RNAC to hire Boeing 737 from Pegasus

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KATHMANDU, June 5 : The national flag carrier Royal Nepal Airlines Corporation (RNAC) has signed a deal with Turkey-based Pegasus Airlines to hire a 172 seater Boeing 737 aircraft on a short term lease for a month.

The new aircraft would fly on the schedules of RNAC’s Boeing 757 that is currently in Brunei for C-check. Of the two Boeing 757s that are used for the international flights of the corporation, only one is currently in operation

The said aircraft would land Kathmandu on Friday, informed a source of the RNAC. "The suspended flights – one to Delhi and one to Hong Kong – in the absence of one aircraft would resume from Saturday," the source said.

According to the source, the new aircraft would probably be used for some 150 hours. He stated that the lease charge for the aircraft is relatively lower, and much lower than earlier negotiations. In the previous hiring the RNAC used to pay up to US$ 3,300 per hour of flight.

In the meantime, the source informed The Kathmandu Post that the deal was finalised at US$ 2,700 per hour for the ACMI (Aircraft, Crew, Maintenance and Insurance) charge. The corporation received four different bids for leasing the aircraft, with the highest lease amount being US$ 3,700 per flight hour.

Sources said that the Corporation could not sign a deal in time, immediately after the aircraft went for maintenance in May 31st because of failed negotiations with another company. The corporation could not finalise a deal with the Dutch aircraft because of financial differences.

Unlike the previous practice of acquiring aircraft through a direct deal, the RNAC had called a tender for the delivery of an aircraft for the period of 7 weeks some one and half months back. The national flag carrier had initiated such process nearly two months before dispatching its Boeing 757 to correct the lessons learnt during its last routine C-check.

At that time, the RNAC had to suspend a number of flights after it failed to manage an aircraft for replacement of one of its Boeings sent for the check.

The C-check of Boeing engine is carried out for all sorts of repairing and necessary overhauling of several parts, other than the engine.

SEBO authorises amendment to Nepse by-law

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KATHMANDU, June 5 : Securities Board (SEBO), the regulatory authority overseeing the secondary market operations, has authorised Nepal Stock Exchange (Nepse) to make necessary amendments to a by-law formulated five years ago to accommodate debenture and bond trading.

SEBO’s decision today came in an effort to formulate a trading mechanism with Nepse so that an early listing of a medium-term financial instrument with a fixed coupon rate that was floated by Himalayan Bank Ltd (HBL) last year could be ensured.

According to an official, the decision was taken after almost a year of uncertainty over the listing of the 8.5 percent Rs 1000 HBL Bond 2066 that has a redemption period of seven years. The total issue is valued at Rs 360 million.

While the allocation of the 7-year redeemable bond was made as promised within the next three weeks of subscription closure last year, its listing with the Nepse lingered though it was asserted then that the bond would be enlisted within two months.

The delay in the listing of the bond had come due to a number of complications that would have cropped up if procedural trading aspects were not cleared beforehand. The problem especially related to transaction modality, taxes and the pricing of the bond, among others.

SEBO today directed the Nepse to adopt a ‘T+0’ trading modality for the purpose of bonds and debentures. ‘T+0’ trading system means that payments relating to bonds and debenture transactions would need to be settled the same day as the instruments are traded.

In the case of equity trading, the board directed Nepse to adopt ‘T+3’ trading system. So far, trading was carried out on ‘T+5’ basis, meaning that payments were made before the end of the fifth day of stock transaction.

Likewise, the SEBO directed that bond or debenture trading be carried out in blocks of tens in the case of Rs 1000 par value and in the blocks of hundreds in the case of Rs 100 par value.

Besides, in order to contain wide fluctuations in the pricing of shares, bonds and debentures, the SEBO also gave out a spread limit for quoting the price of securities.

While the quote for shares would not be allowed to fluctuate by over 5 percent of the previous closing price, the quote for bonds and debentures would not be allowed to deviate by 0.2 percent.

However, the actual price of transaction in the case of shares would have to contain within 3 percent of the earlier transacted price, while in the case of bonds and debentures such difference should be within 0.1 percent.

Until the latest changes take effect, the spread between two consecutive closing and opening prices would continue to remain at 10 percent. Likewise, the spread limit in consecutive transactions in the case of shares so far stands at 5 percent.

Listing of bonds, debentures and shares with the stock exchange are mandatory to ensure their liquidity. Non-listed financial instruments cannot be traded which results in locking up investors’ capital. The latest decisions were taken for the growth of the securities market.

India willing to establish IIT in Nepal

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KATHMANDU, June 5 : India has finally shown willingness to establishing an ‘Institute of Information Technology’ (IIT), a higher education institute for IT and bio-diversity, in the country with Indian investment.

An agreement to setting up the institute was reached between the two countries some two and half years back. Its set up was delayed due to escalating Maoist insurgency, according to government officials.

An Indian team entrusted with the responsibility for kick starting the establishment process arrived in Kathmandu today and the bilateral meeting on establishment procedures would commence from Friday.

"The meeting will select site of establishing the institute and thrash out a detail plan for infrastructure development," said Purushottam Ghimire, under-secretary at the Ministry of Science and Technology (MoST) and leader of the Nepali team.

India is said to provide technical and financial assistance worth Rs 1.30 billion for the purpose and the institute would be established in the Far-Western Development Region, as per the agreement. He further said that both the Nepali and Indian teams would jointly visit Kailali on Friday.

Tikapur, Mahakheti, Taranagar and Jakhor are the places identified as feasible sites for establishing the IIT in the district, according to a feasibility report submitted by a task force constituted earlier to identify the site for setting up the institute.

The meeting would continue for two days during which the two teams would review the concept paper developed so far. The paper would be a guideline to develop detailed project report, determine the assistance and outline the commencement of construction.

Ghimire further said that the government is mulling to develop the IIT as the best institute for students pursuing IT and bio-diversity education in South Asia. It would have an enrolment for about 1,000 students and would also provide short-term courses.

Kapilvastu requires tourism focus

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KAPILVASTU, June 5 : Though having high prospects for tourism, this district in the mid-Terai region of the country remains neglected, thanks to lack of publicity and government’s focus on tourism promotion.

According to Ramesh Sharma, immediate past chairman of Kapilvastu District Development Committee, the district awaits proper publicity for tourism promotion.

"The district has many places of touristic interest. But the government has not put it in its tourism promotion focus," he said.

The major attractions for tourists here are the royal palace of ancient King Suddhodhan, father of Lord Buddha, and the childhood playground of Buddha. Other major attractions are Niglihawa and Gorihawa pillars erected by the legendary Indian Emperor Ashok; Sagarhawa, the slaughter place of 66,000 Buddhist Shakyas; and Kudan, the court of King Suddhodhan.

There are several other cites of historical and archeological importance that remain to be explored, Sharma said. There are over 100 places that can be developed to attract tourists, he added.

Industrial effluent affects public health

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ITAHARI, June 5 : Locals here are facing the hazards of industrial waste because of lack of proper management of industrial effluent.

A score of industries in the Duhabi, Khanar and Sonapur areas of the district have been disposing their wastes in an unsafe way, polluting the sources of water, the locals complain. These wastes contain large amounts of hazardous chemicals, they claim.

As a consequence of water pollution, several dozens of cattle have died and many people have also started complaining about their health. Due to the hazardous chemicals, the sources of water are highly polluted, and the drinking water is no more potable, the locals say.

Mostly, the pollution is caused by soap, metal and leather industries operating here, according to the locals. "Because of the wastes released from the local Pioneer and United Leather Refining Industries, it has been difficult for us to stay at our houses," said Jhiglu Majhi, a resident of Duhabi-9

Another victim of industrial pollution, Gokarna Chaudhari, claimed that five of his goats have died after drinking poisonous chemicals coming from the leather industries.

Bhumi Chaudhari, ex-chairman of Duhabi-9, complained that his cattle died with symptoms of sore stomach and neck due to the consumption of poisonous water. The hazardous chemical wastes from the industries are drained directly into the local Tyangra and Budhi Rivers, the locals said.

Codex committee to be formed

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KATHMANDU, June 5 : The Department of Food Technology and Quality Control (DFTQC) is preparing to establish a National level Codex Committee.

Dr Tika Bahadur Karki, Director General of DFTQC said that the Department is now pushing for such a committee to be formed in a national level. "The committee will comprise representatives from the government, consumers, industries, agriculture and health among others," said Karki.

Codex, which stands for Codex Alimentarius Commission, is an international programme with representatives from 165 countries that sets standards on food.

"The purpose of the committee would also be to lobby for food standards during the meetings of Codex," said Karki. According to Karki, apart from a few meetings, Nepal has not actively participated in decisions of Codex.

The meetings held each year take suggestions from countries on standardisation of food products, which is then assigned to individual countries for developing science-based standards.

"Nepalis are yet to become aware of the Codex guidelines," said Urmila Joshi of DFTQC. She added that although Nepal became a member of Codex 25 years ago, very little work is done in the area of bringing the goods of the country up to Codex standards.

DFTQC has established a Codex hall, which is working as a contact point. The Codex Contact Point in Nepal stores information on food guidelines and receives news on any changes in standards.

Codex was created in 1963 by the Food and Agriculture Organisation (FAO) and World Health Organisation (WHO) to develop food standards, guidelines and related texts such as codes of practice under the Joint FAO/WHO Food Standards Programme.

Joshi said that the main purposes of Codex was to protect the health of consumers and ensuring fair trade practices in the food trade. "It also promotes co-ordination of all food standards work undertaken by international governmental and non-governmental organisations," she added.

LCCI aid for repairing repeater tower

LAMJUNG, June 5 (PR) - Lamjung Chamber of Commerce and Industry (LCCI) has expressed its willingness to provide a financial aid worth Rs one million for immediate repairing of damaged repeater tower of Nepal Telecommunications Corporation (NTC) in the district.

The district has been facing severe problem in the absence of telephone facility for one and a half-year after the Maoists destroyed the tower. The LCCI showed its willingness to help repairing the tower, as the concerned sector did not show any interest to repair it.

"Due to lack of communication facility, business has suffered a lot and it seems that we are living in the forest. We are ready to help repair it", said Dharma Bahadur Shrestha, president of MCCI.

He also pointed out that the tower could be repaired with a small budget, but no initiative has been taken to repair it yet.

"District administration office is trying its best to repair the tower as telecommunication is necessary for all", said Chandra Prasad Pant, Chief District Officer, adding that it has hit the maintenance of security and development activities in the district. According to an NTC employee, the damaged tower will not be repaired right now as until lasting peace is ensured.

Drop in Indian visitors to Birgunj

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BIRGUNJ, June 5 : The number of Indian tourists visiting Birgunj has dropped for the past two years thereby adversely affecting local business, which is already in a difficult situation as a result of gloomy national economy.

The low turnout of Indians has hit hard the local business and most affected among all are hotel and retail business of foreign goods.

Local businessmen, meanwhile blame illegal fee collected by bordering Nepali check post from outgoing Indian visitors for the recent downfall trend.

They blame police officials of Inarwa Police Check Post, located at the entry point to Nepal, for the dropping figure of visitors from the Indian side as they are accused of mishandling Indians by pressing them to pay extra money while they cross the border with any new goods.

"The malpractice of charging extra money on any new goods taken from Nepali side has discouraged Indians to visit Birgunj for shopping," said Sanjaya Giri, immediate past president of regional hotel association Birgunj. "A large number of potential visitors have also cancelled their shopping plan at Birgunj as they are made aware by some of Indian news web sites," added Giri, who also owns hotel Hira Plaza in Birgunj.

Another hotel entrepreneur, Pashupati Vikram Shah said that some Indians had complained him of Nepali police threatening to take them into custody if they did not pay certain amount. "And this unnecessary hassle has discouraged Indian visitors," he added. Local police are accused of asking Rs 50 for a piece of garment that Indians purchase in the local market.

Besides collecting extra money from Indian visitors, police officials at the Inarwa also charges Rs 50 to 100 from each Indian carrier that enters Nepal. Some even blamed that the money thus collected is distributed even among the high-ranking police. Hence, they maintain silence over the issue.

But, Jiwan Shrestha, district chief of Parsa dismissed the allegations levelled by the local business community. "We have directed the check post to stop such illegal money collection," said Shrestha. With the recent directive, complaints regarding the illegal collection of money has dropped in recent times, informed Shrestha.

Dev expense dips, revenue collection up

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KATHMANDU, June 5 : During the first nine months of the current fiscal year 2002/03 compared with the corresponding period of the fiscal year 2001/02, broad money witnessed an accelerating growth whereas narrow money registered a decelerating growth, states a communiqué issued today by Nepal Rastra Bank.

The weighted average treasury bills rates decreased. The stock exchange transactions in terms of turnover amount declined.

The sharp decline, on cash basis, in development expenditure resulted in the decline in total government expenditure which, supported by an increase in non-debt resource, narrowed down the budget deficit. Price situation on point-to-point basis saw a faster rise but remained moderate on average.

On the external front, import increased faster than the export, which widened the trade deficit. Despite the large rise in transfer, net, the sharp rise in the trade deficit, coupled with the decline in service, net, widened the current account deficit, the communiqué states.

Notwithstanding the decline in official capital, net, large inflow of remittances from Nepalese workers working abroad increased the miscellaneous capital items, net, that resulted in the balance of payments (BOP) surplus of Rs. 3 billion during the first seven months and further increased the BOP surplus to Rs. 8 billion by the end of the first nine months.

Accordingly, the gross foreign exchange reserve of the banking sector reached Rs. 115.0 billion in mid-April 2003, enough to finance merchandise imports equivalent to 11.3 months and merchandise and services imports equivalent to 9.8 months, the communiqué states.

Compared with the growth of 1.7 percent last year, broad money went up by 6.3 percent to Rs. 238.1 billion mainly due to the increase in the net foreign assets (NFA) of the banking sector.

Of the two components of the broad money, narrow money increased by 4.5 percent to Rs. 80.6 billion compared to an increase of 8.0 percent last year. The second component, the time deposits, registered a growth of 7.2 percent to Rs. 157.5 billion this year as against the decline of 1.4 percent last year.

The NFA (adjusting the foreign exchange valuation) of the banking system rose by 9.0 percent to Rs. 96.5 billion in contrast to a decline of 1.7 percent last year.

According to the communiqué, domestic credit of the banking sector registered a growth of 7.2 percent and aggregated Rs. 219.2 billion compared to a rise of 4.6 percent last year. The factor responsible for this higher growth in the domestic credit has been the upsurge in the claims on the private sector.

The weighted average treasury bills rate stood at 4.06 percent in mid-April 2003 compared to 5.05 percent in mid-April 2002.

Based on the cash flow data, the government expenditure declined by 2.6 percent to Rs. 44.0 billion in contrast to the rise of 3.0 percent last year.

Of this, regular expenditure increased by 8.0 percent to Rs. 34.9 billion compared to the growth of 8.2 percent last year. The development expenditure, however, declined sharply by 31.7 percent to Rs. 7.7 billion compared to the decline of 12.7 percent last year.

The freeze expenditure fell by 12.7 percent to Rs. 1.3 billion compared to a high growth of 50.4 percent last year. The difficulties in carrying out development activities due basically to adverse security situation coupled with the 30.8 percent reduction in the external resource (grants and loans) led to a decline in the development expenditure, the communiqué adds.

Revenue collection, the major source of the government resources, went up by 7.0 percent to Rs. 36.4 billion compared to the growth of 4.5 percent last year.

The revenue mobilization improved due mainly to the rise in imports. The non-budgetary receipts, net, increased by 73.7 percent to Rs. 2.4 billion. However, foreign grants shrank by 40.9 percent to Rs. 1.5 billion in contrast to the rise of 19.7 percent last year.

The decline in the total government expenditure and the rise in the non-debt resources resulted in the decline of the budget deficit by 58.7 percent to Rs. 3.1 billion in comparison to the decline of 9.7 percent last year. This year, HMG mobilized foreign loans amounting to Rs. 2.2 billion, issued development bonds for Rs. 2.0 billion and raised Rs. 303.0 million through the citizen saving certificates.

The National Urban Consumer Price Index, on point-to-point basis, increased by 8.1 percent compared to a slower growth of 2.4 percent last year. The price index on the annual average basis rose by 3.8 percent compared to the rise of 3.0 percent last year. The index of food and beverages group on point-to-point basis increased by 7.9 percent compared to the rise of 2.4 percent last year.

According to the NRB release, the index of non-food and services group went up by 8.4 percent compared to a growth of 2.4 percent last year. Regionwise, the price indices of Terai, Hills and Kathmandu Valley rose by 9.5 percent, 7.1 percent and 6.6 percent respectively. The wholesale price index increased by 8.9 percent compared to a rise of 2.2 percent last year.

Total export increased marginally by 1.0 percent to Rs. 37.6 billion in contrast to the decline of 12.0 percent last year. Export to India witnessed a reversal this year as it declined by 7.9 percent to Rs. 21.0 billion as against the rise of 20.2 percent last year, the communiqué states.

Export to the third countries, which had declined by 38.4 percent last year, increased this year by 15.2 percent to Rs. 16.5 billion. Exports of readymade garments and jewelry to the third countries surged by 51.7 percent and 28.4 percent respectively whereas that of the woolen carpets, Pashmina and tanned skin declined by 20.3 percent, 8.5 percent and 54.4 percent respectively.

Import witnessed a positive reversal as total import increased by 15.0 percent to Rs. 91.4 billion in contrast to a decline of 8.0 percent last year. Import from India increased by 26.3 percent in contrast to the decline of 5.2 percent last year while import from the third country rose by 7.5 percent as against the decline of 9.8 percent last year, according to the communiqué.

Due to the faster growth in import with the marginal rise in the export, the trade gap widened by 27.3 percent to Rs. 53.8 billion as against the decline of 4.2 percent last year. Trade deficit with India surged by 113.6 percent as against the decline of 38.4 percent last year. Trade deficit with the other countries expanded by 4.2 percent over the 12.7 percent rise last year.

Based on the available BOP statistics for the first seven months, service, net, declined by 12.6 percent to Rs. 4.4 billion compared to the decline of 64.3 percent during the corresponding period last year. The transfer, net, which had risen by 15.5 percent last year, increased by 23.4 percent to Rs. 20.2 billion this year.

Despite the rise in the transfer, net, substantial rise in the trade deficit coupled with the decline in the service, net, widened the current account deficit sharply by 54.6 percent to Rs. 16.0 billion over the increment of such deficit by 74.3 percent last year.

However, the BOP during the first seven months remained favourable by Rs. 3.0 billion due mainly to the inflow of miscellaneous capital, net, on account of the rise in the remittance inflows from Nepalese workers working abroad.

The BOP had recorded a deficit of Rs. 2.4 billion during the same period last year. According to the monetary statistics, the BOP surplus during the first nine months reached Rs. 8.0 billion. Accordingly, the total foreign exchange reserve in mid-April 2003 reached Rs. 115.0 billion, out of which the convertible reserve amounted to Rs. 95.0 billion.

Of the total reserve, the convertible reserve rose by 18.3 percent whereas the inconvertible reserve declined by 25.6 percent in mid-April 2003. In mid-April 2002, these percentage changes were –6.7 percent and 28.0 percent respectively, the communiqué adds.

The share of convertible reserve in the total reserve rose to 82.6 percent this year from 74.9 percent last year, resulting in a decline in the share of inconvertible reserve by 7.7 percentage points to 17.4 percent. The rise in the share of the convertible reserve is attributable to an increased inflow of the remittances from the Nepalese workers working in the third countries.

Nepal Credit and Commerce Bank opens 10th branch

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KATHMANDU, June 5 : Deputy Governor of Nepal Rastra Bank (NRB), Bijaya Nath Bhattarai inaugurated the 10th branch of Nepal Credit and Commerce Bank (NCCB) in Mahendranagar of Kanchanpur district toady, states a press release.

In his inaugural speech, Bhattarai appreciated the establishment of the branch in the Far Western region at a time when the economy of the country has been going through a difficult time. "Such an expansion of banking services will help in economic advancement of the region," he said.

Stating that the non-performing assets of banking sector would go up with the rise in malpractice in the sector, he opined that time has come for banks to decentralise their services.

Jay Mukunda Adhikari, Chief District Officer (CDO) of Kanchanpur, speaking on the occasion, said that the establishment of the bank would promote the business activities in the district and facilitate the local traders and entrepreneurs.

Laxmi Bahadur Shrestha, Chairman of the bank, said that the bank is committed to fulfil the objectives set by the central bank. He also noted that the expansion of the bank’s service to Far Western district was carried out as per its plan to provide its services to various parts of the country.

He added that the performance of the bank has improved after the new management took over the bank following the divesting of the Sri Lankan partner. The bank, earlier known as Nepal Bank of Ceylon, had the investment of Bank of Ceylon of Sri Lanka.

Narendra Bhattarai, Managing Director of the bank, said that the branch was established as per the bank’s policy to extend services in the wake of restoration of peace and security.

Among others, Rajan Singh Bhandari, Executive Director of the NRB and Hem Bikram Thapa, Chairman of Kanchanpur Chambers of Commerce and Industry also spoke on the occasion.