Hetauda Textile Factory unable to resume operation

By a Post Reporter

HETAUDA, April 12 - Hetauda Textile Factory was supposed to resume its production from the last week of February as the Factory and Royal Nepalese Army reached to an agreement to provide Rs 20 million to it.

Two months have passed but the Factory has not received the said amount.

However, the government provided Rs 30 million in August 1999 which resumed the operation of the factory for a brief period of 100 days.

And Rs 30 million released by the government in February this year was a drop of water in the ocean compared to the outstanding pay of the employees, electricity and water tariffs and purchase of a small amount of cotton.

A meagre amount of 2 million has been left after clearing the long standing dues, says Administrative Chief Binod Upadhyaya.

The employees’ union and the management of the factory have time and again asked the government to reopen the factory that has remained closed for more than eight months. The factory workers even took to the street to pressurize the government to operate it and the government provided Rs 60 million after they reached to an agreement to resume the operation of the industry.

Hitler Bishet, President of Makawanpur Chamber of Commerce and Industry says the unclear policy of the government regarding the factory has created confusion in the industrial sector.

If the factory is not opened, it will have a negative impact on the economic activities of Hetauda Municipality, says Bijaya Kumar Baidya, chairman of District Employers’ Council Makawanpur.

The factory, which has a capacity of producing 24 thousand metres of cotton cloth per day, has a due of over 120 million rupees and has 1200 employees including 500 women workers.

Shrestha vows to fight for business prosperity

By a Post Reporter

KATHMANDU, April 12 - Rajesh Kaji Shrestha, the newly elected President of Nepal Chamber of Commerce (NCC) has expressed his determination that he would fight for the welfare of entrepreneurs by rendering maximum support.

Shrestha, at the age of 38, is the youngest president of the 47-year old business association, thanks to his dedicated work since his assumption at the office as an executive member a decade ago.

In an informal talk with The Kathmandu Post today, Shrestha expressed his commitment to shoulder the responsibility of such a big association dedicatedly, which has over than 10,000 business organizations.

When asked how he felt at being elected an unopposed president of such a big association, he replied: "I am concerned with the advancement of business and economic activities in the country by resolving related problems of the private sector."

Showing his concern at the slow pace of country’s economic development, he expressed his confidence to face the new challenges and opportunities of the 21st century.

"Despite the world is being developed as a small village, Nepal has not been able to cash in new innovations. It is high time that the business sector and the government go jointly for making the country economically vibrant," he said.

If we see the global trends in information technology, there has been revolutionary changes the world over, however, Nepal has yet to exploit its growing potentials, Shrestha opined.

Since I am elected unopposed as the chief of the chamber, I hope to get entrepreneurs’ help wholeheartedly, in moving in an integrated way by uplifting the morale of small entrepreneurs, he hoped.

As economic development and resolution of business problems is not possible without the cooperation of the government, Shrestha hoped that Finance Minister Mahesh Acharya’s commitment to support the business sector would be fruitful.

Shrestha, as a young entrepreneur, sees both challenges and opportunities in the accession of Nepal into the World Trade Organization (WTO) regime. He stressed upon the need for the government to create a congenial business environment for making business enterprises competitive in the global markets.

Since the government has not been able to lure more local and foreign investment, there is an urgent need to develop an institutional framework to encourage businessmen, he opined. A suitable forum could be the setting up of a Board of Investment (BoI) that would help entrepreneurs to start new businesses, he added.

As most of the small entrepreneurs in the country still adopt traditional methods of agriculture although contributing hugely to the economy, he urged them for adopting modern techniques by which the contribution of the sector could be enhanced.

Believing that without business sector’s development, the country cannot advance, he urged the banking sector to create a favourable environment by granting small-scale manufacturers and entrepreneurs with small loans.

Shrestha who did his commerce graduation from Tribhuvan University believes in hard work to be successful in life. He was decorated with Prabal Gorkha Dakshina Bahu by His Majesty the King in 1997 and Udyog Ratna Award from Institute of Economic Studies, Delhi, India, in 1999.

Shrestha has attended a number of international seminars and workshops related to economic issues and has visited more than 22 countries of the world. He has been associated with other associations like Nepal China Chamber of Commerce and Industry, Hotel Association Nepal, Nepal Russia Chamber of Commerce and Industry and Federation of Nepalese Chamber of Commerce and Industry among others. He is presently serving as executive chairman of Nepal International Business Pvt Ltd., Managing Director of Hotel Rara Pvt Ltd. and as director of Alliance Insurance Co Ltd., among others.

Rail link to Sirsiya: life line of ICD

By Purushottam Ojha

With the objectives of reducing transit transport costs and bringing efficiency in trade transaction, His Majesty’s Government of Nepal has stepped in implementing the Nepal Multimodal Transit and Trade Facilitation Project (NMTTFP) in 1998. The Project was a subject of talk among the transporters, freight forwarders, trading and business communities since the mid-Eighties. The long cherished dream for streamlining the trade and transport sector is on the way to realization with the provision of adequate logistics in the form of physical facilities and documents and procedural reform and simplifications to be brought through the project.

The development of Inland Clearance Depots (ICDs) or Dry port is of significance in view of efficient supply chain management. The uninterrupted chain with faster and secured movement of merchandise is the need of hour to make the country more responsive to the world trade regime. The development of containerization, technological advancement in the transport services, use of fast fleet and electronic data messaging system has given rise to new thinking and innovation to make trade transport more efficient and customer oriented. Multimodal Transport system is an answer to many issues related to trade logistic and services. The sufficiency of maintaining low inventory by the factory owner and stockist justifies the notion of Just-in-Time (JIT) delivery, which calls upon a very sound and just supply chain with door-to-door services.

Dry port or ICD is an entry point to move to the Multimodal Transport system which opens up a new vista of trade paradigm through a number of measures in the form of simplification, standardization and harmonization of trade documents and procedures, aligning of trade documents, customs reform and modernization, strengthening the capabilities of trade and transport related entities, reform in the regulation and setting up Electronic Data Interchange (EDI) system. The world is now moving towards paperless trade, e-commerce and with greater control over the goods in transit through electronic information. This has equally benefited developing countries at par with the developed ones.

The Nepalese ICDs under project are the efforts to bring changes in the traditional trading pattern through the use of modern hardware and software facilities. Out of the three ICDs located in Biratnagar, Bhairahawa and Birgunj, the former two are road-based and relatively smaller in size. Each of these ICDs comprises of approximately 3 hectare area where the hard topping for parking of vehicles, good shed for warehousing, inspection shed for customs check, electric substation, water supply, fire fighting services and administrative blocks are provided. The construction works of these ICDs have been recently completed and the one at Biratnagar has even started operating.

A Modern Facility:

The ICD at Birgunj is a much bigger facility covering a total area of 38 hectare with various structures and facilities at par with the international standard Multimodal Terminals. The major facilities at Birgunj (Sirsiya) ICD are comprised of a warehouse measuring 400x25m, a container Freight Station of 205x35m size, container yard of area 80,000 square meter where loaded containers can be stacked to 4m high. The greenfield area located 4 km west of Birgunj also houses workshops, administrative blocks, canteens, water supply, high mast illuminations and fire fighting systems. This facility has a rail link provision to connect with the Broad Gauge (BG) rail line of Raxoul India.

The ICD Birgunj has been designed basically for rail traffic that is supposed to enter Nepalese ICD directly to and from the gateway port of Calcutta and Haldia. There are seven railway lines inside the ICD running parallel to each other. Out of these, one line is dedicated for loose cargo like coal, gypsum, two lines for general (mixed) cargo, three for containerized cargo and one line for sick wagons. The engine of the rail can be moved from one line to another through the intersections.

The concept of rail link ICD at Sirsiya Birgunj has emerged from the gauge conversation plan of the government of India (GOI). The Indian government has formulated a uniguage plan for all railway network in India by converting all meter gauge to broad gauge by the end of the Ninth Plan. Accordingly, the meter gauge line of Muzaffarpur to Raxaul was converted to broad guage line in 1995. The formulation of ICD development plan has vis-a-vis relationship with the gauge conversion scheme of our close neighbour.

New Development in Trade and Transit Treaties:

The bilateral relations between Nepal and India is unique in the region with so many ties and bonds of friendship in social, cultural, economic and geo-political fields. The history of Indo-Nepal economic cooperation is as old as the history of the two countries. However, the co-operation has made a jump forward after the 1950s when both countries gained freedom and democracy. The cooperation from the Government of India right from the new democracy in Nepal in 1950 has been significant and is still continuing to be so. The area of cooperation has extended right from infrastructure, projects to education, health, industry, urbanization, cultural and other diverse fields.

India has been the only transit country for the third country trade of Nepal. Besides it is the largest single trading partner for Nepal. Being a close neighbour, Indo-Nepal trade is based on special preferential grounds which are not common to all nations. In this connection, the Trade Treaty signed between the two countries in December 1996 provides significant concession to Nepal. Under this treaty, India agreed to waive the provisions of 50 percent Nepalese labour and Nepalese and/or Indian material content for Nepalese products wishing to have duty free entry into India. Neither customs duties nor any kind of quantitative restrictions can be applied to such products, barring only three items, that includes (a) alcoholic beverage and their concentrates, (b) perfumes and cosmetics of foreign origin and (c) cigarettes and tobaccos. All items manufactured in Nepal can enjoy preferential treatment in the Indian market.

Another significant achievement in the transit sector was made in 1997. As Nepal was looking for an alternative route of transit, India agreed to let Nepal use the 44 Kilometer long Kakarbhitta-Phulbari route for third country trade through the ports of Bangladesh.

The system of One Time Lock (OTL) for the containerized cargo was introduced in 1996 as a part of the Transit Treaty between the two countries. Under this arrangements the Indian Customs House at Calcutta and land border will merely check the OTL of containerised cargo and let the container move onward to or from the Nepalese border. The Indian Customs would not generally open such containers until and unless there are reasons to do so. This has substantially reduced costs associated with pilferage and losses in transit.

The Transit Treaty signed between the two countries in January 5, 1999 is also a step forward in developing mutual trust and confidence. This treaty has made a provision of renewing the treaty automatically in every seven years which has placed Nepal in a better position of transit facility as compared to the previous position.

Ojha is the Project Director at Nepal Multimodal Transit and Trade Facilitation Project

(To be contd.)

Birgunj Customs revenue collection up

By a Post Reporter

BIRGUNJ, April 12- Birgunj Customs, the largest customs point in terms of customs revenue, has increased revenue collection slightly in the first eight months of the current fiscal year compared to the corresponding period of the last fiscal year, but is below the target.

Ishwor Pokhrel, Chief customs officer at the Birgunj Customs informed that the Customs has increased customs revenue by 210 million rupees and Value Added Tax collection by 340 million rupees.

The customs collected 2.81 billion rupees in customs tax and 2.41 billion rupees in Value Added Tax during the first eight months of the current fiscal year.

Paradoxically, collection of income tax has decreased by over 140 million rupees in the first eight months of the current fiscal year.

Though the net revenue collection is up by 400 million rupees compared to the last fiscal year, it is still 250 million rupees below the target set for the first eight months of the current fiscal year. The collected revenue is only 91.48 percent of the targeted revenue. The present customs tax collection is depressingly poor, given the fact that import increased by over 35 percent in the first half of the current fiscal year. The surge in the import has not been reflected in customs tax collection.

Overall revenue mobilization at the central level is also not up to the expectation and Finance Secretary Ram Binod Bhattarai had already pointed out the need for "strict vigilance" to fill the shortfall in revenue collection.

Ishwor Pokhrel says it could not meet the target due to prolonged strike in Calcutta Port, the only seaport used by Nepal in India, and electioneering in the Indian State of Bihar. The transporters in Calcutta dealing with the transportation of Nepalese container called on a strike for two weeks demanding fare hike.

The customs target was hiked by 19 percent this year compared to the last fiscal year.