14 firms bribe NEA officials to get 24-hr electricity

KATHMANDU, NEPAL:

A government probe has concluded that 14 firms along the Itahari-Biratnagar industrial corridor saved energy bills worth at least Rs 50 million over the past three months ending mid-April by influencing officials of five distribution centers of Nepal Electricity Authority (NEA) to provide them round the clock electricity even during load-shedding.

The firms paid just Rs 6 for a unit of electricity. Power generated from generators would have cost them around Rs 25 per unit.

“As the irregularity is of large scale, the investigation team has recommended that the government probe further in order to identify the NEA officials who unlawfully supplied electricity to private firms,” a member of the investigation team told Republica on Sunday.

Ministry of Energy (MoE), which looks after NEA, had formed a five-member probe to look into the issue following widespread criticism.

According to sources, owners of the firms ensured round the clock electricity to their production facilities by paying kickbacks to officials of different distribution centers of NEA. Those firms had managed to get uninterrupted power supply from NEA´s distribution centers in Itahari, Duhabi, Biratnagar, Dhankuta and Siraha.

The team submitted its report to the ministry last week after conducting field study.

“The probe team looked into electricity supply scheduled of the five distribution centers. We found that those distribution centers supplied electricity to the 14 firms going against the nationwide load-shedding schedule,” the member added.

According to MoE officials, locals had complained about the issue last year as well. But their complaints were not entertained. “No one showed interest to look into the issue then,” an official at MoE said preferring not to be named.

The firms that enjoyed round the clock power supply by influencing NEA officials are Raghupati Jute Mill, Baba Jute Mill, Maruti Cements and Asian Thai Food, among others.

“Owners of 14 firms are found to have bribed officials at the distribution centers to ensure 24-hour power supply,” the probe committee member told Republica.

The member said the firms saved Rs 19 per unit of electricity consumed in the three-month period.

“Now, it is up to board of directors of the NEA to take actions against the perpetrators," the member said.

The investigation team led by Sundar Shyam Shrestha, deputy director general of the Department of Electricity Development (DoED), comprised three officials from the ministry and a representative from the NEA.

Source: myrepublica, 13th May 2013

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Norway offers to assist Nepal in building Transmission Lines

Norway is interested to help Nepal build electricity transmission lines and ultimately remove one of the major bottlenecks in evacuation and distribution of hydropower.

"We are ready to provide assistance to the Nepal government if it comes up with strategic plans to develop transmission lines in the country," Alf Arne Ramslien, Norwegian ambassador for Nepal, said at an interaction on ´´Norwegian assistance to Nepal in hydropower development: Challenges and Opportunities´ organized by Society of Economic Journalists Nepal (SEJON) on Tuesday.

Highlighting the importance of hydropower in the country´s development, Ramslien said erection of transmission lines is a major task to tap the country´s hydropower potentials. “There are challenges as well as opportunities in hydropower development in Nepal," Ramslien said speaking in the interaction on ´Norwegian assistance to Nepal in hydropower development: challenges and opportunities´ organized by Society of Economic Journalists Nepal (SEJON).

Stressing the need for political stability and policy consistency for economic development, Ramslien said the government should come up with strong plans if it wants Norwegian support to help build transmission lines. “The power trade agreement between Nepal and India is important to build North-South and cross border transmission lines," Ramslien added.

He also said the Norwegian government was ready to support Nepal in conducting feasibility study of different large scale projects.

“Our efforts will be on helping Nepal. We want to invest here as the country has comparative advantage in hydropower sector,” Ramslien said, adding that the Norwegian Embassy in Nepal is currently working on developing new plans to support Nepal in energy sector.

According to information posted on website of Norwegian Embassy in Nepal, the Norwegian mission is working on accelerated hydropower development, rural renewable energy development and technical energy development.

"The embassy is planning to enter into a co-financing agreement with the Asian Development Bank for development of transmission projects in Nepal," the Norwegian mission in Nepal has posted on its website.

Source: myrepublica (Feb 6th, 2013)

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Nepal offers huge investment opportunities-Ambassador of UAE

Non-resident ambassador of the UAE to Nepal Mohamed Sultan Abdalla Al Owais, speaking at a programme here today, said that Nepal offers a lot of opportunity to investors.

“In the last four years of my tenure in New Delhi, UAE has doubled its trade volume with India,” he said, adding that the UAE wants to replicate the same in Nepal too.

The New Delhi-based envoy said that a team of United Arab Emirates businessmen will visit Nepal soon to explore business opportunities.

Though UAE is largely known as one of the key destinations for migrant workers, the trade volume between the two countries has also been increasing in recent years.

Nepal had exported merchandise worth Rs 326.300 million to UAE in fiscal year 2010-11, according to figures of the Trade and Export Promotion Centre (TEPC).

UAE — the 29th largest trading partner of Nepal — had exported merchandise worth Rs 13.61 billion to Nepal in the fiscal year, the data revealed, adding that Nepal’s trade deficit with UAE stood at Rs 13.28 billion in fiscal year 2010-11.

Likewise, Nepal’s exports to UAE in 2012 stood at Rs 322.99 million, whereas it imported merchandise worth Rs 37.66 billion, according to the TEPC data. “On the basis of export volume, UAE is the 19th largest export destination of the country.”

The United Arab Emirates (UAE) is the largest supplier of gold to Nepal.

Nepal imported some 87.6 per cent of gold from the UAE in fiscal year 2010-11, the TEPC data revealed, adding that the country had imported gold worth Rs 9.95 billion from the UAE, out of the total gold imports of Rs 11.35 billion.

Likewise, in fiscal year 2009-10, the country had imported 68.4 per cent — Rs 28.5 billion out of the total import of Rs 40 billion — gold from the UAE.

Besides gold, major imports from UAE include edible oil, beverage, fuel oil, petroleum bitumen, and polyethylene, whereas Nepal exports large cardamom, woolen shawls, scarves, and mufflers, among others to the UAE.

“There is a need to enhance trade relations in the interest of both the countries,” the envoy said.

Nepal and the UAE entered into diplomatic relations in January 1977.

Likewise, the then Royal Nepal Airlines started its flight to Dubai in 1985 in transit to its European destinations. Currently, Etihad Airlines, RAK Airways, and Fly Dubai are some of the airlines of UAE catering to the needs of travellers, mostly migrant Nepalis to and from UAE, which is also one of the key sources of remittance inflow to the country.

Source: The Himalayan Times (Feb 4th, 2013)

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New NRB Rule allows Nepalese Nationals to get foreign loans of up to $200,000

Nepalis can now legally acquire zero-interest loans of up to US$ 200,000 (about Rs 17.29 million) from individuals, relatives, organizations and institutions based abroad.

Nepal Rastra Bank (NRB), the central monetary authority, on Wednesday introduced the provision in line with commitment made through the Monetary Policy introduced in mid-July 2012, ending the ban put on Nepalese individuals from acquiring credit from a foreign country.

“The provision was introduced to facilitate individuals who want to start or expand their businesses with money borrowed from those based in foreign countries,” NRB Executive Director Lila Prakash Sitaula told Republica.

In order to acquire loans from abroad, individuals first have to obtain permission from the central bank.

“For this, borrowers will have to submit loan utilization plan and provide information on type of business they are currently doing or are planning to set up. They will also have to establish their loan repayment capability,” NRB said.

Along with these, borrowers will also have to show that no interest is levied on the credit that they are getting.

However, the central bank has acknowledged that it may not be easy for it to ascertain conditions on which individuals have obtained loans from abroad. “To prevent exploitation of this loophole, we have decided to allow borrowers to remit only the principal amount once the loan tenure expires,” a high-ranking NRB official said.

NRB has said repayment period of such loans should be at least five years and the credit should enter the country through a formal channel.

Source: myrepublica (Jan 31st,2013)

New NRB Rule-Nepal might experience increased remittance inflows

Remittance inflow might see an increase as commercial banks can now open a liaison or representative office outside the country.

Commercial banks that have fulfilled the basic criterion according to the central bank’s rule can now open a representative or liaison office outside the country, Nepal Rastra Bank (NRB) said today.

They must, however, have minimum basic paid up capital, been maintaining one per cent more buffer capital since the last one year, have Non Performing Assets of less than five per cent for the last three years, and the central bank must not have penalized any of the directors within the last six months.

Those commercial banks that fulfill the criterion must first apply at the central bank with financials of the last three years, declaration of its capacity to abide by the regulation of the regulatory authority of the concerned country where they are willing to open a representative or liaison office, besides a feasibility study and the bank’s board decision, said Nepal Rastra Bank that will permit banks with time restriction, if the applicant fulfills all the criteria.

Commercial banks must get approval from the concerned country’s regulatory authority within six months and a final approval from the central bank to open a representative or liaison office that must come into operation within six months and they must inform the central bank.

“Commercial banks must take approval from the Foreign Exchange Department of the central bank for the foreign currency needed to open an office in a foreign country,” NRB added.

Commercial banks have been asking the government and the central bank to allow them to operate offices outside the country.

Some of the commercial banks have, even, been planning to open a liaison office in the key remittance originating countries like India to officially channel in remittance through banks. Though a World Bank report has projected remittance inflow growth rate to slow down, a large chunk of remittance inflow from India has not yet been completely utilized through formal banking channels making it difficult to track its contribution to the total remittance.


Recently, Global IME Bank had sought the central bank’s permission to open a liaison office in New Delhi, India, to channel the remittance inflow through the bank.

The Monetary Policy has also promised commercial banks to allow them to open offices outside the country, though earlier, the Unified Directives 2010 had allowed only licensed institutions established with foreign equity participation to open a liaison or representative office according to the conditions stipulated by the central bank.

Source: The Himalayan Times (Jan 31st, 2013)

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Nepal experiencing negative Tourism inflow growth rate

Rising trade unionism backed by political parties has hurt the tourism sector, according to tourism entrepreneurs.

“Repeated strikes by politically backed trade unions have hit the tourist inflow growth rate,” said vice president of Thamel Tourism Council Ramsharan Thapaliya, addressing an interaction here today.

Tourists do not come to Nepal to remain confined to a room, he said, adding that guests come here to visit various sites. “But repeated strikes by politically backed trade unions have forced entrepreneurs to serve them in hotel rooms, which is not sending a good message.”

The country has witnessed a fall in the growth rate of arrivals in 2012 as compared to 2011 and 2010. According to figures from Nepal Tourism Board, tourist arrivals in 2012 increased by only 9.8 per cent to 598,204, as compared to 2011, when some 544,985 tourists visited Nepal. In 2011, arrivals had recorded a growth of 21.4 per cent as compared to 2010.

The government must create an environment whereby tourists can easily visit Nepal, said another tourism entrepreneur Khum Bahadur Subedi, on the occasion.

Despite the huge potential in the country to attract tourists, Nepal has not been able to exploit it, said president of Nepal Association of Rafting Agents Nanikaji Thapa. “The country has not been able to conserve cultural and natural heritages that are the key attractions for tourists,” he said, adding that the government must conserve them as tourism is the lifeline of the economy. “But due to the lack of a tourist-friendly environment, the country is losing billions.”


Likewise, tourism entrepreneurs, on the occasion, also asked the government to bring tourism favourable policies to promote the country, apart from adding aircraft for the ailing national flag carrier. “Due to the lack of aircraft with Nepal Airlines Corporation (NAC), the country is losing billions as international airlines have been enjoying the monopoly market,” they blamed.

Tourism secretary and newly appointed chairman of the corporation Sushil Ghimire consoled entrepreneurs saying that NAC will buy new aircraft in a few days. “The long wait of 25 years to buy aircraft is coming to an end,” he said, adding that NAC will get the aircraft soon.

Since the peak tourist season in the country lasts for only six months, the government must develop packages to expand it to throughout the year, suggested president of Trekking Agencies’ Association of Nepal Mahendra Singh Thapa. “There is cut-throat competition in the trekking sector which has fuelled illegal trekking, and the government must control that trend,” he said, asking the government to bring a security plan for tourists.

Source: The Himalayan Times (Jan 30th, 2013)

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Nepal Government to Offer Guidelines on Cooperatives Mergers

The Nepalese government is set to issue guidelines on cooperatives' merger by mid-January with a view to further managing and strengthening the cooperatives sector.

Currently, there are around 26,000 cooperatives operating across Nepal.

The guidelines are being prepared under the leadership of the Cooperatives Department with the objective of integrating the saving and cooperatives organizations in the urban areas and preventing them from financial bankruptcy.

Kedar Neupane, Registrar of the Department, said it was a working procedure rather than guidelines and the department was at the stage of issuing it within two weeks. Almost all processes for the cooperatives merger guidelines have been concluded, he added.

He said the big cooperative organizations have invested large amounts of their capital in the land and housing sector and the working procedure is expected to minimize the risk of financial crisis in these organizations.

There are some 11,000 cooperatives based in the urban areas and among those, around 5,000 are operational in Kathmandu, Lalitpur, and Bhaktapur districts.

As many as 60,000 people are directly employed by the cooperatives whereas around 600,000 have benefited from them. The total capital of the cooperatives has currently reached Rs. 250 billion.

Source: The Himalayan Times (29th Jan, 2013)

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Nepal's rising trade deficit to have adverse impact on economy

Ministry of Commerce and Supplies has stressed on the need to move forward bringing all pending issues on table to tackle widening trade gap with its southern and northern neighbours.

Concluding that the trade deficit between the two countries will have adverse impact to the country’s economy, the ministry has asked experts to float ideas on reducing the ballooning trade deficit.

India is a major trade partner of Nepal, an official at the ministry said, adding that the country had a total trade worth Rs 372.30 billion — export of Rs 50.93 billion and import of Rs 321.34 billion — with India alone in the fiscal year 2011-12.

The trade deficit with India stood at Rs 270.41 billion, which is 63.8 per cent of the total trade deficit of the country, the ministry data revealed.

Trade deficit with the northern neighbour China has also seen a gradual increase in recent years. The country has imported goods worth Rs 53.90 billion from China in 2011-12 against Rs 46.38 billion a year ago in 2010-11.

The government should identify exportable items and promote exporters to be engaged in trade activities, the official at the ministry said, adding that simplification of modalities for traffic-in transit and removal of non-tariff barriers and administrative hassles will help increase exports and substitute imports that has also been sky-rocketing in recent years mainly fueled by remittance.

The government should step up its efforts in improving the export volume of agricultural goods including leather, ginger, tea, herbs, toothpaste, textile and handicrafts, the official opined.

India, US, Bangladesh, China, Germany, UK, Japan, France and Italy are the main importers, he said, suggesting the government to identify new destinations to expedite export of Nepali goods.

Source: The Himalayan Times (Jan 27th 2013)

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US-based companies set to invest in Nepal

A New York-based company promoted by Nepalis has joined hands with a Chicago-based company to provide clean and sustainable energy in Nepal.

The New York-based Nepal Infrastructure Consult (NIC) and Chicago-based renewable energy company New Generation Power (NGP) have signed a Memorandum of Understanding (MoU) aiming at enhancing infrastructure and clean energy projects in Nepal.

The New Generation Power aims at providing clean and alternative energy across the world, whereas Nepal Infrastructure Consult will represent the project and liaison with appropriate government, non-government and bi-lateral agencies on behalf of NGP in Nepal, according to president of NIC Suman Neupane.

The New Generation Power and its partners — Panasonic, Martifer Solar, Patriot Solar, Jones Lang LaSalle, Eaton Corporation, Toshiba and Talesun — have commissioned renewable energy projects in the fields of solar, biomass, wind, hydro, waste to energy and geo-thermal energy in various parts of the world.

Over 200 MW of renewable energy projects constructed by them are currently in operation, whereas over 3,000 MW of renewable energy projects are its pipeline in many parts of the world. The NGP, in partnership with Wanxiang America Corp, is also developing a 62MW solar facility adjacent to the Rockford International Airport in Rockford, Illinois in the US.

Likewise, Nepal Infrastructure Consult — established with an objective of bringing potential small, medium and big investors in the United States linking project holders, entrepreneurs in Nepal — aims at helping its clients bridge the gap between their infrastructure needs and financial resources by focusing on public private partnerships and innovative capital financing.

Chairman Dr Chirinjeev Kathuria and senior vice-president (International) Nisha Joshi of NGP and president of NIC Suman Neupane signed the MoU on behalf of their respective institutions.

Source: The Himalayan Times (Jan 27th 2013)

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Price of Gold per tola Rs.3600 more expensive than global price

The government's decision to raise customs duty on gold has made the yellow metal expensive in the Nepali market by Rs 3,600 per tola (11.664 grams) compared to the price in the international bullion market.

Before the revision, gold price difference between local and international market was Rs 2,750 per tola.

In a bid to control smuggling of gold to India, the government on Thursday raised customs duty on gold Rs 3,500 per tola from Rs 2,682 per tola. The government took the decision after India raised customs duty on gold to 6 percent from 4 percent effective from Monday.

Nepal Gold and Silver Dealers´ Association (Negosida) fixes the price of gold in the local market, calculating the value of US dollar against Nepali currency, import tax and profit margin for dealers.

"Though the government has increased customs duty to reduce price difference between Nepal and India, there is no guarantee that it will control gold smuggling from Nepal given the open borders,” said Tej Ratna Shakya, president of Negosida.

The fresh revision means Nepal´s customs duty on gold is Rs 120 per 10 grams more than the duty fixed by India.

Shakya said such a small duty difference would be simply insufficient to control gold smuggling to India which has been increasing in recent months due to shortage of Indian Currency (IC) in Nepali bordering towns. Smugglers sell gold to India to earn IC which they exchange in Nepal at inflated rates. Though official exchange rate of IRs 100 is Rs 160, IRs 100 fetches as much as Rs 168 in Nepali bordering towns.

“The government should have raised customs duty by at least Rs 1,000 per 10 grams. Higher price difference would have discouraged smugglers,” Shakya added.
Jewelers are facing shortage of yellow metal at a time when wedding demand is at its peak. According to dealers, they are getting only about 15 kg of gold from designated banks even though daily demand for gold hovers at around 40 kg.

Meanwhile, gold price remained unchanged at Rs 57800 per tola on Sunday even though its price in the international bullion market fell by US$ 8 per troy ounce (31.10 grams) on Saturday. The yellow metal was traded at $1,660 per troy ounce in the international bullion market on Friday.

The price of silver, however, went down by Rs 15 per tola. On Sunday, silver was traded at Rs 1,110 per tola.

Source: myrepublica (Jan 28th 2013)

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Gold Price set to increase

Gold will cost more during the ongoing wedding season as the government has increased import duty on the yellow metal by Rs 700 per 10 grams with effect from Friday.


The government revised the gold import tax on Thursday and raised it to Rs 3,000 per ten grams following the Indian government´s decision to increase import duty on the precious metal to 6 percent from 4 percent in the past.

The Indian government took the decision to raise the duty last Monday to curb imports of the yellow metal, which have been widening the country´s current-account deficit.

Nepal immediately followed suit as the Nepal Gold and Silver Dealers´ Association (Negosida) lobbied that the government do so to rein in smuggling, which has lately been blamed for shortage of the yellow metal in the domestic market.

Currently, the daily demand for gold in the domestic market stands at 30 kg to 40 kg, according to Negosida.

Source: myrepublica (Jan 26th 2013)

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