Govt to announce airlines as sick industry

By Satyendra Timilsina

KATHMANDU, March 11 : Following the recent inclusion of hotel and export-based industries into the list of sick industries a few weeks back, the government is all set to put the airlines industry in the same list and to introduce rescue measures to revive the most affected sector of the ailing tourism industry.

According to a high-level government source, the technical committee under the Finance Ministry has forwarded its proposal to announce the airlines industry as sick, and to provide credit rescheduling and restructuring facility to the airlines sector.

The source further said that operating profit and net worth would be taken as the parameter to measure the sickness of airlines company. After the inclusion of airlines industry in the list of sick industries, the company that meets the criteria would receive the restructuring and rescheduling facility along with new soft loans.

"The government would provide the facility to those companies whose operating profit for the current year has eroded by more than 60 per cent as compared to the last year and net equity participation by over 50 per cent during the same period," another source informed The Kathmandu Post.

Airlines operators hold sanguine views that the government would take concrete measures to prevent the airline industry from collapsing. Kishor Silwal, Vice-president of Airlines Operators Association of Nepal, said, "The airlines operators are going through terrible days. Almost all the tourist flights have stopped. We are hopeful that the government would provide soft loans and restructure the loan with the airlines sector that is around Rs 2.5 billion."

In the meantime, the technical committee has also proposed to revise the existing criteria to identify the sick hotels, which are in a severe need of further financial support. The government earlier had stated that the room occupancy rate and the gross profit ratio would be the indicators to measure the sickness of the hotels.

"As only one hotel could meet the criterion, the government is preparing to lower down the earlier standard, after the request of several hotel entrepreneurs," said the source.

In a latest effort to revive the dwindling tourism and export-based industry, the government had announced hotel, carpet, garment, pashmina and other export based industries as sick and had announced providing refinancing facility at especially subsidised rates to the companies of these industries.

After being announced as sick industries, these sectors would receive subsidised soft loans from the commercial banks to revive their down-falling business. And the Nepal Rastra Bank would compensate it by refinancing the loans at three per cent to the commercial banks.

Domestic gold price easing

Post Report

KATHMANDU, March 11: The price of gold in the domestic market that had been climbing up continuously for the past four weeks to touch a five-year high has begun easing following the sale of 20 tonnes of gold by Bank of England last Tuesday.

The price of the yellow metal at the close of market today stood at Rs 7715 per ten grams, down from Rs 7740 on Sunday. Monday’s gold price is Rs 215 below the peak. Domestic gold price had reached its highest in the past five years when it touched Rs 7920 per ten grams last week.

However, the sale of the precious metal by the English bank at lower than then prevailing rates pulled down the price of gold in the international market. The bank had auctioned off the gold at US $ 296.5 per ounce (1 ounce = 31.103 grams) when the market price was well over US $ 299.

Gold in the international market today was traded at US $ 290.25 per ounce. The price is almost ten dollars below the highest price attained by gold in the international market in the past few weeks.

The Bank of England had auctioned off the gold as per its pre-announced policy to reduce gold reserves, instead accumulating US dollars and Euro. The bank has sold 715 tonnes of gold in the international market since it began reducing gold stock last year.

Gold traders, however, are of the view that it is not just the gold sale by the English bank that caused the price of the yellow metal to ease. "The recently announced economic stimulus plan by the US government is another reason why gold price in the international began reeling back," says Tej Ratna Shakya, president of Nepal Gold Silver Dealers’ Association.

He says that restoration of confidence of the investors on the stock market following the announcement of the stimulus package eased international gold demand to some extent, thereby reducing the pressure on price.

The continued poor performance of the global stock market and the Japanese economy were the major reasons behind high gold demand that led to a hike in its price. Investors tend to invest on gold as the best and reliable alternative investment sector at times when the stock performance is weak.

The domestic gold price in the past weeks in turn rose primarily due to the soaring international prices and the continued depreciation of the Nepali rupee against the major international currencies.

The Nepali currency in 2002 alone depreciated by 1.3 percent against the greenback. Since Nepal imports all gold by paying in convertible currency, any slide in the value of the Nepali currency directly leads the price to rise.

Vision 2020 for raising productivity, competitiveness

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KATHMANDU, March 11 : Office bearers of the Nepal Agriculture Research Council (NARC) speaking at a press meeting today said that the Vision 2020 is the twenty-year perspective policy on agriculture and related natural resources’ research aimed at increasing productivity and commercial competitiveness of the produce.

"The policy has incorporated changes in the institutional structure of the NARC and focuses on effective and efficient use of the scientific knowledge in the agriculture and related natural resources for achieving the poverty reduction," they said.

The meeting was organised by NARC on Monday with a view to disseminate information on Vision 2020 endorsed by the council very recently.

Highlighting the features of the policy, Nanda Prasad Shrestha, Director of Animal Research Council said that it has prioritized the researches on primary paddy crops, horticulture, animals, and cash crops.

"Market analysis, irrigation management, agriculture-forestry and policy researches are among the core contents of the policy and these have been stressed to address the challenges the sector will face following the WTO regime," he stated.

Even as the non-government sector will be promoted to involve in the research programmes, their participation will be ensured through National Agriculture Research and Development Fund (NARDF) which will run competitive research subsidy programmes of the NARC.

The fund will be used in the basic and core researches as identified by the NARC, he added.

According to the policy, the NARC will monitor and evaluate the performances of its programmes every five year and will effect necessary changes on the policy and strategies if required.

Indigenous knowledge and local resources will be used in the research process and emphasis will be laid on balanced regional development, Shrestha further noted.

"The NARC will promote the researches enhancing value addition and focusing specially on post harvest technology and processing," he highlighted.

Speaking on the implementation aspect of the policy, Sambha Bahadur Pandey, Director at Planning and Coordination Division, NARC, said that the council would carry out phase-wise programmes and formulate the implementation plan which will incorporate feedback and recommendations from stakeholders, experts and farmers of all the regions.

"The implementation plan will be formulated by the month-end June and the same will be implemented from the next fiscal year," he said.

Meanwhile, Narayan Prasad Regmi, spokesperson of Ministry of Agriculture and Cooperatives stressed on the use of proper technology to increase productivity and address the issue of cost of production.

Raghunath Prasad Sapkota, Officiating Executive Director of the NARC also spoke on the occasion.

Seminar on energy efficiency

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KATHMANDU, March 11 : Experts and concerned entrepreneurs today stressed upon the need to enhancing efficiency in the utilisation of energy sources, with a view to minimise energy costs and preservation environment.

They were speaking at a management awareness seminar on Energy Efficiency in the Hotel Sector, jointly organised by Hotel Association Nepal (HAN) and Energy Efficiency Project, a DANIDA funded environment sector programme supported by the government.

Kalyan B Pradhan, Joint Secretary at the Ministry of Industry, Commerce and Supplies, said that there is a possibility of saving energy being used in the hotel industry.

He suggested the entrepreneurs to save energy by reducing unnecessary wastage. However, he added that promoting efficient use of environment friendly energy sources in all sectors is not an easy task.

"The price distortions are making it difficult to promoting the use of environmental friendly energy sources", he said referring to the highly subsidised kerosene that is inducing many entrepreneurs to use it as a primary source of fuel in their industries.

Prakash Shrestha, first vice-president of HAN, lamented that the hotel industry is deprived of concession in electricity tariff though tourism has been classified into the industrial category.

Participants in the programme said that since the use of traditional form of energy, which makes to almost 90 per cent of the total energy consumption in Nepal, harms the environment, there is a need to promote efficiency in the use of sustainable and environmental friendly energy sources.