Under WB pressure, two commercial banks to go private

By Prem Khanal

KATHMANDU, Jan 12 :With the World Bank, the principal lender, tightening the government’s screws, the Finance Ministry is finally handing over the management of the country’s two largest commercial banks to private company within a month, a highly-placed source at the Ministry said here today.

Irked by the 21-month long controversy that shrouded the management hand-over of these banks, the World Bank has warned that it would retract the promised loan assistance if the process is not completed by February 15.

The WB issued this warning in a letter sent to the Nepal Rastra Bank (NRB), the central bank, recently, Ministry officials said. "The WB has cited increasing pressure from its headquarters as the reason behind its latest stand." This is the fifth time that the WB has set the deadline, according to the officials.

The WB has said that if the process still does not finish within the stipulated time, it would be difficult for them to get final approval from the bank’s board meeting slated for July, the source said. The board of the WB is scheduled to approve the loan assistance worth Rs 830 million during this board meeting. All the expenditures required before final approval are being made available through a WB fund for Project Preparation Facility.

However, the government officials are hopeful that the processes of management hand-over would complete before the WB deadline. "The final agreement of management hand-over of Rastriya Banijya Bank, one of the two ailing banks, would be signed on January 28," informed the source.

If everything goes as planned, the agreement between NRB and Deloitte Touche Tomatsu, a US management company, would be signed on January 28, according to the Finance Ministry.

Earlier, the WB had pointed out the need to add some clauses in the agreement to prevent an easy way out of the contract winner after the completion of the contract period. According to a NRB source, World Bank had argued if the contractor makes an easy way out just by recommending for liquidation of the bank, there will be no use of investing Rs 830 million.

However, government officials are confident that some sort of solution regarding the concern of the WB would be found before January 28.

In December, a team of Deloitte Touche Tomatsu, an international consultant, was in the capital to negotiate for the management hand-over of RBB after the NRB approved its financial proposal.

The company’s bid, with US$ 5.9 million as a consultant fee, was the lowest among the bidders. The nearest rival Arthur & Anderson had quoted US$ 8.1 million for the two-year management contract.

Similarly, the management hand-over process of Nepal Bank Limited (NLB) has also entered into the final stage. Among the three competing contractors to takeover the management of NBL, Price Water Rice Cupers has quoted the lowest price demanding US$ 4.95 million in its financial bid, whereas the other two companies, ICC and Earnest and Young International have demanded US$ 4.98 million and US$ 8.69 million respectively.

The central bank is expected to invite Price Water Rice Cupers for the final negotiation within a week.

The management contract of the banks will be initially for two years, which could be extended for one more year. The management team, among others, will be responsible for; taking complete control of day to day running of the banks, providing immediate help to stabilize the banks’ operation and restore their financial health to an acceptable level.

Donor communities had been pressing the government to speed up its financial reform process. The International Monetary Fund and the World Bank had even threatened to freeze all loan flow until the management of the two is not transferred to the private consultants.

The government had embarked upon the management-transfer-project after KPMG Barnet, an international auditing, had declared the two banks technically insolvent in its report last year.

More casualties across country
One rebel shot dead, 11 suspects held

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KATHMANDU, Jan 12: Security forces on Friday gunned down one and arrested 11 suspected Maoists across the country, said a Defence Ministry release issued here today.

According to the release, joint armed forces of the Royal Nepal Army (RNA) and the Armed Police Force (APF) shot dead a Maoist in Singha area of Myagdi district. The slain has been identified as Krishna B.K. who was allegedly involved in laying an ambush at the same place a week ago.

A rebel was hurt when a grenade exploded in his hand while he was trying to hurl it at the security forces in Mugitar area of Ramechhap, the release said.

In Kavrepalanchowk district, another Maoist was injured in a clash with the armed forces. The injured rebel was airlifted to the Capital by an RNA chopper, said the release.

The release also said that armed forces seized socket bomb, explosive materials and two pistols in the Chitlang area of Makwanpur district.

Security forces also seized seven guns in Baramja area of Myagdi, and one gun in Gaunsahar area of Lamjung.

The armed forces also arrested scores of suspected rebels across the country on Friday, the release added.

Altogether 11 suspected "terrorists" were arrested on Friday from the four districts of Khotang, Chitwan, Parbat and Rupandehi.

A case of surrender was also reported in Baghchaur, Salyan district.

A bomb disposal squad was able to defuse a "banner" bomb in Bode, Bhaktapur, hung by the Maoists, according to the release.

In another press release today, the Ministry has said that besides orders to restore peace in the country, the RNA has also been asked to look after the development projects in the country, which they have been taking up consistently.

RNA was deployed across the country after the Maoists unilaterally broke truce by launching attacks on police forces across the country. Dozens of police personnel and armymen were killed in the attacks.

RNA men are "currently busy" constructing roads throughout the country, said the release. RNA is working on the Okhaldhunga-Katari, Salyan-Musikot, Musikot-Burtibang and Beni-Jomsom roads.

Similarly, in Turture, Gorkha, RNA is constructing a temporary bridge above Marsyangdi River.

RNA is also gearing up to construct the Drabya Shah Highway, Gorkha-Manakamana and Arughat-Arukhet roads, the release added.

Four killed by Maoists

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KATHMANDU, Jan 12: Maoist "terrorists" have intensified their activities in various parts of the country and have killed at least four persons in a single day.

In the processes an armed group of "Maoists terrorists" murdered three persons in Hangdeva VDC of Taplejung, Friday.

According to Chief District Officer (CDO) Krishna Prasad Poudel, Tak Bahadur Patangwa, a teacher at local Janta Secondary School, Ram Bahadur Sanwa and Macchindra Mahatara, both from the same VDC, were shot dead by a group of around 35 Maoists on Friday night after surrounding the house they were sleeping in.

Two people, Jitendra Limbu and Krishna Mahatara the sons of deceased Tak Bahadur and Macchindra Mahatara respectively, were also injured in the incident. Both the persons have sustained injuries in their thighs and have been flown to the capital for treatment.

The security forces have started extensive hunt for the assailants in the area but have not been able to nab them so far, says District Superintendent of Police Dan Singh Bohara.

On the same night the rebels have also shot dead Yagya Gurung, Chairman of District Sports Development Council in Ward No 2 of Birendra Nagar Municipality in Surkhet, a statement issued by the Ministry of Home Affairs states.

Similarly, in Syangja, the rebels attacked and critically injured Yam Bahadur Thapa, vice chairman of Pelkachaur VDC and an active member of the Nepali Congress. Thapa has been taken to Paschimanchal Regional Hospital in Pokhara as Syangja District Hospital was not equipped enough to treat him.

Thapa has sustained deep cuts on his arms and legs. Dr Keshav Raj Dhungana of Syangja District Hospital said that his condition was very critical because of excessive bleeding.

It is suspected that Thapa was attacked as he had helped the security forces by giving them information about the rebels during search operations conducted there a few days back.

Likewise, it has been reported that the Maoist rebels are forcefully lifting grains from several villages of Parbat district and hoarding it at the house of a local Congress leader.

The Maoists are "collecting" grains specially paddy from Thati, Ranipani, Triveni, Saligram, Pangrang and Beulibas VDCs of the district. According to eyewitnesses around 50-60 rebels are acting under the command of Mohan Giri a member of so called "district peoples’ government".

U-19 cricket team heads for Youth World Cup

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KATHMANDU, Jan 12: Nepal’s Under-19 cricket team left for New Zealand today to play the Youth World Cup, starting from January 14.

But the 17-member team’s departure was not a big affair as the officials of the Cricket Association of Nepal did not go to the airport to see them off. CAN had earlier organised a farewell function two days ago due to tight security arrangements at the airport.

The 14-member cricket squad is led by Binod Das while Pramod Kumar Upadhyay, vice-president of Cricket Association of Nepal (CAN), accompanies the team as the official for the tour. Roy Dias, former Sri Lankan Test cricketer and Nepal’s official coach, is accompanying the side with Samson Jung Thapa as his deputy.

Nepal, prior to the championship matches, is slated to play two practice matches; against Namibia on January 6 and a local New Zealand outfit on January 17. Nepal is pooled along with England, Pakistan and Papua New Guinea in the Group C.

A total of 16 teams – 10 Test and 6 non-Test playing nations – divided into four groups, will vie for the top spot in the championship. The six non-Test playing nations, which enter the World Cup as the regional Champions, are Nepal, Scotland, Namibia, Papua New Guinea, Canada and Kenya.

While Nepal entered the apex cricket championship following its win in the Youth Asia Cup 2001, Namibia qualifies as the African winner; Scotland as the European winner; Canada as winners of the Americas and Papua New Guinea as the winners of Asia-Pacific. Kenya enters the tournament owing to its special One-Day-playing nation status.

Nepal is scheduled to meet England in its first Cup match at Lincoln on January 21 followed by match against Pakistan on the next day. Nepal’s last pool match against the Papua New Guinea is on January 25.

Top two teams from each group qualify for the eight-team Super League, which will be further divided into two groups with teams playing in a league basis within the group. Likewise, the bottom two teams from each of the four groups will be entitled to play for the Plate Championship, after being divided into two groups.

Top two teams from each of the Super League groups will qualify for the Cup semi-final.

‘Obsolete’: Verdict is out on SAARC child-welfare convention

By Tilak P. Pokharel

KATHMANDU, Jan 12: The hundreds of children living on Kathmandu’s streets might either have been caught and dumped inside police stations or prevented from coming out into the open when the SAARC leaders were redeeming their pledge for child welfare.

The South Asian governments might think that signatures on one more piece of paper would change the plight of a quarter of the world’s children living in the region. But not the child welfare activists.

They say the Convention signed for the welfare of children during the Summit is "obsolete".

They say the SAARC Convention on Regional Arrangements for the Promotion of Child Welfare in South Asia, signed during last week’s Summit, is a three-year-old document because it was prepared in 1999. Some also call the Convention "conservative".

"This Convention is very conservative," says Gauri Pradhan, President of Child Workers in Nepal – Concerned Centre (CWIN).

The term "child welfare", says Pradhan, was conceived in the early 1960s. "It is ridiculous to keep the same term in a so-called progressive convention in the 21st century," says Pradhan, who is also the president of the NGO Federation of Nepal.

This Convention, claims Pradhan, is fragile because there is not even a single clause binding the state parties to protect the rights of the child. But he also added that the Convention was a positive indication that the South Asian governments, at least, took up the problems of children as a common issue.

South Asia is home to over 50 per cent of the world child labour population, with about 130 million children working in extremely difficult situations, according to CWIN.

Bijay Sainju, Executive President of CONCERN-Nepal, an NGO working in the field of child rights and environment, echoed the views of Pradhan. "We should take the SAARC governments’ commitment as a positive one but the Convention itself lacks a host of other necessary things," he says.

Sainju also was dissatisfied with the term "welfare". Instead, he suggested, it could be "right" or "well-being".

CWIN’s Pradhan strongly suggests that the South Asian governments amend the convention during the 12th SAARC Summit to be held in Islamabad of Pakistan next year.

The Convention, among other things, has strongly "reaffirmed" the SAARC governments’ adherence to the Declaration of the World Summit for Children and their commitment to the UN Convention on the Rights of the Child (CRC). The governments have also declared the decade 2001-2010 as the "SAARC Decade of the Rights of the Child".

The Convention was framed by taking the CRC as the comprehensive international instrument concerning the rights and well-being of the child. All the South Asian countries have already ratified the CRC.

The Convention, however, is not clear about setting up a South Asian Nutrition Initiative, which is stated in the Article V(e).

Kiran Bhatiya, Gender and Protection Advisor at Regional Office of South Asia (ROSA) of UNICEF, points out that the Convention has strongly reminded the member states to seriously implement the CRC.

"Another positive point about the Convention is that it has silently urged the South Asian governments to sign and ratify the Optional Protocol of the CRC," she said. Nepal and Pakistan have signed the Optional Protocol while Bangladesh has ratified it. She is also optimistic about the increased participation of children themselves in their development through bilateral and multilateral arrangements, as provisioned in the Convention.

Pressure mounts on NOC to bring down oil price

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KATHMANDU, Jan 12:Following the latest announcement by the Indian government to cut down oil prices, a pressure has mounted on Nepal Oil Corporation (NOC) to follow suit.

NOC, the monopolist importer and distributor of petroleum products in the country, has now assured to review oil prices in April due to this intensified pressure from all the quarters.

But the NOC is not in a position to slash the prices immediately, NOC officials say. Despite the Indian oil price cut and the relatively low international oil price at present, revision of domestic oil price is not possible at the moment, the officials said here today. "Since the petroleum products currently in the market were purchased about six months ago, when the international oil price was still high, prices cannot be immediately slashed," said Madan Raj Sharma, Executive Director of NOC.

However, he asserted that prices would be reviewed after distribution of the newly purchased oil consignment begins in April. "If the international oil prices remain at the present level, prices of the petroleum products would certainly be lowered," he said.

The Indian government Friday announced to bring down the price of petrol by IRs 1.40 (NRs. 2.24) per litre in petrol and IRs 1 (NRs. 1.60) per litre in diesel. But the price of kerosene remains the same.

The government, while hiking the prices of petroleum products over a year ago, had promised that the prices would be reviewed if the international oil price fell. The then Minister for Industry, Commerce, and Supplies Ram Krishna Tamrakar had announced that the government would adopt a policy of reviewing the petroleum prices in direct correlation with the international oil prices.

Since then the international oil price has plunged remarkably to around US$ 20 dollars per barrel after the September 11 attacks in the United States, though the prices for a brief period had shot up. The government now is under tough pressure to implement its petroleum price policy announced last year.

Along with a decline in the global oil prices, the procurement price of oil for NOC from the international market has also declined by around 31 per cent within last three months.

However, per ton price of kerosene tumbled drastically in November to US$ 198 and it further declined in December to US$ 188 per ton, which is over 50 per cent less than last year’s purchasing price. The NOC had paid US $ 273 per ton kerosene last September.

During that time, the international kerosene price had skyrocketed to US$ 380 per ton and the government had announced a massive price hike citing a huge financial loss of more than Rs 3 billion. As per the understanding with the Indian Oil Corporation (IOC), NOC buys kerosene from international market and exchanges it with petrol and diesel in India for domestic consumption.

Sharma also said that the oil currently in distribution was purchased in May, June and July and the global kerosene price at that time was US$ 260 to 300 per ton. NOC officials have been arguing that due to the oil price difference between India and Nepal, price cut alone in Nepal is not possible as it will further encourage smugglers to operate in the porous Nepal-India border, which will force the corporation into losses.

They also said that if the domestic prices are lowered without a parallel decline in India, the existing price difference will further widen and the illegal outflow of petroleum products from Nepal to India could scale to an unbearable level.