspaper reports, has already issued several directives to the commercial banks to impose restrictions on financial transaction with India. (The Kathmandu Post, Dec 18) Otherwise, it is not a new problem and the Ministry of Finance is well aware of the situation of the banking system as it has representation in the Board of Directors of the Nepal Rastra Bank too. So the main question is: What were the members of Board of Directors of the Nepal Rastra Bank doing when the country was certain to hit the iceberg?

The problem does not look so serious in the short run but overtime it may get worse. The foreign exchange reserve of the monetary authorities, for example, was sufficient for more than 10 months of import in October, 2008, but declined to reach 8.5 months of import in October, 2009, due partly to the continuous increase in import and due partly to the decline in the foreign exchange reserve in the current fiscal year. The most important factor, however, was the maintenance of unrealistic exchange rate. Again, the government is determined to maintain the same exchange rate that was in use, to the best of my knowledge, in the Panchayat period.

For the general public, myself included, the critical issue is the loan against the security of land and buildings which, as indicated earlier, is 60 percent of the total since the past several years. Now, for the commercial banks, the central bank has capped the investment limit for the realty sector at 40 percent of the total loan portfolio by 2012/13 informing the public at the same time that only two banks out of 27 banks have crossed the 40 percent exposure limit (Republica, Dec 19). It looks somewhat strange. Firstly, if only two banks have crossed the exposure limit, why such a big issue? Secondly, how did Nepal Rastra Bank calculate the loan to the so-called realty sector as the information made available to the general public shows the concentration of loan of the banking system against the security of land and buildings to 60 percent of the total. (Monthly Economic Report of the Nepal Rastra Bank, various issues) It appears that the officials of the Ministry of Finance and the central bank have unnecessarily magnified the problem, and still no new measures, except those designed to maintain the current exchange rate, have been undertaken.

The financial problems, by nature, can deteriorate at a rapid rate as the current experiences of the developed countries and that of East Asian countries in the nineties suggest. In Nepal’s case, when the situation gets worse, the concerned ministers may use the occasion for world tours in the name of looking for foreign employment for our young boys. International migration, however, cannot solve domestic problems, and a paper by the staff of the International Monetary Fund as early as 2006 shows that remittances cannot be , and never have been, used as substitute for capital flows or foreign investment. Now is the time to change the direction of the economy with priority on domestic employment and production rather than on foreign employment and remittances. The central bank should start lending a hand to job creation.

The political parties have not yet felt the need to take initiative in the area of economic management. Let us hope that they will change the direction soon. If the politicians refuse to learn from the history of the present crisis, to reuse the term once made popular by Paul Krugman, they will condemn all of us to repeat it

Malaysia shuts door for Nepali security guards

Malaysia shuts door for Nepali security guards
Myrepublica, 23-Dec-09
PRABHAKAR GHIMIRE

The Malaysian government has decided to replace Nepali security guards, following immense pressure from local organizations. Nepali security guards were under the top priority of Malaysian firms since the last two years.

The recent move of the Malaysian government means there will only be a slim chance for Nepali security guards to get job opportunity in the booming South East Asian nation on the back of low demands due to global financial meltdown.

Kumud Khanal, coordinator of Nepali manpower agencies sending workers to Malaysia, said over 10,000 aspirants, who were making final preparation to work as security guard in Malaysia, will be affected by the decision. Khanal said 70,000 Nepali workers are working as security guards in Malaysia -- the second largest job market for Nepal after Saudi Arabia.

“The fresh move of the Malaysian government will affect over 10,000 Nepali workers, who had been preparing to leave for Malaysia. Furthermore, there will be no extension of three-year working period of existing security guards,” Khanal said. Khanal´s agency alone was preparing to send some 5,000 security guards to Malaysia.

Khanal said involvement of Nepali security guards in criminal activities, low English language skills and the trend of sending youths having no police and military service background were the major reasons that prompted the Malaysian government to take the decision.

Malaysia´s Barnama this week stated that local security service agencies have agreed to recruit members of Civil Defense Department (JPAM) and People´s Volunteer Crops (Rela) in place of foreign security guards, particularly those from Nepal.

“As JPAM and Rela have trained volunteers, there was no reason for the country to rely on foreign security guards, especially those from Nepal,” the news agency quoted Director-General of JPAM, Datuk Abdul Halim Abdul Hamid, as saying. "We held several discussions and meetings with the Security Services Association of Malaysia. At the end of the talks, they (association) agreed to take JPAM and Rela members as security guards."

Speaking to mediapersons, secretary general at Malaysian Home Ministry Datuk Seri Mahmood Adam proposed to use over a million JPAM and Rela members to replace foreign security guards. Adam also said replacement of foreign security guard would be expanded nationwide, according to the agency.

According to the news reports, JPAM currently has about 80,000 members which will increase to 100,000 by the year-end. Rela has over one million trained workers and the number is expected to reach 2.5 million by the end of next year. JPAM and Rela leaders have also assured that the recruiting companies need not give intensive training to their members.

Responding to rising unemployment, Malaysia has been closing fresh recruitments in service and manufacturing sector - two major sectors hit hard by the global financial meltdown.

Tilak Ranabhat, president of Nepal Association of Foreign Employment Agents (NAFEA), said the Malaysian government took the decision to replace foreign workers, especially Nepalis, with local youths, bowing to pressure from local organizations. Ranabhat, who is also involved in sending Nepalis to Malaysia, said a Nepali guard can earn at least Rs 30,000 per month in Malaysia.

According to Department of Foreign Employment, a total 20,619 Nepalis left for Malaysia during the first four months of current fiscal year, down from 21,593 recorded during the same period last year.

Foreign employment on the rise

Foreign employment on the rise
Nepalnews, 22-Dec-09

The number of Nepalis flying abroad for employment has surged in the last one month.

This upward spiral can be ascribed to rising demand of Nepali workers in countries like Malaysia, Saudi Arabia and Qatar.

According to Department of Foreign Employment (DoFE), 17,434 Nepalis left the country for different destinations from mid-November to mid-December, a 17.18 percent increase compared to 14,877 job seekers leaving during mid-October to mid-November.

Last year during mid-November to mid-December, 14,200 Nepalis had left the country seeking employment in various countries.

Number of individuals leaving for Malaysia was 7,646 while 5,218 flew to Saudi Arabia and 2,510 to Qatar.

From mid-October to mid-November, 6,335 Nepalis flew to Malaysia, 2,293 to Qatar and 3,630 to Saudi Arabia.

According to the DoFE, number of individuals leaving for work through their own contacts also has soared. During mid-November to mid- December, a total of 7,171 individuals including 1,029 female workers migrated to 35 countries. The number of women leaving for work through personal contacts was 696 during mid-October to mid-November.

However, the number of females leaving through agencies has decreased to 352 from 425 in mid-October to mid-November period.

The decrease is attributed to the ban imposed by Lebanon for domestic workers and Israel, one of the most lucrative destinations for Nepali female workers, delaying to re-open its door for migrant workers.

BOP Crisis: Dire problem, few options

BOP Crisis: Dire problem, few options
Myrepublica, 21-Dec-09
By PREM KHANAL

[NOTE: NepaliEconomy.com disagrees with the author's arguments. Please read the comment at the end of the post]

The impact of deepest slump in the global economy since World War II to Nepal´s economy was far less calamitous than many had feared.

However, emerging indicators in the domestic front have deepened fears that the aftermath of the global financial crisis will be more dangerous than many expect, as the country faces the worst-ever Balance of Payment (BOP) deficit.

Worrisome is the fact that the unexpected decline in the growth rate of remittance -- country´s economic backbone, which many believe as the time-lag effect of global crisis -- has pushed the economy on the brink, with no immediate sight of stabilization.

Not that all these cracks in the economy appeared all of a sudden. There were enough warnings, overheated consumption to be the main. When annual date was released in July, government experts, at least the central bank, could have easily sensed the looming crisis when national disposable income recorded an alarming increment of over Rs 200 billion in a year to touch Rs 1,193 billion last year.

Wasn´t it predictable that the economy was about to see a huge misbalance in foreign trade when consumption reached 92 percent of GDP last year while domestic production continued to shrink and exports remained stagnant? However, the authority concerned blissfully ignored such warnings.

Though it is too early to gauge the gravity of the BOP crisis and jump into a pessimistic conclusion, worst is that Nepal has too little things in hand to correct it.

Worsening foreign trade balance needs to be blamed first for the crisis. Country´s trade deficit -- that grew by a whopping 47.6 percent during the first quarter of the current fiscal compared to same period last year -- was one of the principal causes for the over three-fold increment in BOP deficit in a year. In theory, a country needs to boost export and curb imports to check the widening trade deficit.

Grim exports data of the country itself speaks volumes about intensity of the crisis. Nepal´s persistent problem is that any attempt to boost exports is constrained by lack of products that can compete in the foreign market. Even some past efforts to find new exportable commodities capable of competing with Chinese products in global market failed.

However, Nepal can at least make renewed efforts to breathe a new lease of life to dying traditional twin export pillars -- woolen carpets and readymade garments. The government can restart a fresh diplomatic effort to secure the US and European markets to revive these two commodities. It can think of providing a short-term subsidy for sheep farming in Nepal´s mountainous region to alter long-running dependency on expensive imported wool to make our woolen carpet competitive in the global market.

Checking imports by raising taxes or imposing additional duties can be one option to curtail consumption. But, such a step will fuel the already high inflation and will also hurt domestic demand that can ultimately add woes to long-running economic sluggishness.

Still tourism is one sector where we have a clear and undisputed advantage and it is the only sector that has the potential to correct BOP misbalance. But, current political landscape is less hospitable to promote the sector, as the political turmoil seems deepening rather than moving toward settlement.

Promoting Foreign Direct Investment (FDI) is one of the powerful and widely used instruments to make financial account, which witnessed an alarming 118 percent decline during the first quarter, surplus. However, Nepal can expect no FDI as long as the activities of militant trade union are not brought under control and labor laws are made flexible to balance the interests of both employers and employees.

Make no mistake, the BOP crisis is just a flicker for now. The divesting bang is imminent if prudent action is not taken immediately.

Bandh cripples life across nation as Maoist activists engage in vandalism and attacks

Bandh cripples life across nation as Maoist activists engage in vandalism and attacks
Nepalnews, 20-Dec-09

Normal life throughout the nation was adversely affected from early morning on the first day of the general strike called by the Unified CPN (Maoist) on Sunday.

Kathmandu's streets looked deserted with no vehicular movement. Long distance buses, too, did not operate. Transportation in other parts of the country has also been obstructed with vehicles mostly preferring to stay off the road. While many people have not been able to make to their work, many others were seen walking to their destinations.

Cadres of UCPN (Maoist) and its sister organizations gathered in variousplaces to impose the bandh.

Schools and colleges across the country also remained closed as was most government and private offices, factories and main market places.

Shops and shopping malls in downtown Kathmandu and major squares remained shut, while few retail stores and tea-shops in the interior parts of the city were open.

There were reports of clashes between the bandh organizers and police in various parts of the country including the capital city with Maoist activists hurling stones at riot police deployed to maintain peace and order during the bandh.

Many parts of the capital city wore a look of a battle-field as activists affiliated with the Unified CPN (Maoist) and their supporters engaged in violent clashes with riot police, resulting in injuries to scores.

The Bandh enforcers burnt tyres, vandalized any passing vehicles including those that were parked, and didn't even spare ambulances and press vehicles.

Places like New Baneshwor, where the Constituent Assembly is located, including Putalisadak, Bagbazaar, Gaushala and few other places saw the most intense clashes between the police and bandh organizers during the Maoist-called strike.

In Baneshwor area, Maoist activists pelted stones on a vehicle carrying State Minister for Tourism Shatrughan Mahato, who was on his way to the airport to welcome Prime Minister Madhav Kumar Nepal who returned from Copenhagen after attending a climate change summit today. Minster Mahato is said to have escaped unhurt in the incident with just minor damages to his vehicles.

Around two dozens persons, including CA lawmaker Yashoda Subedi and DSP Dilip Chaudhary, were injured in a severe scuffle between the Maoist activists and riot police at New Baneshwor. Most of the injured were Maoist activists with few others being police and bystanders. However, no critical injuries have been reported.

The clash reportedly ensued after police tried to bar protestors from removing the road dividers by using water canons. In response the protestors hurled stones at the security personnel. Police had to use batons, water canons and fire tear gas shells to disperse the irate protestors and take the situation under control.

Television images showed by-standers running for cover, squatting at the eves of closed shops or fleeing to narrow alleys as the police charged at the protestors with batons while the latter continued to hurl stones at them.

Similar scuffles were seen in front of Gaushala and Bagbazaar, including few other places too.

The situation in front of Shanker Dev Campus in Putalisadak also turned tense after the protestors started hurling stones at the police. In resulting police action, scores of protestors were injured and many were taken into custody.

Despite promising that they will not obstruct press vans, vehicles carrying diplomats and tourists, ambulances and other emergency services,the Maoist activists attacked a vehicle belonging to Shahid Gangalal Heart Center at Maharajgunj. They mercilessly pelted stones at the vehicle carrying the hospital staffs, injuring four of them. The ambulance driver was severely injured and rushed to nearby Teaching Hospital while other hospital staffs were chased away.

The hospital staffs were going to the hospital to perform an emergency surgery.

The protestors have also vandalized press vehicles in different places of the capital. Few photographers and camerapersons were also injured after being hit by stones hurled by demonstrators while covering the strike.

Meanwhile, reports quoted home ministry spokespersons as saying that that police have arrested more than 60 Maoist activists for engaging in vandalism and trying to enforce the bandh in various parts of the country. More than two dozen bandh organizers is said to have been arrested in the capital while 19 have been arrested in Rajbiraj for engaging in vandalism.

Similarly, the Maoist imposed bandh also paralyzed life in Pokhara, Janakpur, Tansen and Sindhuli with offices, educational institutions and main market centers closed and vehicular movement coming to a grinding halt. There are also reports of mistreatments against journalists covering the bandh by Maoist activists in Kavre.

The Maoists called a three-day general strike at the end of their third phase agitation against the President's move on army chief case in May.

They had organised a torch rally throughout the nation on the eve of the three-day strike Saturday evening. It had turned down the request of the government including political parties like Nepali Congress and CPN (UML) to withdraw the bandh programme.

A large number of security personnel were deployed in Kathmandu from early morning today to avert any damage to property and life. Kathmandu metropolitan police had also issued circulars to all its units instructing them to remain alert throughout the period of bandh to protect property and life.

Inflation: November 2009 (9.9%)

Inflation moderates, food costlier
REPUBLICA, 18-Dec-09

Country´s overall inflation moderated to 9.9 percent in mid-November 2009, compared to 14.5 percent during the same period last year, Sustained rise in food prices, however, continued to bore deep hole in consumers´ pockets.

Says a latest report of Nepal Rastra Bank (NRB), drop in consumer prices of non-food items and services caused overall inflation to moderate. “Otherwise, prices of food items have continue to grow by more than 16 percent,” it states.

On food items also, consumers mainly bore the brunt of sharp rise in prices of sugar and sugar-related products and fruits and vegetables.

Prices of sugar and sugar-related products had soared to about 51 percent during the period, while fruits and vegetables too had become expensive by about 39 percent.

The report further notes that lentils became expensive by 29 percent and meat, fish and egg prices too jumped 21.4 percent during the period.

Only food items whose prices soared at moderate rate are cereal products. Their prices during the period grew at the rate of 8.1 percent, whereas their prices had jumped 19.1 percent during the same period last year.

Consumers also witnessed low growth in transport fares and communication tariff during the period, compared to their price rise in the same period last year. Together, transportation and communications price index grew by 8 percent in mid-September, 2009, whereas their prices had grown by 22 percent in the same period last year.

Prices of tobacco and tobacco-related products too became expensive by 11.6 percent during the period.

Likewise, the overall year-to-year salary and wage rate index rose by 22.2 percent in mid-September 2009, as compared to a rise of 10 percent a year ago.

Of the salary and wage rate indices, the salary index increased by 32.8 percent. The increase in basic salary and allowances for civil servants and its simultaneous effect on salaries in the private sector contributed to such an increase in the salary index.

The overall wage index too went up by 18.9 percent during the period, compared to 13.3 percent during the same period last year.

NRB imposes 25 pc cap on realty loans

NRB imposes 25 pc cap on realty loans
myrepublica, 18-Dec-09
MILAN MANI SHARMA

In a bid to correct the overheated realty market, Nepal Rastra Bank (NRB) on Thursday imposed a cap on the exposure of banks and financial institutions to housing and real estate loans, asking them to limit such exposure to 25 percent of their total investment portfolio by the end of fiscal year 2012/13.

The NRB directive has also instructed banks to limit housing and real estate loan exposure as a share of their total loan portfolio to 40 percent within this fiscal year and to bring it down to 30 percent by the end of next fiscal year.

The new directive requires the banks not to issue loans of more than 60 percent of fair market value of the collateral/project.

As for the real estate sector (which does not include the housing sector) the central bank has asked the lending banks to reduce exposure to 15 percent of total loan portfolio by the end of next fiscal year and to 10 percent by the end of fiscal year 2012/13.

In case banks and financial institutions fail to comply, the central bank has said they will need to provision for the excess amount (above the cap), calculating it on the basis of 150 percent risk weightage.

"This policy measure will not only slow down the realty sector but it could trigger desperate selling, sending the prices downward," Min Man Shrestha, general secretary of Nepal Land and Housing Developers´ Association, told Republica.

Developers said that the change in lending rate policy that the central bank announced on Tuesday has already sparked a rise in housing and real estate loans by at least 2 percentage points. "That has already made housing loans unaffordable to the general consumer," said Shrestha.

Imposition of a cap and compelling the banks and financial institutions to down-size their investment in the sector is certain, on the other hand, to put pressure on land and housing dealers operating with bank loans to repay their loans as soon as possible.

"The central bank´s measure will not only dampen new demand but also intensify pressure to sell. It will drag land prices down," said another developer.

Shrestha also echoed this statement, adding that the new policy measure will mainly hurt small developers and petty investors operating on bank loans with the sole motive of profit-making.

"Since this segment accounts for 45 percent of total land deals and is mainly responsible for the present unnatural price rise, its caving in would force the market to correct," he said. Developers even noted that the impact could be seen as early as within a month.

US company shows interest in Tamorkhola hydel

US company shows interest in Tamorkhola hydel
Nepalnews, 16-Dec-09

A US based development company has shown interest in the construction of the 500 MW Tamorkhola hydro-electric project located in the border of Taplejung and Tehrathum, Kantipur daily reported.

Representatives of Hillsdale Group, incorporated in Alexandria, US, has met with energy minister Prakash Sharan Mahat, energy secretary Shankar Prasad Koirala and chief of Nepal Electricity Authority (NEA) Jeevendra Jha and expressed its interest on the project.

The group also queried about the legal procedure and investment environment in Nepal. The chairman and Chief Executive Officer (CEO) of the group is S.M. Sainju, a Nepali doing business in the States for 20 years.

The group has also met with UCPN (Maoist) chairman Pushpa Kamal Dahal, CPN (UML) chairman Jhala Nath Khanal and Nepali Congress vice president Ram Chandra Poudel and discussed the project.