Works on inland container depot complete

By Gopal Devkota

BIRGUNJ, Jan 14 - The construction works of Birgunj Inland Container Depot (ICD), a multi-billion rupees project, jointly financed by the World Bank and the government, has been completed, but is unlikely to begin operation on time due to India’s continued indifference to sign the railway operation modality.

Despite government’s repeated official follow-ups, the Indian Railways Board has not responded on Railway Operation Modality draft sent by Nepal almost a year ago. Director of the project Purushottam Ojha informed media persons that Nepal has official been following-up the issue with the Indian government. As per the initial program, all necessary preparations regarding the ICD should have been completed last December.

"We are following up the issue with the Indian government and the ICD will come into operation within the next six months," Ojha said at a press conference organized here on Saturday.

Arvind Kumar, chief of the Indian rights company that overlooks the ICD project, has also said that there arise no question of not reaching an agreement. The laying down of the railway lines is estimated to cost Rs 200 million. 90 per cent of the railways construction works has been completed, he said. With the completion of the construction works, Birgunj would have direct links with Calcutta.

"The delay from the Indian side may be because of the need to get a green signal from the Indian railways and the Commerce and Finance ministries," he said, adding, "There is no room to doubt that agreement to the effect will not take place."

Even the World Bank, which financed the construction of Birgunj ICD that cost Rs 730 million out of the estimated 770 million had also shown concern on the issue of railway agreement with the Indian Embassy. However, it had asserted that it is a bilateral issue and had stressed to resolved it bilaterally.

If the deadlock remains unresolved, it could hamper the operation of the project, which is already delayed by over 9 months. The ICD was earlier expected to be completed last March, but the goal remained unrealized largely due to the delay in construction works and construction of broad-gauge railway lines by India.

Once Birgunj ICD, with a capacity to handle 40 thousand containers annually, comes into full operation, transit and transportation costs for Nepal will go down by as high as 40 per cent, said Kumar. He added that customs clearance facilities could also be set up in Birgunj after the ICD becomes operational, which till now is being done in Calcutta, the main gateway for Nepali foreign trade.

Birgunj ICD is the largest among all ICDs that the government undertook. The other two ICDs are located in Biratnagar and Bhairahawa, both of which have already come under full-fledged operation. The Birgunj ICD has two large godowns, 400 by 25 metres and 250 by 35 metres. According to Kumar, the 400-metre long godown is largest in South Asia.

The ICD, among others, also has a powerhouse, water tank of 150 thousand litre capacity, 6 railway lines and refrigerator containers. The ICD has a capacity to accommodate over 140 truck containers.

The government has given the responsibility of running the ICD to Nepal Inter-modal Transport Development Committee. The committee in turn would operate the ICD with the help of private parties, for which ten companies have tendered their bids.

The World Bank had decided to finance the project in December 1997, only after India agreed to cooperate in it and even extended grant assistance for the construction of board-gauge railways track connecting the ICD to Raxaul, India. Out of the estimated cost of US$ 28.5 million, US$ 23.5 million is being financed by IDA, the World Bank and US$ 5 million is being met by Nepal Government.

Economy, finance and market

By Supa Upadhyay

Domestic money market:

The Average Weighted Discount Rate (AWDR) of 91-day Treasury Bills (TBs) dipped marginally to 5.25 percent compared to the previous week. The rupee was traded higher at 98.70 and lower at 98.74 for 91-day TBs. The NRB had received 23 bids worth NPR 1040 million against the notified amount NPR 750 million for 91-day TBs. In the regular weekly auction, the NRB is going to issue 91-day TBs worth NPR 760 million and 364-day TBs worth NPR 500 on January 16, 2001.

Domestic capital market:

A declining trend prevailed on the stock market in the absence of any worth while buying interest. Since, the government had issued this week a 5-year National saving certificate worth NPR 1000 million for individuals, many regular investors were off from the stock market. However, the certificates were not subscribed fully in the given short notice. The NEPSE Index-100 opened lower at 479.29 from the previous week close of 482.20 slipped sharply in the consecutive days and eventually closed lower at 464.76 for the week, netting a loss of 17.44 points. This week, trading was estimated at 86960 shares valued NPR 36.4 million compared to 28940 shares valued NPR 26.2 million of previous week. Commercial Banks alone shared 84.81 percent of total traded amount. This week, the Index of and Finance/Insurance Sector and other sector improved while commercial banks, production sector, business sector and hotel sector lost. This week, brokers had quoted the prices of 48 companies on the trading board but 42 companies were traded. Out of forty-two traded companies, fourteen companies improved, nineteen companies lost and other nine traded companies remained unchanged at their previous prices. Bank of Kathmandu, NIC Bank and Nepal Bank Ltd registered the first, the second and the third most traded company trading 9980, 7160 and 1930 shares respectively. Share of Nepal Bank Ltd, Nabil Bank, Nepal Grindlays Bank, Himalayan Bank, Bank of Kathmandu, Everest Bank, NIC Bank, Taragaon Regency Hotel, NIDC Mutual Fund, Premier Insurance, Neco Insurance, NEFINSCO, Kathmandu Finance, People Finance, Citizen Investment and Nepal Housing Development were able to trade in all four working days.

Forex round-up:

The USD ended the week strengthening against all its major partners. Although, the dollar remained under pressure against both the EUR and GBP as nervousness remained during the week but eventually it took fresh impetus to break recent lows. The Yen has weakened as there are signs of increasing capital outflows from Japan and it was given a final push by comment from Finance Minister Miyazawa that a week Yen was good for business and talk that Toyota was converting surplus JPY into EUR and USD.

The INR and NPR both remained unchanged against the dollar over the week. The NRB intervened the Forex market this week absorbing excess foreign exchange from the market.