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| Kathmandu Tuesday March 12, 2002 Falgun 28, 2058. |
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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.
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