RNAC to withdraw from Bangalore
Aims to add flights in Dubai sector

By Satyendra Timilsina

KATHMANDU, March 29:Royal Nepal Airlines Corporation (RNAC), the national flag carrier, is preparing to withdraw its Kathmandu-Bangalore (Ktm-Ban) air flight from coming June and is planning to divert it to the Dubai sector from August.

A highly placed RNAC official informed The Kathmandu Post today that the management is preparing to scrap its Kathmandu-Bangalore flights because of huge loss incurred by the RNAC in the operation of flights in the sector.

"The RNAC will not continue to fly in loss-incurring sectors, and therefore seeing at the RNAC performance in the Ktm-Ban sector, we have prepared to withdraw it," said the source. He informed that the total loss to RNAC from the sector alone amounts to around Rs 6 million each month.

The source further said that the RNAC’s plan to add a flight to Dubai is based on the performance of other international airlines on their flights to the Gulf countries.

There has been a significant growth in the passengers from Nepal to Gulf countries because of the increasing foreign employment provided to Nepali workers since the last couple of years. "Around 300 people fly to these countries for employment each day," manpower agencies claim.

It is not just the national flag carrier that is looking to grasp the profitable business of flying in the Gulf sectors, but even the Qatar Airways, which is currently operating a daily flight, is seeking the government’s permission to increase its flight frequency to two.

"We have asked the government to increase the flights and if we get the approval, we will fly the additional flights from coming June," Joy Dewan, General Sales Agent of Qatar Airways, said.

In the meantime, the RNAC management has prepared to increase the frequency of Kathmandu-Bangkok flights from two times a week to three flights a week. RNAC currently uses two of its allocated seven flights per week to Bangkok.

"The seat occupancy in the Bangkok flight has been encouraging, and this has built pressure for us to start an additional flight, which would begin from coming August," said the RNAC source.

Thai airways, the Thailand based international airlines company, had also sought permission from the Nepal government to increase its frequency of air flights to Kathmandu a couple of months ago.

The government then had allowed Thai Airways to operate five additional flights in co-ordination with the RNAC. However, the company is yet to begin the additional flights.

"We are looking forward to materialise the decision soon, but we cannot say from when we would be able to add the flights," says Viroj Sirihorachai, General Manager of the Nepal office of Thai Airways.

Govt expenses dip, trade deficit narrows, BoP negative

Post Report

KATHMANDU, March 29:The government expenditure, during the first seven months of the fiscal year 2001/02, recorded a slower growth due mainly to a curtailment of development expenditure as a result of sluggish revenue collection and an increase in the regular expenditure caused by the internal security problem.

According to a press communiqué issued by the Nepal Rastra Bank (NRB) today, of the total government expenditure amounting Rs 34.66 billion during the period, regular expense grew by 11.1 per cent to touch Rs 25.26 billion while the development expenditure declined by 11.6 per cent to Rs 7.92 billion. The growths of regular and development expenditure during the same period last year were 24.4 per cent and 9.3 per cent respectively.

During the period, the government sources rose by 5.9 per cent to Rs 28.35 billion as opposed to a rise of 19.7 per cent last year. Of this, revenue collection recorded lower growth rate of 4.1 per cent compared to a growth of 18.4 per cent last year. This was mainly attributed to the decline in import and slackness in the industrial, tourism and development activities.

As a result of the slow growth in the total government resources compared to that of expenditure, budgetary deficit increased further by 6.6 per cent to Rs 6.31 billion this year as compared to an increase of 17 per cent last year. In order to finance the deficit, the government mobilised foreign cash loan worth Rs 2.43 billion and issued treasury bills worth Rs 1.5 billion, Citizen Saving Certificate of Rs 418 million and development bond of Rs 1.09 billion. Moreover, the government used overdraft facility of Rs 937 million.

The National Urban Consumer Price Index, on point to point basis, increased by 3.2 per cent compared to a slower rate of 1.8 per cent observed during the corresponding period last year.

According to the release, of the overall price index, price of food and beverages rose by 4.1 per cent mainly due to the sharp rise of 9.1 per cent in the prices of vegetables and fruits as compared to a decline of 2.5 per cent during the previous year.

However, the price of non-food and services group slowed down by to 2.3 per cent during the first seven months from 6.8 per cent in the same period of the last fiscal year, states the release. The downfall of 1.7 per cent in the price index for education and recreation is the main reason behind the slow price rise in the non-food group.

During the review period, total exports registered a decline of 6.8 per cent to Rs 30.67 billion as compared to a growth of 22.3 per cent during the corresponding period of the last financial year.

The growth of exports to India grew by 31.4 per cent due to the higher exports of vegetable ghee, jute goods, copper wire, noodles, large cardamom, plastic goods, polyester yearn and pulses. However, the exports to third countries plunged by 37.3 per cent in absolute amount as a result of steep fall in major exports like ready-made garments, woollen carpet, and pashmina.

Similarly, the total import, during the first seven months of the current fiscal year, registered a decline of 9.3 per cent to Rs 60.86 billion as against a growth of 8.4 per cent during same period last year.

The import of textile, thread, rice, transportation goods, and spare parts, chemicals, cement, paper, agri-equipment, chemical fertiliser and other machinery parts from India went down. Similarly, gold and silver, edible oil, raw wool and silk, thread, transport and communication equipment and other machinery and parts from third counties tumbled.

In spite of the decline in the both export and import, the larger import base and slower decline of exports in comparison to that of imports, further narrowed down the trade deficit by 11.7 per cent to Rs 30.19 billion as compared to a decline of 2.3 per cent in the same period last year.

Based on the available balance of payments statistics for the first five months of the fiscal year, a steep decline of 56.8 per cent in service net resulted in a substantial increase in the current account deficit of about Rs 5 billion, despite sharp increase of 23.7 per cent in transfer net. Lower inflow of both official capital net and miscellaneous capital net could not meet the current account deficit. As a result, overall balance of payments remained negative by almost Rs 1 billion from the surplus of Rs 5.22 billion in the same period last year.

The foreign exchange holdings of the banking system declined by 3.5 per cent to Rs 102.26 billion as at mid-February 2002 compared to the same period last year and this has declined by 2.8 per cent from the level of mid-July 2001. Of the total reserve, 73.8 per cent was accounted for by convertible currencies and the rest by non-convertible currency.

The share market further shrunk during the review period, Nepse index registered a sharp decline of 19.9 points to 236.0 and the market capitalisation of the companies listed in the stock exchange came down to Rs 35.3 billion recording a decline of 8.4 per cent from the previous month. This was primarily due to the slackness in the overall economic activities caused by security problems and external shocks.

Nepal Festival at Bangkok kicks off

Post Report

KATHMANDU, March 29:A weeklong Nepal festival featuring Nepalese food, music, dance and culture kicked off in Bangkok, Thailand Thursday. The festival was inaugurated by Dr Krasae Chanawong, minister to the Prime Minister’s Office of Thailand, states a press release issued here today.

The festival is organised jointly by Royal Nepalese Embassy, Thai-Nepal Chamber of Commerce, Royal Nepal Airlines, Hotel Hilton International and Hotel Association Nepal (HAN).

Speaking at the opening ceremony Janak Bahadur Singh, Nepali Ambassador to Thailand, said that Nepal harbours some of the unique natural and cultural features which are not available elsewhere in the world.

He even described the festival as a ‘small window to the manifold attractions of Nepal’, where visitors could experience the natural and cultural beauties of Nepal, states the release.

Narendra Bajracharya, president of HAN, stressed on the need to carry out promotions in Nepal to attract a good part of the two million strong visitors who visit the Thai market.

HAN and Thai Travel Agents Association (TTAA) have agreed to work jointly to promote various products of Nepal in Thailand to inspire Thai people to visit Nepal. HAN also invited Thai agents and tour operators to visit Nepal on a fam trip.