News Roundup: Upper Tamakoshi Financing Complete (Almost)

Roundup of Nepali Economic and Business News for Feb 5-10
By NepaliEconomy.com
News Archive

Financing for Rs. 33 billion 456-MW Upper Tamakoshi Hydroelectric Project (UTHEP) in Dolkha District is coming to a completion with Rastriya Beema Sansthan (RBS) investing Rs. 2 billion. Other investors include Employees Provident Fund (12 billion), Nepal Electric Authority (NEA) (9 billion), Nepal Telecom (6 billion) and Citizen Investment Trust (2 billion). If NEA is unable to raise additional Rs. 2 billion of the projected cost, the government will foot it. UTHEP is slated to be a relatively cheap producer at Rs. 120 million per MW compared to Rs. 150-160 million at its peers. The project is slated to start in June.

Maoists continue to play hardball on foreign investments. They threaten to shut down major hydro projects including West Seti and Arun-III. Power investors want NEA to increase power purchase agreement (PPA) from current Rs. 4 per unit during wet season (8 months) and Rs. 7 during dry season (4 months) given rising costs of doing business in Nepal.

Amid the so-called financial crisis, banks are reaping record profits. Nepal Credit and Commerce Bank posted Rs. 384 million profits in the first half of this fiscal year and Manakamana Development Bank Rs. 92.2 million. 50-year old state-owned Nepal Industrial Development Corporation (NIDC) is re-starting its operation as a Development bank.

Prices of essential commodities in Kathmandu are up on average by 20% over the past month due to lack of supply. There is global dimension to it but Nepali government seems oblivious. It is letting domestic producers export additional 400 tons of lentils. India is reciprocating by allowing exports of 50,000 tons of wheat to Nepal. Japanese government is giving half billion rupees to purchase food for food-deficit districts. Go figure!

Airfares are likely to go up as operating costs are rising. Landing prices are going up from current Rs. 300, aviation turbine fuel (ATF) going up Rs. 5 to Rs. 75 and fuel surcharge by Rs. 60 to Rs. 180 depending upon flight distance. Is it true that Nepalese pilots in domestic carriers earn Rs. 300,000 a month and Nepal Airlines only Rs. 45,000?

Labor-management woes closed 24 outlets belonging to Bakery Café, Hot Breads, Nepal Dairy and Jajoo Café for 5 days before opening on February 9 costing the owners Rs. 800,000 a day of business.

Finally a government bureaucrat, Narendra Man Shrestha, joint-secretary at the finance ministry is convicted of a corruption charges.