Govt indecision grounds investment in int’l airlines

By Satyendra Timilsina

KATHMANDU, Feb 4 : The government has not finalised the licensing process of international flight carriers that was initiated some two and half years ago, blocking millions of rupees of the private sector, which shows its inefficiency.

In August 2000 four Nepal-based airlines were declared eligible for the operation of international flights – both long haul and short haul – from Kathmandu. The cabinet then, had asked the Tourism Ministry to license two airlines with consent from the Royal Nepal Airlines Corporation (RNAC).

The qualified companies for long route flights with a minimum of three flight hours, technically known as Category A, are Shangri-La Air and Aero Nepal. Similarly, the eligible companies for short haul flight are Cosmic Air and Nepal International Airlines.

These companies after the acceptance of their proposals had submitted cash deposit of Rs 500,000 as flight royalty and Rs 5 million as security bond in Bank. The security bond deposited in banks for two-year term expired on September 27 last year.

The licensing process was delayed due mainly to the indecisiveness of the RNAC management, said a high level official, adding that the RNAC did not agree to allow new operators in its flight zone.

According to the ministry source, most of applicants had asked for permission to operate flights in ten different routes, mostly to Indian cities of Delhi, Bombay, Lucknow, Baranasi, Bangalore. Other destinations of their interest are Colombo, Paro, Myanmar, Bangkok, Osaka, Sharjhah and Lhasa among others.

The official informed that the government is positive to issue license to operate in new sectors, but not in existing ones in which the RNAC is operating its flights. "The government will have to safeguard national flag carrier," the source added, saying that the new airlines should create markets on their own.

The applicants, however, say it is the burning example of Nepalese decision-making system. There have been four tourism ministers – Tarani Datta Chataut, Omkar Shrestha, Bal Bahadur KC and Kuber Sharma – since the process was initiated, but none of them has shown any seriousness towards the long-ending issue, they add.

"Millions of rupees of the private sectors’ has been blocked by the government," says Bharat Singh Thapa, promoter of Aero Nepal.

"We are ready to begin the flights immediately, if license is awarded," he said adding, that his company has already prepared to acquire one aircraft. The next one, the wide-bodied aircraft will be brought within the next two years.

Not only Thapa, but also Birendra Bahadur Basnet, promoter of Nepal International Airlines stressed that the government should decide on the issue without any delay. "We are ready to operate flights," he said adding that the government’s indifference to the issue has blocked more than Rs 8 billion of the company.

If the decision comes into enforcement, the first category holding airlines will have to fly with at least one wide-bodied and one narrow-bodied aircraft. Similarly, the second category holding airlines will have at least one-jet-engined narrow-bodied aircraft.

The process of licensing airlines for international flights began after the unprecedented incident of Indian aircraft hijacking in December 1999. Earlier in 1996, the government had allowed five different airlines to operate flights in international routes. But Necon Air is the only airline that operates international flights to the Indian cities.

FNCCI stresses to expand trade with Pak

Post Report

KATHMANDU, Feb 4 : Office bearers of the Federation of Nepalese Chambers of Commerce and Industry (FNCCI) at a meeting with Nepali Ambassador to Pakistan, Pushkar Man Singh Rajbhandari, today stressed for a need to expand bilateral trade, joint venture and economic cooperation with Pakistan.

Binod Bahadur Shrestha, acting president of the FNCCI said that the bilateral trade volume with Pakistan was small and the federation was ready to expand trade relationship with Pakistan.

"Although such an effort is being made through the joint economic council of the business community, similar initiatives should come from the diplomatic level as well," he said. Shrestha further asked Ambassador Rajbhandari to put in efforts to secure recognition of Nepali rules of origin in Pakistan and ensure easy access of Nepali goods to the neighbouring market.

He also laid emphasis on frequent organisation of bilateral trade fairs and exchange of delegations and information to boost the inter-country trade volume. Office bearers of the FNCCI also asked Ambassador Rajbhandari to make efforts to slash the customs tariff, transportation and transit costs for Nepali exports. Products like ginger, yellow lentils, herbs, tea and cardamom, among others are potential exports of the country.

They also said that Nepal could welcome Pakistani investment in areas like leather goods, readymade garment, pharmaceutical and banking sectors, among others, states a press release issued here today. Addressing the office bearers of the FNCCI, Ambassador Rajbhandari, expressed commitment to put in his level best efforts to expedite economic diplomacy.

Stock market shows ‘bullish’ trend

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KATHMANDU, Feb 4 : In a continuance to Monday’s sharp rebound in the secondary market confidence that pushed up the Nepal Stock Exchange (Nepse) index by over 9 points in a single day, the barometer to investor’s stock confidence today leaped by 12.65 points. Such massive increments in index come after a gap of almost three years.

Such a continuous and historic increment in index for two consecutive days comes primarily as a result of the cease-fire announced by both the government and the Maoists last week to end the spate of violence that lasted for almost seven years. Market monitors anticipate a further rise in the confidence of investors in the days to come.

"The waned confidence now is back on track. Further rise in stock prices and the Nepse index should not come as a big surprise," said stock experts. "The promise of both the warring sides, namely the government and the Maoists, to stop the domestic violence is the primary reason for a rise in market confidence."

Against the stock index of 213.30 points of Monday, the index at the close of floor trading on Tuesday touched 225.66 points. The Nepse index, which was below the 200-point mark over a week back, had only been at 203.54 points at the end of weekly trading last Friday.

With today’s gain, the market capitalization of stock, which measures the wealth of listed stock, grew by 4.68 per cent, much to the relief of investors whose wealth had been on a continuous erosion for over two years. Against the stock capitalization of Rs 34.6 billion on Monday, the market value of stock today rose to Rs 36.66 billion.

The major reason for such a rise in the prices of stock and the index is due to a sharp increase in the share prices of commercial banks. Fluctuations in the bank stock directly has an impact on the overall stock index and market capitalization since the commercial bank group commands a lion’s share in the total Nepse trading.

However, despite the overwhelming claim for the cease-fire being the prime factor behind the stock price rise and index increment, some experts are of the view that such bullish outlook in the stock market is partly due to investors’ anticipation of dividends. Many of the commercial banks are preparing to close their annual financial accounts soon.

Experts said that such a double-digit index increment in a single day after a long spell is due to the rush of investors to the stock market for ‘buying’. A substantial amount of cash must have been lying in the hands of investors, especially because of the fact that even commercial banks lately are providing low rate of return, they said.

Nepal’s stock market performance had been on a continuous downhill since a single-day market crash that saw the index spiral down by over 22 points in February 2001. The stringent banking directives issued by the central bank and the imposition of a state of emergency to quell the Maoist insurgency in November 2001 are the reasons for a continuous fall in the stock index.

Despite the gains made by Nepse in the last two days, the stock market is way below what it had been over two years back. The index that closed at 225-plus points today had once touched an all time high of over 545 points, when the market capitalization of stock had crossed over Rs 65 billion.

Officials emphasise on strengthening monitoring

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KATHMANDU, Feb 4 : Officials of the National Planning Commission (NPC) stressed for a need to bridge an existing information gap between executing agencies, ministries and NPC to beef up monitoring of development projects.

"There still exists a great deal of mismatch between the information sought and supplied among ministries and the NPC. This has overshadowed monitoring aspect," they said.

They said this while speaking at a daylong workshop seminar on proper placement of data, its presentation and use of log-frame organised by the NPC here on Tuesday. Twenty-five senior officials from various ministries and government departments attended the training.

Inaugurating the workshop, Dr Shankar Sharma, Vice-Chairman of NPC highlighted the importance of monitoring development projects for their effective management and delivery of desired output. "The mismatch between actual status and information provided on projects has been misleading the overall output of the projects," he said.

He asked the concerned officials overseeing the development projects and submitting their performance reports to maintain alertness and to be efficient. "The efficiency on the matter is of high significance, especially as the NPC is developing performance monitoring indicator to keep in track of effectiveness of development projects," he said.

Dr Yuvraj Khatiwada, member of the NPC, said that dissemination of correct information through the monitoring report bears further significance as the government would not release budgets to the projects which fail to meet 80 per cent of objectives in a specified time frame.

"The filling up of various monitoring forms and log-frame that the NPC has developed is a technique of measuring the physical output and these should be filled with care and appropriately for doing justice to development efforts," he added.

A separate daylong workshop seminar on the same topic would be organised on Wednesday as well, the NPC officials said.

Ineffective decentralisation marring dev activities

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KATHMANDU, Feb 4 : Stating ineffective decentralisation of development activities as the main cause of the slow economic progress, Dr Shankar Sharma, Vice-Chairman of National Planning Commission (NPC) has stressed on the need of empowering the local bodies in order to expedite development of the country.

"Unless the development does not take place at grassroots level, no matter, how many plans you make, the country cannot get the much-needed implementation of planned activities," he added.

Speaking at an interaction on "Plan Implementation and Poverty Alleviation" here today, Dr Sharma stressed on the need of introducing proper monitoring mechanism in the planning and implementation level, which could be largely supportive to tracking the planned activities directly.

"Despite adverse situation our bureaucracy is gradually becoming stronger," said Sharma.

Unlimited Numedia resumes MT training

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KATHMANDU, Feb 4 : The months long row between the Unlimited Numedia (UM), a private IT company, and the Employment Promotion Commission (EPC), has ended after the commission released the blocked amount that the Unlimited Numedia is entitled to.

With the decision to release the amount, the unlimited Numedia has resumed imparting medical transcription (MT) to over 1,000 trainees who are entitled to two-year employment upon successful completion of a year long training.

The row between the EPC and the UM had erupted after the commission stopped releasing training fees amounting over Rs 400 thousand about four months back. The company had broken training citing reasons of financial crunch after the blockade of its entitled amount.

The UM had signed an agreement with EPC to train and recruit at least 1500 youths in medical transcription last year. Prior to the initiation of the training last year, the government had promised to support each trainee with a loan assistance of Rs 25,000 upon the completion of the training.

"We have resumed the training course as per our schedule following the release of due funds from the government," said Allen Tuladhar, Chief Executive Officer of UM. The training in MT which was carried out in Itahari, Kathmandu and Pokhara was suspended after the EPC failed to release the promised funds to UM.

"Since the EPC did not provide us with the funds as per the agreement, we were compelled to stop our training," added Tuladhar. The government, with an aim to promote employment for youths had introduced such medical transcription training last year after UM agreed to train 15,000 youths.

Subarna Man Shrestha, member-secretary of the EPC said that the government always has been positive to resuming the training as soon as possible. "Though we failed to release funds as per our agreement to UM, we always made effort to continue the training," he added.

Tourism promotion campigan to be held in four major cities

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POKHARA, Feb 4 : Tourism entrepreneurs of Pokhara have announced to begin campaigning for ‘Let’s Visit Pokhara’ festival in four of Nepal’s major cities from February 7.

The announcement was made recently by the Regional Hotel Association Pokhara. According to the information given by the Association, the festivals would be conducted in Kathmandu, Biratnagar, Dharan and Birgunj.

The festival is being conducted from the past one month in order to attract more domestic tourists to Pokhara, the tourist hot-spot of the country. After the completion of the first phase of the campaign for the festival, the tourism entrepreneurs have announced this campaigning.

The first part of the festival will be carried out in Kathmandu on Feb 7 and 8. After that, the festival will be conducted in Biratnagar on 9 and 10, in Dharan on 12 and 13 and in Birgunj on Feb 15. After the completion of the programme in these four cities, the festival will be taken to all other major cities of the country.

Altogether 30 stalls will be kept in the festivals, displaying industrial produce and handicraft of Pokhara and information of touristic sites in Pokhara.

Environmental loan programme tied in procedural knots

By Pratap Bista

HETAUDA, Feb 4 : Loan assistance programme of Environmental Sector Programme Support (ESPS) project of Danish Government in Nepal has failed to satisfy the environment-conscious industrialists in this district due to impractical and lengthy procedures.

In order to assist the environment-friendly production in the factories and to contain the industrial pollution, the ESPS has a policy for providing loan assistance at a minimal interest rate of 1.5 per cent. But the complicated procedure has made industrialists reluctant to obtain the loans.

Operating in Hetauda from 1999, the Danish project has been able to attract only three industries till now. The loan amount taken by those industries is only Rs 2 million. And nobody has received environment-related grant from the project yet.

To obtain any loan assistance from the project, the industries have to submit a bank guarantee and a guarantee of the return from the investment made out of the loan.

"First of all such requirements dishearten the aspiring entrepreneurs," remarks Chintamani Upreti, General-Secretary of Hetauda Industrial Area Industry Association. "Almost all the industries are struggling hard to manage even the running capital, let alone asset to be deposited as bank guarantee."

"We cannot keep the fixed asset within the industrial area as a bank guarantee. And we do not have other fixed asset for the purpose as all of them are already deposited as guarantee in some banks," said Upreti.

The Danish Government had disbursed Rs 200 million for assisting industries with subsidized loans to adopt environment-friendly production process and reduce the industrial pollution.

However, the ESPS admits its failure in the proposed loan assistance programme. "In the past four years, loans have not been disbursed and investment has not been made in environment-friendly projects as proposed," said Kalyan Bahadur Pradhan, Advisor of ESPS.

Pradhan also conceded to the fact that almost all the industries here are in weak financial condition and added that proposals have been submitted to the concerned donor agencies to simplify the procedures for loan.