DTT refuses to pay compensation, but says ready for negotiation

Post Report

KATHMANDU, Jan 28 : In its first official response to the compensation claim of Nepal Rastra Bank (NRB), the Delloitte Touche Tomatsu (DTT) has refused to pay the compensation demanded by the NRB for the financial loss incurred from unilateral breach of agreement by the DTT.

According to a highly placed government source, despite the refusal, the DTT, in a letter sent to the central bank last week, has urged the NRB to initiate negotiations to find out an amicable solution of the problem.

Despite the readiness of the DTT to negotiate for amicable solution, dispute regarding the venue of the negotiation is not settled yet. According to the official, the NRB has been maintaining its stand that as per the final agreement, Kathmandu should be the venue for the negotiation, whereas the DTT has refused to come here citing fragile law and order situation of the country.

However, the source said that the meeting of the Board of Directors of the NRB would make necessary decisions on ending the impasse and sketch strategy that the NRB would adopt during its upcoming negotiation. He said that the negotiation would begin within a month and it would probably be the last bid to find an amicable solution to the problem.

Earlier, on the first week of January, the NRB had sent a letter to the DTT claiming around Rs 500 million compensation from the DTT for the financial loss incurred from unilateral breach of the management take-over contract of Rastriya Banijya Bank (RBB) by the DTT.

The DTT, which had signed a contract with NRB in January last year to take over management control of RBB, unilaterally breached it six months ago on the grounds of weak security condition of the country. The NRB has claimed that the action led to huge losses due to DTT’s initial delay and eventual cancellation of the management take-over contract.

The NRB in its claim had earlier asked the DTT to either compensate the contract value signed between the NRB and DTT or substitution value that the NRB has to bear while constituting a new management team for the RBB.

Earlier in October, as per the provision on dispute settlement contained in the agreement, the DTT had asked the NRB to send its delegation to Bangkok for amicable settlement of the problem. But the NRB rejected the proposal since the final agreement clearly stated that Nepal would be the venue for negotiations, if any dispute arose.

As per the agreement, both the parties are first required to initiate negotiation for amicable solution to the dispute. If that fails, then both parties will go for arbitration. Either party can go to court, if the arbitration settlement fails to satisfy them.

The government had to bear a huge financial loss due to unilateral cancellation of the agreement. According to a report, the RBB alone had to bear a loss of around Rs 10 million a day due to the unnecessary delay in the process. The breach of trust of the DTT also played a crucial role in weakening the financial condition of the bank due to which the non-performing assets climbed to 48 per cent.

Apart from the direct financial losses, the delayed management hand-over process also slowed Nepal’s entry into International Monetary Fund-sponsored Poverty Reduction and Growth Facility (PRGF). With the entry into the PRGF, Nepal would get Rs 20 million of annual aid to be used in launching anti-poverty programmes and other reform processes for next three years.

Sherpa, Rimal appointed RNAC directors

Post Report

KATHMANDU, Jan 28 : The government has appointed Ang Tshering Sherpa, a leading tourism entrepreneur and Madhav Rimal, editor of Spotlight Weekly and a Hariyali Nepal Party leader, as the directors of Royal Nepal Airlines Corporation (RNAC).

Their appointment has created a rift among the tourism entrepreneurs as it is said to have breached the norms of RNAC Regulations, 2019 for the appointment of its directors.

Sources say that a heated dispute rose over the appointment of Rimal inside the ministry. Rimal had contested for Member of Parliament from Kathmandu constituency two from Hariyali Nepal party.

Ang Tshering Sherpa is the president of Nepal Mountaineering Association and also owns Asian Helicopter Company. Sherpa is a well-known figure in Nepali tourism sector.

The two positions had remained vacant since past few months after the then directors Atal Sher Rai and Keshar Bahadur KC were forced to resign from their posts due to controversy raised over their appointment.

The Commission for the Investigation of Abuse of Authority (CIAA) then had asked the RNAC management to take necessary actions, stating that they were under-qualified for RNAC directors. The CIAA had then questioned over their academic qualification and professional expertise.

While KC was said to be the nephew of then Minister Bal Bahadur KC, Atal Sher Rai was a friend of then State Minister Sarbadhan Rai.

Mega IT exhibition concludes on grand note

Post Report

KATHMANDU, Jan 28 : CAN Info Tech 2003, which began on January 23rd and concluded here today, might have certainly failed to gain approval of some disgruntled young visitors. Nonetheless, when it comes to describing in a single sentence as to how the event fared, then ‘the information technology show was a grand success, proving to be much more than initially thought of’.

Annually held since 1995, the mega-information technology (IT) event of the country this year, the third one held at the Birendra International Convention Centre (BICC), attracted more visitors than what the organiser, Computer Association of Nepal (CAN), had expected. The initial target of 150 thousand visitors was met at the end of the fifth day itself, with the total number of visitors hovering around 200 thousand at the end of the event.

And if that astounding size of visitors is not enough to prop up your eyebrows, the total number of participants in the show, including all VIPs and invitees who were issued with special entry passes, is certainly much larger, say organisers. Only a little over one hundred thousand visitors had visited the last year’s CAN Info Tech.

One factor that has contributed tremendously to the grand success of the event was the overwhelming response of the younger generation, mostly students. The Rs 100 tickets charged today, which was meant to be a day for ‘business’, could in no way deter students from visiting the show.

A huge mass of aspirant student visitors could be seen thronging the gates of the BICC with hopes of possible discounts that they got on the first five days of the IT event. Realizing that they would not gain access into the show without paying Rs 100 for a ticket, against a discounted charge of Rs 25 on the earlier days, they did what they had to do. "Most purchased the tickets."

"I came to the Info Tech with an ‘advertisement-cutting’ hoping of availing a 50 per cent discount on Rs 50 entry fees, the previous charge for tickets. However, I found that the entry fee today was set at Rs 100. I had no choice but to pay Rs 100 to gain access," said Rupen Maharjan, a 19-year-old management student.

Even organisers concede that the rush of students in the last day of the show came as a big surprise. "The last day of the Info Tech was reserved only for business purpose. Though we did not offer any kinds of discounts on entry today, students responded with much zeal and came to the show paying the entry fees," said Biplav Man Singh, first vice president of CAN, talking to The Kathmandu Post.

Not just the organiser, but even the Info Tech exhibitors were fascinated by the battery of queries put in by students. "It is interesting to see such a huge influx of students willing to know about computers, IT and IT-related courses," said Anupama Gurung, Accounts Executive of New Horizon, a computer institute. "We received tremendous response in the first five days, and continue to do so even today."

One thing that is clearly evident from the present rush is that it would be difficult to accommodate next year’s CAN Info Tech at the present venue. "No doubt, BICC is the largest venue for expositions in Kathmandu. However, going by the present trend, if CAN Info Tech next year is to accommodate the demands of both exhibitors and visitors, then certainly a larger venue would be needed," said Pratap Singh, a second-time visitor to the event.

One of the important factors that led to such a success of the mega-IT event was due to whopping discounts offered in computers, computer accessories, IT-related educational and training courses, among others. "If one can get a printer at half the cost, a pentium-4 computer at over 40 per cent discount, and IT-related training and courses at cheap rates, who wouldn’t want to come to the Info Tech," said Bhaskar Shrestha, a computer professional and one of the exhibitors.

Government rapped for centralising dev activities

Post Report

KATHMANDU, Jan 28 : Participants in an interaction today lambasted the government for centralising development activities thereby discouraging local governance, which has adversely affected the entire decentralisation process.

Speaking in an interaction on "Improvement on Self-Governance Regulations" organised by the Federation of District Development Committee, several speakers pointed out the need of empowering the local bodies in order to advance the country to development.

"There is a need to attaching more importance to empowering the decentralisation process in the current circumstances, when most of rural and remote parts of the country are badly hit by Maoist insurgency," said one of the participants in the programme.

Referring to the current mechanism of the government, Dr. Hikmat Bista, an expert on decentralisation process, said that failure on the part of the government in effective decentralisation has deprived the general people of democratic values.

"Democracy itself does not have any meaning, if it is not backed up by effective decentralisation," said Bista. He also termed the present mechanism of decentralisation as ‘ineffective’.

"The set planning of decentralisation can only be implemented effectively, if the government allocates fund to the local bodies as per the importance, but it is wanting in our present context," added Bista.

Other speakers including Mohin Limbu of National Federation of Village Development Committees and Bidur Mainali of Federation of Nepali Municipalities urged the government to become flexible in delegating authority for mobilising revenue in local level.

"The government should not impose its central policies in local level as such policies always have failed to achieve the ultimate objective," they said. "Local bodies themselves should be empowered to decide on any case of regional importance," they stressed.

Similarly, Rajendra Prasad Pandey of Communist Party of Nepal-Unified Marxist-Leninist (CPN-UML) also said that the effective decentralisation always plays a vital role in expediting development activities. "No matter any degree of efforts the government puts, the development of the country always remains on backside unless effective decentralisation is properly implemented," remarked Pandey.

Other participants including Hom Nath Dahal of Nepali Congress (Democratic) and Govinda Khaniya of Rastriya Prajatantra Party also expressed similar views on the occasion.

First half revenue mobilisation encouraging

Post Report

KATHMANDU, Jan 28 : The total revenue mobilisation during the first six months of the current fiscal year has given some relief to the government as the amount collected was six per cent higher than revenue raised in the same period last year.

According to government statistics, a total of Rs 23.43 billion has been mobilised as revenue during the first half of the current fiscal year 2002/03 against the collection of Rs 22.10 billion of the corresponding period last year.

Of the increment in the total revenue mobilisation, the tax revenue has shown an increment of 5 per cent and the non-tax revenue went up by 11 per cent. The increment in non-tax revenue has been the result of higher growth of indirect taxes including that of customs and value added tax (VAT).

The statistics shows that the customs revenue collection rose by six per cent during the review period against an increment of eight per cent in the mobilisation of VAT, the main source of indirect tax in Nepal.

The increase in the volume of imports during the period is the major reason behind the rise in both customs and VAT revenue collection. Besides, the army deployment at various customs points coupled with the raid carried out by the Commission for the Investigation of Abuse of Authority (CIAA) last August has also helped in raising revenue mobilisation.

The CIAA had detained 22 revenue officials suspected of amassing huge property by misusing power. Experts believe the action has helped to some extent in plugging the revenue leakage.

During the review period, the customs tax collection went up to Rs 6.4 billion against the revenue collection of Rs 6 billion in the like period last year. In the like manner, the revenue collection from VAT rose to Rs 6.2 billion from Rs 5.8 billion collected during the same period of the last fiscal year.

Despite an increment in revenue mobilisation from VAT, experts still point out that inefficient billing system has marred the government’s effort to develop VAT as the main source of revenue collection.

The highest surge in revenue collection has come from the mobilisation of excise duty. The customs revenue mobilisation during the period increased by 34 per cent. The rise in the excise duty is the effect of increase in production of liquors in the past.

The experts point out that the heavy increase in the production of beer and the whisky as the major reason for the increment in revenue mobilisation from the customs duty.

The non-tax revenue that chiefly consists of fines, royalties and the gains to the government has also shown an increment of 11 per cent, pushing the revenue levels to Rs 4.6 billion, up from Rs 4.1 billions of the last year.

Despite an increment in revenue mobilisation from major tax sources, the revenue collection from the vehicle tax and the direct taxes has plunged. The revenue mobilisation from the incomes of an individuals and corporate houses went down. The government through the last year’s budget had increased the exempt limit for individual taxpayers.

The revenue mobilisation of the direct taxes has slid to Rs 3.2 billion during the first six months of the current fiscal year from Rs 3.71 billion mobilised during the same period last year.

The contribution of customs tax to total revenue collection, which used to be around one-third of total, during the first six months of the current fiscal year, has slipped to 27.29 per cent. The VAT, which the government determined to develop as a backbone of tax administration six years ago, contributed 26.57 per cent to the total revenue collection.

Tourism entrepreneurs should change their concept: Experts

Post Report

SAURAHA, Chitwan, Jan 28 : When domestic tourism business is facing steep decline, tourism experts have pointed out the need of running the business with changed perception to bail it out.

"Nepali tourism entrepreneurs need to change their worthless concept of treating only ‘white skinned’ persons as tourists," experts said in an interaction on "Regional Seminar on Developing Domestic Tourism" held here.

During the programme, various experts claimed that no progress could be achieved in promoting Nepali tourism industry in international market unless domestic tourism receives deserved response from the local tourism entrepreneurs.

Highlighting the importance of domestic tourism, A G Vorstenbosch, a Netherlands-based Internal Tourism expert, said that successful domestic tourism business will always be supportive to promote the local tourism destinations in international arena.

"Domestic tourism always can act as a leverage. A little bit of success in national level would support to stretch the local tourism market to international level," he said.

Inaugurating the programme, Ratna Kaji Bajracharya, Chief District Officer of the district, laid emphasis on promoting the domestic tourism, which has been on sliding trend in recent years.

"We should be bold enough to change the traditional mentality of responding only western people as our tourists," said Bajracharya. "Domestic tourists are equally vital for safeguarding the business, which has till now largely been supported with the foreign currencies".

Besides bringing change in traditional mentality, various experts including Vorstenbosch also stressed on improving the quality of service from local entrepreneurs. "Poor hospitality has brought more woes to this industry at a time when it is facing downward trend," Vorstenbosch said.

"Most of the five-star hotels of Nepal do not provide the expected service as such classes hotels need to deliver," he added. "The big five-star hotels here cater service as that of two-star hotels. And how would you expect the growth of tourism industry, when local hoteliers find hard even to cheer their guests with smile," he questioned.

Ram Prasad Shrestha, a representative from industrial sector, suggested for timely improvement in tourism-related services. He also stated that the growth of tourism industry could only take place when we can successfully market our beautiful destinations and provide quality service.

Around fifty hotel entrepreneurs had participated in the programme jointly organised by Narayangarh Chamber of Commerce and Industry, Chitwan Tourism Development Committee and the Netherlands Management Co-operation Programme.

Business fair to be held in Pokhara

RSS

POKHARA, Jan 28 : West Regional Industrial Business Fair is to be organised at Pokhara in the first week of March under the joint auspices of Ministry of Industries, Commerce and Supplies Export Promotion Committee, Kathmandu Chambers of Commerce and Industries and Pokhara Chambers of Commerce and Industries.

The fair targets at promoting industrial products by providing opportunities for the products to reach among consumers.

The fair is expected to help promote internal tourism, bazaar management, transportation and industrial situations of Pokhara.

Different items and products related to handicrafts, agriculture, floriculture, auto-information technology, governmental and non-governmental activities and others will be kept for the exhibition.

Different cultural shows, concerts by renowned artistes, dance competitions, lottery and bumper schemes and other entertaining programmes will be performed so as to attract more participation.

A 151-member co-ordination committee has been constituted with Pokhara Chambers of Commerce and Industries Chairman Krishna Tamrakar as the chief for the better management of fair. About 200 stalls are expected to be in the fair.