NOC in dire need of Rs 1.5b to buy oil

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KATHMANDU, Oct 29:Following a massive loss due to disparity in import price, Nepal Oil Corporation, the state-owned monopoly in the imports of petroleum products, has asked the government for Rs 1.5 billion for importing petroleum product for the month of November.

"The NOC, in its formal request submitted at the ministry, has asked for the sum to secure the petroleum supply for the next month due to its rapid depletion in its fund," said sources at the Ministry of Industry, Commerce and Supplies (MoICS).

The amount sought by the corporation is for settling the import account for the month of November, which needs to be cleared by mid-December and also for importing the crude oil from the international market. According to sources, currently the NOC has a fund of Rs 1.15 billion only, while it needs to pay Rs 1.75 billion to import oil alone to the Indian Oil Corporation (IOC).

"The corporation’s fund is short by Rs 600 million for settling the import’s value, although the figure might change depending on the revenue collected from the sales during the month of November," he added. The NOC’s monthly revenue generated from the sales stands at Rs 900 million maximally.

Besides, it has a due of some Rs 300 million to be cleared to the IOC apart from other dues like clearance of duties which further crosses over Rs 300 million mark, according to the source. He also informed that the corporation’s past financial records are currently being audited and this is likely to fuel its liability in the form of bonus to the employees for the profit it generated during the previous years.

"If not the whole of the requested amount, the NOC has sought immediate releasing of at least Rs 600 million needed for the petroleum imports," the source added. The latest mess in one of the strongest public enterprises in terms of financial status has cropped up in the wake of deregulation of administered pricing mechanism in India in April.

While the petroleum price in India has been shooting up to maintain the import price parity every fortnightly, Nepal has been losing to a constant price since last couple of years. "This has resulted in founder in the financial status of the NOC," said officials.

Owing to the price difference with the supplier across the border, with price being on a lower side in Nepal, the NOC had been claiming of incurring a loss of over Rs 10 million a day and a massive outflow of kerosene, the heavily subsidised principal household fuel. The loss is said to have soared to Rs 20 million per day from this month due to rise in the price of kerosene in the international market.

Although sales of petrol yields a profit of Rs 5 per litre, the NOC is incurring a loss of Rs 8 per litre of kerosene and Rs 6 per litre of diesel. This has been widening the gap on cross-subsidisation, resulting in a whopping loss for the corporation.

The NOC has been adjusting the losses it incurred from its fund and the officials had warned of possible inability of importing petroleum products with its own fund if the loss continued.

They also argued that the government, which shares the profit of the corporation in good days, must come to its assistance at the time of adversity. "The government must raise the petroleum price or bear loss," they stated.

Perceiving this possible threat, a Petroleum Price Review Committee (PPRC) formed by the government, in its report submitted to the government a couple of months back, had presented the government with three alternatives to deal with the problem. It had basically recommended for increasing the price making it on a par with price across the border. However, the recommendations have not been implemented as of now, the officials lamented.

Nepal excellent market for leather products: Queber

By Sameer Ghimire

KATHMANDU, Oct 29:S. Queber, a Pakistani businessman visited Nepal for the first time to participate in the Fourth SAARC Trade Fair and to promote the business of his leather products in Nepal as well as in the region. He landed in Kathmandu thinking that he would be more than happy if he succeeded in selling at least half of the total leather products that he had brought from Pakistan during the five-day long fair, which concluded today.

However, he was pleasantly surprised, when his stall, which had a wide-range and collection of leather products worth around Rs 1,35,000 ran out of stock within just two days of commencement of the fair. Excited by the unexpected response and apparently lucrative leather market, particularly by the local consumers, Queber aims to join hands with local entrepreneurs for expanding his business.

Like Queber, other participating entrepreneurs from other regional countries were also upbeat with the enormous turnout of consumer public in the fair due to which goods in the most foreign stalls were running out of stock on the concluding day. With such large turnout of Nepali consumers in the fair, most regional entrepreneurs have reckoned Nepal as a potential market and in private meetings with the local businessmen, the businessmen from other SAARC countries showed no hesitation in expressing their immense interest to join hands with local businessmen.

As in the line of many businessmen, an official of Trade Promotion Centre (TPC) claims that the five-day trade fair was able to meet its objective of bringing the regional business communities together to accelerate the regional trade and businesses.

Tej Singh Bista, Chief Officer at the TPC informed The Kathmandu Post that many big industries of the region have been amazed to know the drastic expansion of Nepali market. "Many industries based in the SARRC region now want to expand their market in Nepal as they found the local market to be growing far more than their anticipation," adds he.

Most business representatives from the region conceded that the domestic retail business was amazingly higher than their anticipation. "At a time when global consumption is slipping due to the lingering economic slow down, we were not expecting such big crowd with impressive consumption expenditure," says N. Abedin, businessman from Bangladesh. He too has a good story of his own as more than 150 fabric bags that he brought from his country were sold out in the fair.

Likewise, Hakim M. Usman of Pakistan sees Nepal as a big market for his herbal products. "When I went Colombo, the capital city of Sri Lanka, to participate in similar trade fair, the public response was less than expected but the situation here is completely different. We are really surprised to see large crowd interested in our products," he adds and says that "Rose Water", a product of his Marhaba Laboratories, sold out like hot cakes within two days.

Many experts, who were closely watching this fair, accept that the fair has been able to generate more retail business than was expected. Bista of the TPC also keeps the similar views, but was unable to outline the exact amount of business turnout.

However, the delight was not the same for everyone, particularly to the Nepali participants. "Local consumers are more interested in stalls of other nations than ours," said Bina Devkota of a Nepali handicraft outlet in the fair. Despite a large crowd seen in the Nepali pavilion, only few outlets enjoyed satisfactory businesses.

While most participating countries were in the fair with special concentration on the retail business, India on the other hand had used the fair to expose its economic strength. "With our grand exposure, we want the other nations of this region to join us in order to share our business expertise," said P Laroia, Indian pavilion co-ordinator and Senior General Manager of India Trade Promotion Organisation.

But, the participants were not happy with the managing team. Some foreign participants complain that the organisers were not geared to service quality management to them. Queber complained that tools, tables and even hangers had to be hired from the local market for their stalls. Similar comments came from Ugyen Dorji, a representative from Bhutan. However, Bista labels the problems as ‘tiny’ and says the organising committee had tried its best to sort out such problems.

CAAN extends deadline to pay dues

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KATHMANDU, Oct 29:Following the request of domestic airline companies, the Civil Aviation Authority of Nepal (CAAN), has extended the deadline to clear payment dues, to Wednesday.

A high level source at CAAN, talking to The Kathmandu Post today, informed that the decision was taken after the private sector airlines asked CAAN to extend the deadline assuring that payments would be cleared by Tuesday.

The source further said that the latest decision has come after some of the domestic airlines companies cleared their dues in the past two days. "So far Karnali Air, Skyline Air and the Simrik Air have paid their due amounts," informed the source.

CAAN collected Rs 2.5 million on Monday and Tuesday from these airline companies. "As our motive is to collect the due amounts, it is a good sign that the airlines are paying the dues instead of forcing us to take action against them," the source added.

Director General of CAAN, in line with his official said, "The final meeting on the issue will be held on Tuesday." The domestic airline operators are positive to clear the dues,
he added.

CAAN had threatened domestic airlines companies, last Friday either to clear dues by Monday or be ready to ground their planes. CAAN then had decided to ground the planes of five domestic airline companies from Monday, as the first phase of actions.

CAAN is to collect more than Rs 420 million from the domestic airline companies, the biggest defaulters being Necon-Air and the national flag carrier, Royal Nepal Airlines Corporation.

The civil aviation authority on September 18 had published a notice stating that it would take severe action against those failing to follow the rules and directives. Many airlines have been defaulting in paying fees to CAAN and the latest action by the authority is intended to bring the companies back on track.

The September-18 notice had asked all aviation companies to clear their dues by mid-October. However, more than two weeks after the deadline, many of the domestic aviation companies are yet to clear the dues.

Only Buddha Air had cleared its dues before the deadline. The due charges are the fees for Parking, Landing and Hanger charges of the airline companies. The decision to take actions against the errant airlines companies is a follow up to that notice.

CAAN has been operating in loss since its establishment six years back. The yearly income of the Authority is about Rs 1.57 billion, with the total cash outflow at more than Rs 1.91 billion. The main earnings of CAAN are the charges levied on parking, landing and other rental charges on several domestic and international airliners.

The major liability of the CAAN is the yearly payment to the government. The Rs 2.66 billion invested in CAAN has to be cleared within 10 years, as per the understanding reached between the government and the CAAN authorities during formation of the new entity.

Meanwhile, Kishore Silwal, First Vice President of the Airlines Operators Association of Nepal (AWON) said that the domestic airlines companies are busy working on that issue. "We will come up with a new proposal that will be acceptable to the Civil Aviation Authority also," he said.

As almost all airline companies are facing financial problems, it may not be possible to clear all dues right now, he said adding, "We will try our best to find out an amicable solution for both CAAN and the private sector airline companies."

PATA awards NTB

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KATHMANDU, Oct 29:Pacific Asia Travel Association (PATA) and Business Traveller, Germany have selected the Nepal Tourism Board (NTB) to receive the PATA/Business Traveller Germany Vasco da Gama award for the year 2003.

According to a press release issued here today by the NTB, the selection was made by a committee comprised of key travel professionals from Europe and Asia/Pacific. The NTB has been selected for its outstanding work in the promotion and development of travel and tourism, states the NTB release quoting the October 25th press release of PATA European Division.

"The committee wishes to recognise the outstanding work the Nepal Tourism Board has carried out over many years, in the promotion and development of travel and tourism to the PATA region from Europe, to the positive actions the Board had undertaken to face the hard times the industry has been recently confronted with," NTB states quoting the PATA release.

PATA and Business Traveller Germany will present the Vasco da Gama Award for the Company to the NTB at the Annual PATA Germany Chapter Luncheon at Messe Berlin during the ITB 2003 to be held from March 7 to March 11, 2003.

"This award has further encouraged us to work even harder towards achieving our goals and objectives," NTB release quotes Pradeep Raj Pandey, the Chief Executive Officer of the NTB, as saying.

PCAP seeks COC Work yet to be completed

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POKHARA, Oct 29:Pokhara Commercial Auto Park (PCAP), which has been collecting the parking fee in the city going, against its agreement with Pokhara Sub-Metropolitan City (PSMC), has asked for a certificate of completion (CoC) prior to completing the management of the public squares.

Ashok Thapa, Chairman of the PCAP applied for the CoC at the PSMC last week while the construction of the public squares are yet to be completed. Going by the agreement signed between the PCAP and the PSMC, it can collect the parking fee after completing the management of eight cross-roads and acquiring the CoC.

It was also supposed to complete the construction within a year, as per the agreement. However, even after two years of signing the agreement the PCAP has not commenced the construction and management at a number of places. As of now, it has completed the management of the squares at Mahendrapul and Chipledhunga only.

Meanwhile, the PSMC has appointed Sharada Mohan Kafle to study the claim made by PCAP and verify the completion of work. "The report of Kafle would be studied first while issuing the CoC," said Shiva Datta Bhattarai, Executive Officer of the PSMC talking to The Kathmandu Post.

However, he declined to make any comments on the criticism made by the public, of PCAP defying the agreement. PCAP has been raising Rs 2 for motorcycle parking for an hour, Rs 5 for taxi for a day, Rs 10 for public transportation parking for a day and Rs 5 for private vehicles parking for a day.

Moreover, ACAP needs to pay Rs 7.10 million as a royalty to the sub-metropolitan city and spend Rs 4.54 million for managing the public squares, as per the agreement.