No response to privatisation bid
Deadline for receiving proposals for Hetauda textiles to be extended one month

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KATHMANDU, Feb 12: The Ministry of Finance is considering the extension of deadline for submitting the financial and technical proposal for the privatisation of the financially bankrupt state-owned Hetauda Textile Factory (HTF) by one month.

A well-placed source at the ministry informed The Kathmandu Post that though the last date for the submission of the proposal ends on February 15, not only a single form has been purchased by private parties so far.

The source said that the ministry is mentally prepared to extend the deadline by at least a month. "The government has no alternative than to extend the deadline," the source added.

The source also said that despite the zero response from private parties for taking up the industry, the ministry would not change the conditions and procedures for the tender call.

Lack of interest of the private parties for the bankrupt Hetauda Textile Industry comes as a blow to the governments’ renewed commitment to speed up the snail-paced privatisation process.

Furthermore, the zero response also comes as a surprise for the government and other independent experts particularly at a time when both the government and private sectors are urging for more comprehensive participation of private sector in the privatisation process.

When asked for the reason behind the cold response of investors towards the industry, Mahesh Lal Pradhan, President of Nepal Textile Association said that lack of a conducive industrial environment is the most likely cause.

Furthermore, textile industries in the country are already fledging through tough times primarily due to its inability to compete against imported textiles. "Any new investment in the textile factory has become risky since most of such industries in Nepal are at the verge of collapse," he added.

Furthermore, the indifferent attitude of the government in solving the problems faced by the textile industries is another reason behind the cold response of the private parties for the largest textile industry.

Established over 25 years ago with investment amounting to over Rs 200 million with technical and financial assistance from the government of China, the textile factory was one of the most successful state-owned ventures until a decade ago.

However, the factory started to face financial turmoil in the post democratic era mainly due to financial irregularities and heavy politicisation among the trade union.

The government ultimately took the bold decision of privatising the industry after laying off all its employees in February, 2001. Subsequently, it closed down the industry and released Rs 250 million to clear the salaries and allowances of over 1,100 employees.

Presently, the industry has a negative net worth. While the factory’s net liabilities stand at around Rs 500 million, the government’s total investment is well over Rs 340 million.

‘Govt should adopt austerity measures’

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KATHMANDU, Feb 12: Former Finance Minister and leader of main opposition Communist Party of Nepal-Unified Marxist-Leninist (CPN-UML) suggested the government to take austerity measures in order to prevent the economy from being collapsed.

"The national economy is heading towards serious crisis. The government should be sensitive to it and cut expenses other than very necessary. The government should reduce the size of cabinet, stop junkets, travelling by planes and cut regular expenses to protect the economy from the crisis", he said.

He was speaking at an interaction in the capital organized by the Reporters’ Club Nepal today.

He also suggested to reduce corruption, stem leakage, make security expenses transparent. He said the government should introduce economic and social programmes to defeat the Maoists both morally and physically.

He asked the government to adopt short and long term policies to encourage the business community and rebuild the weakening economy.

He also blamed the government for imposing voluntary disclosure of income scheme (VDIS) that prompted capital flight and raising the tax rates at a time when the economic activities are on downturn.

The government could mobilize about Rs 5 billion which is has to get from various donors for the completion of donor-funded projects, but instead of doing that the government has chosen a wrong way to collect revenue to meet the soaring security expenses, he said.

Earlier Finance Minister Dr Ram Sharan Mahat had said that the government is committed to take action against tax defaulters immediately after the end of the deadline of VDIS stressing that no one would be spared.

"We will take action against those who have not disclosed their income within the given time of VDIS and no discrimination will be made while taking action’, he said.

He also said it is not the changes in the tax rates that have affected the export, but it is the internal and external terrorism. The government is not going to raise tax next time in this fiscal year, he added.

He also said that the government has already set criteria for reviving the tourism and export and a technical committee has been formed to set the standards for manufacturing industries.

Speaking about the ratification of the state of emergency, he said that almost all political parties have supported the announcement of state of emergency and the CPN-UML, the main opposition whose voting is crucial to ratify the state of emergency, has also clearly said that the government had declared it out of compulsion.

He also said that he is in favour of making changes in the constitution but the UML should not link the issue of constitution amendment with the ratification of state of emergency.

Ravi Bhakta Shrestha, President of the federation of Nepalese Chambers of Commerce and Industry (FNCCI) expressed the views that the government has raised tax rates in an inopportune moment, while the entire trade and industry is witnessing recession.

"How can government raise revenue when there is no business? When the business prosper, tax automatically goes up and it would be natural to raise taxes too", he lamented.

He also said that the VDIS should be applicable to all people of the nation, hinting at political leaders and other professionals.

Lightning damages NTC repeater station

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KATHMANDU, Feb 12: A lightning struck the repeater station of Nepal Telecommunications Corporation (NTC) Monday night at Madanbas, Sindhuli district cutting off the telephone connection of Ramechhap, Dolakaha and Sindhuli districts with other parts.

According to Hiranya Prasad Bhattarai, spokesperson of NTC, telecom service in the rest of the eastern part of Nepal is being provided through a regional satellite, which passes calls through a station at Biratnagar.

He said that a team of technicians has already been sent to the site to repair the damaged station and they would fix it right as soon as possible. The time to mend the repeater tower could be ascertained only after the team makes assessment of the damage. The extent of damage caused by the lightning is not known yet, he added.