NRB reduces CRR, targets to increase liquidity flow

BY A STAFF REPORTER

Kathmandu, Dec. 20: Nepal Rastra Bank (NRB) has announced cuts in Capital Reserve Ratio (CRR) by one percentage point in average and reduced refinancing rate ranging from one to two percentage points effective from today.

According to the new provision, the commercial banks are required to keep a capital reserve of seven per cent of the total deposit amount (current and saving accounts) at the central bank whereas the reserve ratio for the fixed accounts is 4.5 per cent.

The ratio of cash in vault is three per cent as earlier. Previously, they had to keep a reserve of eight per cent in cases of current and savings accounts and six per cent in the fixed account.

The NRB had reduced the rate of Capital Reserve Ratio from 12 per cent to 10 per cent in nearly five years ago.

NRB Governor Dr. Tilak Rawal told a press conference at his office this afternoon that the new provisions of Capital Reserve Ratio would release about two billion rupees in the money market. "We have taken this step with a view to increase liquidity in the commercial banks and to increase the funds that will go to boost industry, tourism and export."

The central bank has cut the refinancing rate on the convertible currency export loans by two per cent. For commercial banks, the NRB has fixed a new refinancing rate. According to which refinancing rate on industrial rehabilitation loans have been reduced to three per cent from 4.5 per cent. Similarly the bank rate on the loans of rural development bank and Nepalese currency export has been whittled down from 5.5 per cent to 4.5 per cent.

The refinancing rate on all other kinds of loans has been brought down to 5.5 per cent from 6.5 per cent.

Dr. Rawal said this measure was taken in line with the government’s commitment in current fiscal year’s budget to provide up to one billion rupees of loans to rehabilitate the sick industries.

It is to be noted that the NRB had reduced the refinancing rates in mid-April 2000 ranging from 0-2.5 per cent.

"The central bank has reduced the refinancing rates with a view to control the interest rates on loans being provided by commercial banks," Governor Dr. Rawal said. "The objective behind this is to provide loans to the industrialists and businessmen at lower interest rates."

Dr. Rawal said the apex monetary authority of the country had taken flexible measures keeping in view the poor performance of the country’s economy, particularly tourism, industry and export during the first four months of the current fiscal year.

He said these measures were expected to expand economic activities and help maintain macroeconomic stability.

Replying to a query whether the excess supply of money in the market would trigge the inflation, Dr. Rawal said the release of cash in the market was not likely to activate any sort of inflation. "It is estimated thaat the inflation is not going to exceed five per cent during the current fiscal year." The rate of inflation stood at 3.5 per cent during 1999/2000 and 2.4 per cent in 2000-2001.

Asked if the new measures would result in capital flight, Dr. Rawal said, "We have given consideration to this aspect. We have been watching the policies taken by India." He said the central bank would watch closely the macro-economic situation of the country and take reorient its policy as demanded by the economic fundamentals.

"If we see positive results of our measures we will adopt a more flexible policy in future, otherwise we will announce contractionary measures."

Six terrorists killed, dozens of suspects held

BY A STAFF REPORTER

Kathmandu, Dec. 20: Three terrorists were killed and dozens of suspected have been arrested in actions of the security forces today.

Two terrorists died in a confrontation between the security forces and armed Maoist terrorists in Gairagaun of Doti district. The security forces also arrested three others with guns and socket bombs with the help of the local people.

The Ministry of Defence, in a press statement, said the local people’s cooperation was commendable in arresting the terrorists.

In Palpa, one terrorist died in the action of the security personnel when he tried to break through the army’s cordon during a search operation.

The terrorist, Kewal Gahamagar, is learnt to be the chief of the terrorist organisation in Palpa district. In the incident, security personnel have also arrested four others with combat dresses and documents related to terrorist activities.

In Tanahu, security personnel have arrested two terrorists in Tiletar and Pipalthok areas with socket bombs and documents related to terrorism.

Similarly, in Nuwakot district, security forces have found bombs, explosives, ammunitions, equipments used in explosion and documents hidden in a plastic drum in Kumari Gaon of the district. Seven suspected persons have been arrested in this connection.

The Defence Ministry said 20 other suspected terrorists have been arrested in different parts of the country.

Among them two were arrested from Thimi of Bhaktapur, one from Lwangghalel of Kaski, 4 from Bheditar of Jumla, one from Simalchautara of Syangja, six from Parbat, one from Jogbudha of Dadeldhura, two from Mahendranagar of Kanchanpur and three from Chandol, Sundarijal of Kathmandu.

The Ministry said two army personnel have also died in the line of duty. One of them died instantly in an ambush set by the Maoist on the army patrol at Deurali of Gorkha district. Two others, who were injured, were airlifted in Kathmandu for treatment but one of them died while undergoing treatment at the Birendra Military Hospital.

The army has cordoned off the area using helicopter and a search operation has been mounted.

Meanwhile, our Pokhara correspondent adds that three terrorists were killed today during security operation in Bhirkot VDC of Gorkha bordering with Tanahu.

The terrorists were killed while trying to flee from the security cordon.

The terrorists killed in the incident occurring around 2 PM, are identified as Radhika Adhikari of Khoplang VDC of Gorkha and Kopila Kumal of Prithvi Narayan Municipality. The third terrorist killed is also identified as Kopila Kumal, says our correspondent quoting Royal Nepal Army’s Bhairabi Dal based in Pokhara.

Similarly, security forces have recovered a big amount of explosives and terrorist propaganda materials from the Phaplu cave of Pumdi Bhumdi VDC of Kaski district. Materials found in an unclaimed state include 228 detonators fitted to explosives, 75 pieces of fuse wires, 15 reels of firecrackers, gunpowder, cartridges of two mortar bombs and 68 pipe fragments used to fit in the pressure cooker bombs, according to the district police office.

Elysee Frontier applies for Upper Karnali

BY A STAFF REPORTER

Kathmandu, Dec. 20: Meeting today’s deadline to apply for the generation license of the 300 MW Upper Karnali Hydropower Project, its aspiring developer submitted application to the Department of Electricity Development (DED), specifying what it claims names of financers for the US$ 450 million scheme.

"In the application we have stated that Lloyd’s Bank, the Royal Canadian Bank and Euro Asia Capital Holdings will together with us invest for the project," said Sitaram Nepal, a local associate of Elysee Frontier, a Singapore-based French Company that is eyeing to develop the Upper Karnali Project.

He said that the company’s chairman Sylvian Leveque would be arriving here few days later with details of the joint investment. "For now, we have registered the application and things will move accordingly."

Prakash Khadka, Director of a joint venture between EF and Nepal Electricity Authority (NEA) to develop the Upper Karnali Project said that the ratio of investment among the financers is yet to be worked out. "By the time the government finds out about the financing parties we have mentioned, we will have worked out the details."

EF is required to submit its financial commitment and a Power Purchase Agreement with NEA to apply for the generation license of the Upper Karnali Hydropower Project.

The French Company did sign a PPA with NEA last October but the authority’s board chose to wait for the foreign company’s financial commitment before approving the agreement.

DED officials confirmed the application submitted by EF but said they would take some time to examine the documents. "All we require is the financial commitment and the PPA, if they are able to produce them, we will give them the generation license," said Angira Acharya, the concerned official at the DED.

All eyes are fixed on EF whether it would be able to cough up the money — for the project — it says it has as a humanitarian trust meant for young democracies like Nepal. After signing the tentative PPA with NEA last October, Leveque had told the press that his company had invested on different stock markets around the world that would generate the special humanitarian fund for development works across the globe.

"But the condition for access to such fund is that the profit from the projects we invest on should be ploughed back for local development."

That apart, what had drawn attention of observers was the offer EF made to NEA. Under the PPA it has signed with the authority, the French Company would sell the electricity it would produce from the Upper Karnali Project at the rate of Rupees 2.90 per unit on average. During wet season, when the national power grid — that has the installed capacity of around 400 MW— has excess power supply, EF would charge 1.45 Rupees per unit for the first five years.

NEA currently pays an average of Rupees seven per unit of electricity to other private power producers. What’s more, the French Company is also giving NEA 30 per cent shares of the Upper Karnali Hydelplant — free of cost.

Then it also has the plan to plough back the profit from the project for the local development.

Just when the government had opened floodgates of planned 22 hydropower projects inviting private parties to develop them last year, EF came in through the Fast Track Committee that instructed the DED to give it the survey license for the peaking run-of-river Upper Karnali Project.

Environmental perspective plan in the  offing, says P.L.

BY A STAFF REPORTER

Kathmandu, Dec. 20: The government is working on a long-term environmental perspective plan along with the 10th five year plan document, Minister of Population and Environment P.L. Singh has said.

"The government is drafting the plans," Minister Singh said at a programme organised by the Society of Environmental Journalists (SEJ) here today.

Minister Singh further stated that Second Global Ministerial Forum on Environment held in Malmo, Sweden, on 29-31 May 2000 has identified the valuable role of civil society and business community to address the global environmental challenges in national level and globally.

"The journalists can play a vital role in disseminating information about our efforts and commitments to the grassroots level of the society," Minister Singh said. "We are committed to interlink our efforts and practices to the mainstream of the global environmental governance."

Surya Sharan Regmi, Joint Secretary at the Ministry of Local Development said that the environment is a multi-sectoral subject matter which is why it is important that everyone extended support to the government efforts.

Dr. Jan A. Speets, Environmental Health Advisor of WHO, said that it’s everyone’s responsibility to save the nature. "We need nature."

Adarsha Prasad Pokharel, Director General at the Department of Hydrology and Metrology said that we should first stop deforestation to save environment. "We have denuded 99 hectares of our forests in between 1978-1998," he said and added, "Controlling increasing population is another way to protect environment."

"To keep the environment clean training is necessary," says Surya Man Shakya, an environmentalist.

Earlier in his welcome speech, Upendra Karki, General Secretary, SEJ-Nepal highlighted the objectives of SEJ and programme.

The programme was organised to mark the 8th anniversary of SEJ.

South Asia’s ozone layer found depleting

By Umesh Ojha

Kathmandu, Dec. 20: A joint study team of Tribhuvan University and Albany University of the United States of America has found the ozone level in the South Asian region depleting gradually. The problem of ozone depletion was, so far, been confined in areas near the North and South poles.

From its a year long study, the team has discovered the ozone over Nepal is also depleting.

"The most modern equipment for getting the details of ozone layer, which was imported from Canada, and for measuring the situation of ozone has indicated that ozone above us is depleting," says Binod Dhakal. Dhakal is involved in the joint Nepal-US research project at the Physics Department of Tribhuvan University. The equipment has been used since February and data during the period has indicated the depletion of the ozone layer.

He said the ozone level on December 12 measured by the Brewer’s Spectrophotometer was 230 Dobson Unit (DU). The project has been measured the ozone level over Nepal since December 1.

This measurement is not much different from the ozone level mapped by NASA’s TOMS (Total Ozone Mapping Spectrometer) at 27.68 degrees east longitude and 85.3 degrees north latitude.

According to Dhakal, the normal ozone level at zero degree Celsius and at one atmospheric pressure should be 300 DU. But the data in the last several months does not show that number, he said.

Chief of the Project and Professor of Physics at TU Shekhar Gurung also admits that the ozone level above Nepal is gradually getting thinner.

Gurung says the level of ozone may also be affected by the change in the atmosphere and also in the outer space. He said this might also be due to solar activities like solar flares and solar cycle, which takes place every 11 years.

Gurung presumes that presently it is time of solar flares and the ozone depletion may be because of this. Again, the ozone level normally measures low in winter.

This might also be because of global warming and the greenhouse gases, he added.

"There is no reason to get panicked yet and we still have to confirm this. An American team is arriving for this purpose by the end of this month," he said. The US and the Nepalese scientists will start analyzing the data from December 28, Gurung informed.

At a time when ozone level in the stratosphere (upper level of atmosphere) above Nepal is depleting, it has been found increasing in the troposphere (lower atmosphere level).

According to data of the Department of Physics of TU, in 2001 ozone concentration at the lower atmospheric level has been found to be 100 microgram per cubic meter. The Department says the normal range is about 80 to 90 microgram per cubic metre. This trend has been found since 1992, when ozone level was measured for the first time in Nepal.

The thinning of ozone causes the penetration of the ultraviolet (UV) rays in to the atmosphere. On December 12, the level of UV rays was measured at 100 milliwatt per square metre.

Gurung said there is little possibility of the UV rays to penetrate the atmosphere in winter when the sun is in the Southern Hemisphere. But a detailed picture will come out after the analysis of data, he said.

However, the government agencies seem to be unaware of the phenomena. The Ministry of Population and Environment and Nepal Bureau of Standard and the Department do not know about the programme of TU.

But the government agencies say they are aware of the Montreal Protocol of gradually reducing the chemicals, which affect the ozone layer.

Senior Divisional Chemist at the Ministry of Population and Environment, Narendra Prasad Pokharel said Nepal would be free from CFC(11) and CFC(12). He also said the level of CFC(22) will be kept at the present level till 2015 and its consumption will be totally stopped by 2040.

Nepal’s use of these ozone-destroying chemicals was 29 tons in 2000 and it has reduced to 26 tons in 2001. This is negligible compared to their use worldwide. So, it might not be wrong that the ozone depletion in the atmosphere above Nepal is because of causes in the elsewhere.

However, the increase of the concentration of ozone in the lower atmospheric region may be more worrying than the depletion of ozone at the upper level.

According to the United Nations Environment Agency, increase of ozone in the troposphere may cause respiratory problem leading to asthma, cleft palate and defects in heart in the newborns. A study done by the University of California also says throat problems and eye disease are also related to the increase of the concentration of ozone in the atmosphere.

‘Media should promote good governance’

BY A STAFF REPORTER

Kathmandu, Dec. 20: Diplomats and media experts today said that media should play the role of a watchdog to promote good governance by exposing cases of bad governance and changing its approach.

They were speaking at a media seminar on "Role of Media in Promoting Good Governance" organised by the Telegraph Weekly in cooperation with Friedrich Ebert Stiftung (FES) here today.

Speaking at the function, German ambassador to Nepal Rudiger Lemp said that free media coverage and dissemination not only assure the information and transparency required for rational decision making. It also exposes bad governance such as abuse of authority, mismanagement, inefficiency and corruption, said the German ambassador.

He noted that it required several preconditions that must be fulfilled before the media could have the expected positive effects on good governance.

According to him, those preconditions include ability to access, verify, collect and correctly present information, the ability to reach to people and a mechanism for interaction between an informed public and decision making.

"Mechanism of interaction between the people in high places and the common man for whose benefit all the decision makers really should act, can not only consist in democratic elections every four or five years," German envoy said.

"If the common people do not see a possibility or do not really try to be counted and listened to in between elections, good governance probably becomes elusive," he added.

Robert Kerr, Public Affairs Officer at the United States Embassy and Director of American Centre said that a good and independent media was key to achieve good governance in Nepal.

"One needs to look seriously at the performance of media to know whether there is good governance or not, one needs to look seriously at the performance of media," Kerr added.

Independence, integrity and investigation and follow up are some of basic requirements for the well-functioning of the journalism, which ultimately contribute ensuring the good governance in the country, said US diplomat.

He said that more constructive role for the media is to thoroughly and objectively investigate the performance of the bureaucracy and other aspects of governance and follow with these investigations.

Chief Editor of the Telegraph Weekly N.P. Upadhyaya said that it was the government sector that had remained more vocal than any one else which advocated the idea of providing of good governance in the country day in day out.

Upadhayay held the view that Nepalese media had failed to give due attention in this regard. "We, in the media have remained ever sensitive to this issue indeed but possessing our own sort of political bias. Our preferences of one leader over the other and vice versa has altogether confused the readers."

However, the Nepal media of late has done commendable jobs by exposing various scandals, which at least made the voters sensitive back in the electoral constituencies.

P. Kharel, media advisor at FES, said that his institution has been supporting to organise such functions that promote good governance in the country.

However, the issue of good governance has been overlooked in the Nepalese media, he noted.

Professor Ananda Shrestha said that it was only Telegraph Weekly that had brought the diplomats, intellectuals and media persons close together for discussion on the issue such as governance.

Ajay Ghimire, Managing Director at ACE Finance Company and Lal Babu Yadav, political science teacher at TU had presented the working papers in the seminar while Dr. Shreedhar Khatri, Director at Foreign Affairs Institute and academic Shirish S. Rana, senior journalist, had commented on the papers respectively.

‘Terrorism spoils society’

BY A STAFF REPORTER

Kathmandu, Dec. 20: Avraham Nir, Israeli Ambassador to Nepal, today said that the causes of terrorism couldn’t be justified as it is against the entire humankind and human civilisation.

"Terrorism cannot be justified even if it is for a valid cause," Nir said, while addressing a talk programme "Terrorism: A Threat to Humanity" organised here today.

Nir further stated that Israel has been tackling terrorism and carrying out developmental activities together. "Israel has been in against terrorism. Humanity that has to overcome terrorism in order to create peaceful environment for human existence," he added.

He informed that a series of terrorist activities have taken place in Israel where many children and others have been murdered just because they are Israelis.

He also said that all Nepalese people have to fight terrorism.

Speaking at the function, Damodar Gautam, former Chief Secretary and Nepalese Ambassador to the United States, said that the fear created by terrorism is the greatest enemy of humanity.

"A terror-stricken person cannot do anything creative. So, terrorism paralyses the society," said Gautam.

He also expressed the view that the tentacle and roots of terrorism are spread beyond political and geographical barriers.

He said that poverty, illiteracy, unemployment and inaccessibility have to be addressed to root out poverty.

Harihar Birahi, Chairman of Nepal Press Council, said that terrorism is a threat to the entire humanity as it has nexus worldwide.

"Terrorist activities are never good for humanity as they lead the society to destruction," he said.

Suresh Acharya, President of Federation of Nepalese Journalists (FNJ), said that terrorism has brought the country to the present state.

He said that the government has declared a state of emergency due to the terrorist activities taking place in the country.

Speaking from the chair, Ramesh Sharma, President of Nepal Press Centre, said that terrorism has emerged as a grave threat to the human civilisation. "So, it has to be tackled effectively," Sharma said.

Organised by Nepal Press Center, the talk programme was sponsored by Image Nepal and Tourism News Digest.

Koirala calls for broader unity to solve key problems

Kathmandu, Dec. 20 (RSS): Nepali Congress President Girija Prasad Koirala has stressed the need for all democratic parties to unitedly launch a campaign through a broad-based democratic front for the resolution of all problems facing the country today including killings and other violence.

When it comes to protecting the country’s national identity all political parties should rise above party interests, NC president Koirala said adding, a broad-based democratic front is equally essential if we are to protect democracy.

Speaking at an interaction programme on the ratification of ILO conventions No. 87 and 105 and poverty alleviation organised for Parliamentarians by the Nepal Trade Union Congress (NTUC) here today, Koirala said in view of the present state of affairs the Nepali Congress also should join hands with other parties to find a proper way out without being too self-conscious about its majority status in Parliament.

Poverty alleviation is possible only when we are able to formulate development plans bearing in mind the country’s diverse topographical conditions, population distribution and other similar features, he observed.

ILO convention No. 87 is related to protection of the freedom to organise and No. 105 provides for abolition of forced labour. Organisations like NTUC are pressuring the government to endorse ILO conventions No. 87 and 105.

Out of the existing 200 ILO conventions nine have been endorsed by Nepal.

Members of both Houses of Parliament and experts concerned took part in the programme.

Patrick Daru of ILO and N. Suzuki of ISFTU also expressed their views at the programme.

NTUC president Laxman Bahadur Basnet presided.

Special Bulletin
Nepal prepares for SAARC Summit

Kathmandu, Dec. 20 (RSS):The preparations for the eleventh summit conference of the South Asian Association for Regional Cooperation (SAARC) to be held in Kathmandu have reached in their final phase.

The third SAARC Summit was held l4 years ago in Kathmandu from November 2-4, 1987.

The occasion, which is an important summit of head of state and government of South Asian countries being held after an interval of three years is to begin at the Birendra International Conference Centre, Kathmandu on January 4, 2002.

The official invitations dispatched by Nepal as the host country to the heads of state or government of the six South Asian nations has been accepted and information has been received that they will participate in the summit conference.

According to the Foreign Ministry, preparations have also been completed for the meetings of SAARC to be held at various levels from December 29 to January 3 before the summit.

According to the programme schedule, a meeting of senior officials of the seven countries will be held from Dec 29-30, the secretary level meeting will take place Dec 31- Jan 1 and the ministerial meeting from Jan 2-3.

The draft of the Kathmandu declaration to be adopted by SAARC leaders on the concluding day of the summit on January 6 has also been completed.

The firm commitment of His Majesty’s Government to leave no stone unturned so that the summit conference will unfold without any hitch has been felt at the implementation level.

In this connection, HMG has been giving special importance to law and order besides the other aspects.

Doubts have now been completely eliminated as to whether or not the summit conference will be held in Kathmandu as the security system went into high gear after declaration of a state of emergency by hmg on November 26 with the sole objective of maintaining law and order and clamping down on Maoist terrorism.

Hopes that the SAARC conference will be held unhindered have been increasing with the sense of security among the general public as remarkable improvement has been seen in the state of law and order in various places including the capital Kathmandu during the past three weeks.

Meanwhile, following the terrorist attack on the indian Parliament building on December 13 there was widespread suspicion that the resulting tense atmosphere between SAARC member states India and Pakistan would jeopardize the llth SAARC Summit. But it is now certain that the summit will go ahead as the invitation presented to the Indian Prime Minister by Nepal five days after the terrorist incident has been accepted.

Not only that, a need has been strongly felt to utilise the llth summit conference for taking concrete steps as per prior commitment by SAARC for wiping out terrorism that has been spreading in South Asia as well as in the world at large. From this perspective, South Asian people have been expecting every possible effort by the SAARC heads of state or governments to make the summit fruitful.

The SAARC Summit has also been taken as an important opportunity to improve the physical infrastructure of Kathmandu. The roads around the Royal Nepal Academy, the venue of the third summit conference of SAARC were widened during that summit, whereas this time the physical landscape of the Jamal, Maitighar and Koteswor Tinkune areas has been extensively enhanced this time.

It was Nepal’s turn to host the l0th SAARC Summit in 1998 as per the English alphabetical order of the names of the countries, but as that year also marked the golden jubilee of independence of Sri Lanka, the latter had requested to be allowed to host the summit. This was agreed by Nepal as a goodwill gesture.

Meanwhile, the llth SAARC Summit to be held in Nepal in November 1999 was postponed on the request of India due to the political changes taking place in Pakistan.

Thus, the conference postponed for the last three years has been awaited not only by this region but the whole world with much curiosity.

Although Afghanistan is not a SAARC member state, it is known to all that it is a South Asian state which is suffering a lot at present and the SAARC member states cannot remain aloof from this.

The llth SAARC Summit is important at a time when the world’s attention has been drawn towards this region because of the developments in Afghanistan including the rise of the Taliban in 1996 and the terrorist attacks on the United States of America on September 11.

In this connection, the expectations of the general public are that the llth summit will be successful in instilling new vigour and confidence and disprove the old perception that it is powerful in verbal commitment but lax in implementation.

ADB for effective support to rural development, assures Vokes

BY A STAFF REPORTER

Kathmandu, Dec. 20: In response to Prime Minister Sher Bahadur Deuba’s recent request to the donor-community, the Asian Development Bank (ADB) will consider more effective support to the country’s rural development, the multilateral agency’s Resident Representative Dr. Richard Vokes said at a press meet here today.

"During our recent meeting, the Prime Minister had indicated a request for additional support but there were no specifications," he said, adding, "However, he had also said that he had the desire to see more focus on rural areas."

Prime Minister Deuba last Monday (December 17) had met a group of donors to brief it about the security situation of the country and the official economic programmes adopted by the government after it declared the state of emergency in November 26 last month.

"In light of what he has said, we would see if we can extend more effective support in the rural areas," Vokes said at a press meet the bank had organised today to share its latest development experience in the country.

Even as 2001 has been an extremely difficult year for Nepal, the year has been a good one for ADB operations in the country, he said. "We signed a Poverty Reduction Partnership Agreement with the government of Nepal in October during ADB Vice-President Myoung-Ho Shin’s visit to Nepal."

The bank this year has approved US$ 95.6 million loan for Teacher Education Project, Governance Reform Programme and Road Network Development Project. "This year’s lending is in line with our expected lending level under the base-case scenario that is linked to country performance," said Vokes.

Loans apart, ADB also approved US$ four million for five technical assistance to the country. Ever since it began working in the country in 1968, ADB has so far provided Nepal US$ 1.9 billion loans while its technical assistance to date amounts to US$ 100 million. In the last 33 years, the bank has so far worked on 102 projects in the country.

The bank is currently working on 17 projects while five others will be added soon.

Arguably the most talked about project ADB has been involved in of late is the US$ 464 million Melamchi Water Supply Project — promoted as an effective solution for the acute water supply shortage in the Capital Valley. The project aims to pipe in 170 million litres of water a day from the Melamchi River in Sindhupalchowk district through a 28 kilometres long tunnel.

Approved last year by the bank, the US$ 120 million loan for the MWSP became effective on November 28, last year. "This will now allow the government to bring in the project management consultants, formally start social activities in Melamchi Valley and begin the detailed preparatory work on tunnel and bulk distribution.

The Rural Electrification, Distribution, and Transmission Project will also be effective very shortly, said Vokes. "The government and ADB have reached agreement on the four affectivity conditions. We are now waiting for the subsidiary loan agreement between the government and NEA to be finalized and sent to ADB, after which the loan should become effective."

Asserting the bank’s policy against corruption, he said that ADB affirms a zero-tolerance policy when credible evidence of corruption exists. "For the second year in succession, we have suspended loan disbursement on a project supported by the ADB due to poor quality civil works and poor supervision and management."

In 2000, disbursements were suspended under the Upper Sagarmatha Agriculture Development Project while a few months ago the bank suspended work on the Rural Infrastructure Development Project, he said. "This shows the importance ADB attaches to proper utilisation of the funds we provide."