Public Expenditure Commission formed

By a Post Reporter

KATHMANDU, Sept 4 - The government has constituted five-member Public Expenditure Review Commission with a view to improving public spending management.

The Commission would within six months submit a report on ways to improve public sector spending and increase resource allocation in priority areas such as agriculture, irrigation, infrastructure development, education and health.

Finance Minister Mahesh Acharya had committed to form the commission in his last budget speech.

The commission is led by Binaya Dhoj Chand, member of the House of Representative. Dr Shankar Sharma, member of the National Planning Commission, Mukunda Prasad Aryal,

Secretary at the Ministry of General Administration, Rameshwor Khanal, Joint Finance Comptroller, and Yuba Raj Bhusal, Joint Secretary at the Ministry of Finance.

Poor public expenditure management is one of the pressing problems faced by Nepal since years.

Misallocation of resources in politically motivated projects and rampant corruption has marred the output of public spending. A recent study by The World Bank on public sector spending has also painted a gloomy picture.

Local air passengers complain ill treatment

By Shree Ram Subedi

JOMSOM, Sept 4 - Local air passengers from the western district of Mustang lament over the second class treatment they receive from airline operators flying the Jomsom-Pokhara sector.

They accuse both the government-owned and private airlines operating in this sector of preferring foreign clients to them, which makes it difficult for them to buy air tickets.

Foreigners' tickets are confirmed months before, locals' only hours before, that too if there are no foreign passengers, complains Nirmal Kumar Gauchan, Chairman of District Development Committee.

Gauchan alleges that locals are not only discouraged to board flights but flights are also cancelled sometimes if there are only local passengers. "They prefer chartered flights instead," he says.

Other locals too complain against the airlines. They allege that tickets are hardly issued to the locals during peak seasons of tourist arrivals. "Airlines postpone issuing tickets and ask us to come the next day and the next day never comes," says Sanjay Thakali, a resident of Jomsom.

"They tell us to wait until the last moment. If no foreigners turn up, only then are we issued the tickets," he claims. He also says that during the peak tourist seasons local passengers are even below ten percent.

The reason for discrimination is obvious. One-way ticket for a local costs Rs 850 in the Jomsom-Pokhara route while a foreigner has to pay about US $ 61, which is well over Rs 4,300 at the present exchange rate.

The other reason is the disparity in agents' commission. An agent receives about Rs 45 in commission from a ticket sold to a local passenger over Rs 850 from a foreign passenger.

However, Sujan Lalchan, public sales agent (PSA) of Gorkha Airlines claims that Nepalis are not discriminated in favour of foreigners. "In fact, previously it was difficult for a Nepali to get a ticket, but no more," he says.

Presently, Gorkha Airlines, Skylines Airways, Cosmic Air, Shangri-La Airlines and Royal Nepal Airlines Corporation operate in the Jomsom-Pokhara route. Airlines, on the other hand, admit of such practice blame the government responsible for it.

Dorjee Sherpa, Executive Director of Skyline Airways, says airfare has not increased for the past ten years but cost of fuel has risen. This has prompted airlines to prefer foreign clients for greater margin." He says flying only Nepali passengers would not even cover the costs of fuel. If the government wants to solve the problem, it must decide to increase fare, he says.

He claims airlines can even increase the number of flights if the air fare is reviewed.

Presently, the Jomsom-Pokhara flights are very irregular due to various reasons.

Private airlines fly on a seasonal basis depending upon the availability of foreigners mainly. And the weather is generally windy in Jomsom, which makes it impossible for aircrafts to land and take off after 10 AM resulting in frequent flight cancellations.

Nominal transaction through banking channel

By a Post Reporter

KATHMANDU, Sept 4 - Even nearly after two months of implementation of the budgetary provision to conduct Nepal-Tibet trade through the banking channel, the amount of bank drafts and convertible currencies issued for the purpose by the commercial banks is quite nominal.

As per the information given by Foreign Exchange Department (FED) of Nepal Rastra Bank, foreign currency equal to 319 thousand US dollars and bank drafts worth four hundred thousand US dollars have been issued during the first month of the current fiscal year by various commercial banks for imports from Tibet.

Mahesh Acharya, Finance Minister, in his budget speech for the current year, with a major aim to check illegal trade, proposed to channelize trade with Tibet through the banking system.

However, major turmoil in implementing the budgetary provision emerged when the Khasa branch of Bank of China refused to accept drafts and letters of credit (LCs) issued by Nepalese banks.

Although top level Nepalese negotiating team, consisting of customs officials and banking sector had several rounds of talks with the concerned Chinese officials on the issue, the understanding reached so far is yet to be implemented. However, officials at FED optimistically told The Kathmandu Post that negotiations they had with the Chinese officials was quite fruitful and the existing problem would be sorted out within a couple of days.

Trans-Himalayan trade of several items, after the implementation of the new budgetary provision on July 16, was affected adversely, as most of the traditional businessmen are unaware of the complicated banking processes.

The new provision allowed the continuation of barter system for only those goods, which it classified under the traditional group. According to the latest available information, Department of Commerce, which is authorized to issue import license under barter system, so far has issued the same for goods worth more than 1.32 billion rupees.

NMBF to give 20 pc dividend

By a Post Reporter

KATHMANDU, Sept 4 - Nepal Merchant Banking and Finance Ltd. (NMBF) has decided to give dividends of 20 percent of paid up capital.

The decision was announced at the 5th Annual General Meeting (AGM) of the company on Friday, states a press release received here today. According to the release, the company with total paid up capital of Rs 75 million, has issued capital of Rs 200 million. As of fiscal year end 1999/2000, the company has collected deposits of Rs 764 million and invested Rs 537 million.

Similarly, the company's operating profit and net profit at the end of the last fiscal year stood at Rs 30.8 million and Rs 22.1 million respectively, the release says.

The release also adds that the company is planning to issue five hundred thousand equity shares of Rs 100 each to the general public within the current fiscal year. The company has authorized capital of Rs 400 million.