Special security move to counter Maoist violence

By a Post Reporter

KATHMANDU, Sept 15 - The government is all set to make new security arrangements which will see special police teams mobilised across the country in a bid to "effectively combat" the Maoist insurgency, Home Minister Govinda Raj Joshi said here today.

Addressing a press conference organized here today, Joshi also said that under the new arrangement "all the merged police posts will be reinstated in the previous bases" of the mid-western hill districts, the hotbed of nearly five-year-old Maoist insurgency.

Besides reinstalling the police posts, more posts would be added as required, Joshi added. The Home Minister wrapped up his week-long tour to the Maoist affected districts yesterday.

"We have made fresh arrangements to strengthen the law and order situation in the country," he told a packed press conference here Friday. "The special police teams will be mobilized within a few days."

According to him the security forces would also ensure security and development of the projects being launched under the government's special packages to the insurgency-hit areas.

"I am encouraged by the situation there," he said of his experiences in the mid-western hills' district headquarters. "I found that the number of those willing to quit insurgency is increasing."

Joshi also said that the government was still in favour of talks with the underground party. "The talks, however, should be within the framework of the Constitution."

Melamchi project set to complete by 2006

By Surendra Phuyal

KATHMANDU, Sept 15 - Works are progressing satisfactorily to complete the much delayed Melamchi Drinking Water Supply Project by the end of 2006. Representatives of almost all the donor agencies are converging in the capital coming week to finalize the multi-million dollar project's crucial task-appraisal of grant and loan assistance.

Representatives of Asian Development Bank (ADB), Norwegian development agency, NORAD, Swedish development agency, SIDA, and World Bank

(WB)--the donor agencies funding the US $ 430-plus million project--will start the project's loan appraisal works coming week, executive director of Melamchi Drinking Water Board, Dinesh Chandra Pyakurel told The Kathmandu Post Friday evening.

Japanese Bank of International Cooperation (JBIC), another donor agency which is providing US $ 52 million for the project, has already completed the loan appraisal works, according to him. JBIC will approve the loan after all the other lending agencies complete the appraisal works.

"Officials of SIDA and NORAD have already arrived here today," he said, "The ADB officials are scheduled to arrive here on Sunday. They will jointly initiate the works, and complete the works by the first week of October. The bottomline is: we will get all the loans sanctioned by the end of this year."

ADB has committed to provide US $ 120 million, NORAD and SIDA US $ 25 million each (total US 50 million), Organization of Petroleum Exporting Countries (OPEC) US $ 14 million (which will be channelled through ADB) and World Bank "US $ 150 plus US $ 65 million" for the project.

Nepal is receiving the assistance being provided by NORAD as grant, SIDA as mixed credit - meaning half grant half loan - and all the rest as soft loan, according to Pyakurel.

Granted "top priority" by the government, the Project will divert 170 million litres of drinking water (mld) daily to Kathmandu Valley whose over 1.5 million population suffer from acute scarcity of drinking water every summer.

Earlier, at an interaction programme organized by the locals of Sindhupalchok's Melamchi Valley, Pyakurel announced that the project's 26-km tunnel construction works "will begin from exactly this time next year when the 18.5-km access road construction works too will be completed."

The Cabinet is also going to pass the project's new land acquisition and compensation policy within 15 days, according to him.

Call for a code of conduct for media

KATHMANDU, Sept 15 (PR)- Minister for Information and Communications Jaya Prakash Prasad Gupta today reiterated the need for a code of conduct for the press. Minister Gupta has been calling for the censorship on "terrorism" (Maoist movement) related news.

Stressing the Government's commitment to ensure press freedom, he said it was high time for media to follow self-imposed code of conduct. "Let the press demarcate its jurisdiction, and decide its own barriers," he added.

Speaking in an interaction program organized by the Ministry of Information and Communications, Minister Gupta said the government was serious regarding security and law and order situation. He said that the government had taken a decision to censure the press about seven months ago, and would like to get feedback from the concerned sectors.

Home Minister Govinda Raj Joshi said that the press had a crucial role in maintaining law and order in the country.

He added that the Home Ministry would not dictate the role of the media. But, he added, it should be playing a responsible role for the preservation of democracy and peace in the country.

He said if the media didn't follow a proper norm, it could have a hazardous effect on security situation.

CPN-UML leader Raghuji Pant said, "Maoist problem has evolved as a dominant problem faced by the country."

Pant said that violence would weaken the democratic norms and the system. He accused the Nepali Congress government of flaring up the Maoist issue only in words but not doing sufficient for its solution.

Government has to find their own means to solve the maoist issue without blaming the media, said Pant.

SJM leader and MP, Lilamani Pokharel blamed the government for the ongoing violence saying the Maoist violence had not jeopardized the national sovereignty. He added that the government should never dream of censoring the media against the spirit of the constitution.

Nepal Bank Limited in financial morass

By Binaj Gurubacharya

KATHMANDU, Sept 15 - Just a week after the government owned commercial bank declared billions of rupees in bad loans, the only other commercial bank with government investment today declared billions in uncollected loans.

Figures released by Nepal Bank Limited (NBL) today show that out of its total investment 31.63 percent of loans are in defaulted category, majority of which have been defaulted for years.

NBL Chairman Sambhu Prasad Khanal said that out of the total Rs. 22 billion disbursed, the bank categories only 68.37 percent as good or recoverable loan.

The loans exceeding the due date by at least one month total Rs. 720 million, by one-to-six months total Rs. 2.1 billion, by six months-to-five years total Rs. 3.27 billion and more than that are categorised as unrecoverable loans.

Bank officials and analysts point the finger to the poor monitoring system and corrupt bank officials, who approve loans without checking the credibility of the creditors and by inflating the value of collateral for hefty commissions.

"We have started taking action against corrupt officials, one of the person taken action is in a high position," Khanal said stressing for more actions against corrupt officials.

The parliamentary committee today ordered probe into the situation of the bank and constituted a sub-committee with parliamentarian Shiv Bahadur Deuja, Sarbhadhan Rai and Pari Thapa as members.

This body will have to report back within two months from today on the situation and make recommendation to correct the anomalies in the bank by reviewing previous reports on the state of the bank.

Few months back, an investigation report by an international audit firm on the financial position of NBL had said the bank's lending process, loan files and the loan portfolio itself were deeply flawed and the bank was technically insolvent.

London-based KPMG Barnet said that by international standards, NBL suffers from serious, critical shortfalls in all key areas.

The government commissioned auditing disclosed the long-suspected financial mess of the bank some months ago amid rising concerns among financial experts and donors on the financial health of the bank.

Just last week the chief of Rastriya Banijya Bank (RBB) admitted that the government owned commercial bank had billions of rupees in bad loans and it was in no condition to recover it.

Records show that RBB has over Rs. 8 billion stacked just in principal amount of loans that have not been recovered and crossed the dead line long time back. This amount makes up at least 22 percent of the total loans issued by the bank. The interests on the loans sanctioned by the bank add up to Rs 9.67 billion.

RBB's Executive Chairman Punya Prasad Dahal had said that loans that had not been recovered date back to 1965 and there are billions of rupees that are yet to be settled.

Dahal had also admitted widespread irregularities among bank officials while issuing loans and evaluating collateral. He had said that if action was to be taken against all the staff of the bank who are involved in these kinds of irregularities then there probably would not be any employee left in the bank.

PAC first began to investigate on the allegations that RBB bank officials make inflated evaluations and grant huge loans against collateral that are a fraction in value and then had auctioned the seized property at nominal prices.

A probe has also been ordered to check RBB and report back within two months on recommendation to save the bank from total collapse.