Govt firm to speed up reform process: Deuba
Nepal Development Forum 2002 meet inaugurated

By A Staff Reporter

Kathmandu, Jan. 4: Prime Minister Sher Bahadur Deuba has pledged to introduce strong anti-corruption legislations at the upcoming session of Parliament and initiate governance reform measures to strengthen the civil service, the financial sector and decentralisation.

Inaugurating the Nepal Development Forum – 2002 meet here today, Prime Minister Deuba said that the government is fully committed to utilise its resources by prioritising its expenditure and adhering to a strict fiscal discipline as recommended by the Public Expenditure Review Commission.

The government is working to reduce non- essential and unproductive expenditures and has started reducing the long term liabilities by freezing hiring and terminating temporary jobs in the civil service, said Prime Minister Deuba.

Addressing the function, Premier Deuba further said that the government would continue to encourage non-governmental organisations and the civil society to render services aimed at poverty reduction within the government’s broad policy framework. He said "We would like to see them becoming more transparent and accountable."

The government’s priority will be on streamlining public enterprises through privatisation and minimising financial liabilities of the government, he informed the representatives of the donor agencies.

Prime Minister Deuba said that the proposed foreign aid policy, the concept paper on the Tenth Five Year Plan, sectoral priorities set by the Medium Term Expenditure Framework and policy papers prepared by the government can provide a framework under which development partners can develop their respective assistance strategies. "At this particular moment, we are at a critical phase in our development process – a situation created by internal disturbances and external environment, both resulting mainly from acts of terrorism. At a time like this we need a strong partnership," Prime Minister Deuba reaffirmed. "We need concerted efforts to attain the common goal of peace, progress and prosperity in the country," he added.

Minister for Finance Dr. Ram Sharan Mahat, while speaking at the function, said that the government would sincerely appreciate if the development partners extend their assistance in the form of budgetary support during "this hour of need."

"We are facing a resource crunch not only to maintain the ongoing priority programmes, but also to make resources available for rebuilding infrastructural establishments and essential facilities destroyed by the terrorists, and for providing relief and rehabilitating those who have been displaced, dispossessed, handicapped and maimed and for supporting the thousands of families that have lost their bread earners," said Minister Mahat.

He further said that Nepal, despite being poor, is striving to implement reforms and overcome the formidable challenges of development, against the backdrop of a constellation of unfavourable external and domestic events.

Nepal requires substantial external aid to support its development efforts. More so now when security spending is growing while the development demands are also increasing, Minister Mahat said, adding "Nepal also needs flexible budgetary support to protect its core development priorities. The only alternative to increased external support is to increase the domestic borrowing which we want to avoid as much as possible in the interest of a macro-economic stability which we have been able to achieve after years of prudent policy, Dr. Mahat said.

Minister of State for Finance Bharat Kumar Shah underlined the need for external support to overcome the challenges in the economic development in the country.

Vice President of the World Bank Mieko Nishitmizu underlined the need for introducing balanced development in Nepal. However, strong commitment is required to battle poverty and inequalities in the country. There is a vast disparity, she said adding "On the one hand, one can feel that there is an abject poverty just 15 kilometers away from Kathmandu, on the other, people in the capital city seem quite affluent." Nepal is poor in terms of means not in terms of mind, she said.

She also expressed her strong belief that Nepal would come up with new commitments to battle poverty and provide equal economic opportunities to all.

Secretary at the Ministry of Finance Bimal Prasad Koirala expressed confidence that the NDF-2002 meet would help streamline the Nepalese economy which is reeling under uncertainties.

Joint Secretary at the Ministry of Finance Madhav Prasad Ghimire, while extending a vote of thanks, said that the NDF-2002 meet being held for the first time in Nepal would help identify the issues facing the country more closely.

The plenary session, which kicked off today, will continue here till tomorrow. The donors and top officials will meet in Pokhara on Wednesday and Thursday.

Two terrorists killed in army operations

By A Staff Reporter

Kathmandu, Feb. 4: The security forces, in their operations on Sunday, killed two armed terrorists, arrested 15 others and seized weapons and explosives from various parts of the country.

The forces killed two terrorists at Seje area of Rukum in an encounter with the armed terrorists. The security forces also arrested six other terrorists and their weapons from the same site, the Defence Ministry said in a statement issued today.

Similarly, the security forces arrested nine terrorists and seized nine guns from them at Chauratha area of Dailekh. Legal action against them is underway.

The security forces also recovered seven guns hidden at Matsyapokhari area of Sankhuwasabha, two from Apung area of the same district and goods worth Rs 150,000 from the Koyapani area of Dadeldhura.

In their actions, the security forces have been receiving public support, residents of Palpa collected and submitted four guns to the security personnel, said the Ministry statement.

The security forces have also detained 34 suspects and seized weapons and explosives from various parts of the country. According to the Ministry, the security forces seized guns, socket bombs, combat fatigues and terrorist documents and arrested five suspects from Chigada of Surkhet.

In Sankhuwasabha the so-called village chief of the terrorists’ organisation was arrested with weapons. Similarly, 10 suspects were arrested in Ilam, two in Kimdanda area of Arghakhanchi, eight in Shirsha area of Dadeldhura, four in Bodhekhwak of Dhankuta, two in Itahari of Sunsari and one in Thankot of Kathmandu. The press statement said the security forces are interrogating the suspects.

The security personnel also seized two guns and equipment used for making electric ambushes from Ilam and explosives and equipment used for making ambushes from Arghakhanchi.

According to the Home Ministry, a resident of Hajariya village of Sarlahi, Kedar Sahani, was murdered by the terrorists and seven others were injured in the terrorist attack yesterday. Police investigation is underway.

Meanwhile, 43 people from various parts of the country surrendered today before the respective administrations renouncing their affiliation with the terrorists.

They include 17 in Parbat, 10 in Morang, four in Terhathum, five in Nawalparasi, three in Sindhupalchowk, two in Bardiya, one each in Dhankuta and Arghakhanchi. Likewise, two people in Rautahat, six in Arghakhanchi and one in Achham surrendered yesterday.

PM seeks support to fight terrorism

By A Staff Reporter

Lalitpur, Feb. 4:Prime Minister Sher Bahadur Deuba today said that unless the local bodies are strengthened, the overall development of the country would not take place.

"Local bureaucracy and rural economy are the key to reinforcing autonomy of the local bodies in line with the spirit of decentralisation," Prime Minister Deuba told the fifth town council meeting of Lalitpur Sub-Metropolitan Corporation (LSMC) here today.

Premier Deuba reiterated his commitment to support the self-autonomy Bill if it is brought to the Parliament. "You bring it, I will extend my full support to get it approved by the House," Deuba told the local representatives.

Deuba also commended the efforts of the LSMC to develop and protect historical heritage sites of the town.

Speaking on the State of Emergency, the PM said that mobilising the Royal Nepalese Army was the last alternative before the government to quell terrorism after all other efforts proved futile.

"I was strongly in favour of dialogue to tackle the Maoist problem. And it is for my liberal standing, I was criticised from different quarters," he noted.

But the Maoists betrayed the government when it was preparing for the fourth round of talks and suddenly attacked the army, compelling the government to mobilise the army, Prime Minister Deuba said.

Deuba also urged all to support the military operation against the terrorists. "Peace is necessary to gear up development works."

Deuba also expressed the hope that the UML would support the government position on the State of Emergency during the forthcoming session of the Parliament.

MP Raghuji Pant said that the pace of development was too slow and it was high time that political parties started their self-evaluation to understand why the country was lagging behind. He also blamed the government for curtailing the development budget to meet the defence expenses.

LSMC Mayor Buddhi Raj Bajracharya said that his office was effortful to develop the LSMC as a modern cultural centre and raise the living standards of its residents.

He said that LSMC would renovate all decrepit sites within five years.

Highlighting on the ongoing activities and the future plan of the LSMC, Bajracharya informed that a town management
and economy diversification programme would be launched in LSMC and Khokana VDC starting next month under the Asian Urban Programme of the European Economic Union. The project, with a budget of over 61 million rupees, came after Lalitpur requested the Chester City of the United Kingdom.

LSMC Deputy Mayor Ramesh Chitrakar said that his office had failed to meet expectations of the voters.

He said that development expenses had significantly gone down while the regular budget was going up every year. "This trend indicates a frustrating picture for the LSMC."

Despite their sharp differences on other issues, the Mayor and the Deputy Mayor agreed that a financial crunch had hit the LSMC hard.

PM ready for pay cuts of  MPs, ministers

By A Staff Reporter

Lalitpur, Feb.4: Prime Minister Sher Bahadur Deuba today said that he was ready to reduce the salaries of the parliamentarians, ministers and top level officials to meet the rising regular expenditures, if political parties including the Opposition CPN-UML forward such a proposal.

The Prime Minister made this remark after UML MP Raghuji Pant requested the government not to curtail the budget of the local bodies and said he would rather prefer a cutback on salaries of the MPs, ministers and top level bureaucrats.

Pant said that a reduction of Rs 250,000 from the VDC budget would severely hit the development activities in the villages.

The Prime Minister was speaking at the fifth town council meeting of Lalitpur today.

Leaders pay tributes to late Singh

Kathmandu, Feb. 4 (RSS): Leaders of various political parties have paid heartfelt tribute to the late president of the Nepal Sadbhawana Party (NSP) Gajendra Narayan Singh at a function here today marking the 13th day of his demise. They lauded his contribution to the Nepalese democratic movement.

Speaking on the occasion, president of the Nepali Congress Girija Prasad Koirala said Singh’s absence has been strongly felt in the broader democratic alliance that he had initiated at a time when the nation is in crisis.

CPN-UML standing committee member Bharat Mohan Adhikari said the late Singh was a staunch fighter for democracy, and was committed to a simple life and to his goals.

CPN-ML general secretary Bamdev Gautam said the late Singh fought all his life against regional and communal inequality.

Also paying tribute and shedding light on the personality of the late Singh were Indian Ambassador I. P. Singh, Rabindra Nath Sharma of RPP, president of the Nepal Terai Development Forum (NTDF) Parasu Narayan Chaudhari and industrialists Hulas Chand Golchha, Banwarilal Mittal and Gajananda Agrawal.

Meanwhile in Mahottari, Nepal Sadbhawana Party (NSP) Mahottari district committee held a condolence meeting in memory of late Gajendra Narayan Singh, president of NSP recently.

Narendra Mishra, chairman of Janakpur Greater Area Development Committee said that the nation had lost a patriot following the demise of late democratic leader Singh.

Recalling late Singh as a leader who was always attentive towards the problems of the people living in Terai region, leader of CPN-UML Ganesh Nepali expressed deep sadness over the demise of late Singh.

At the meeting, a host of speakers including central member of NSP Ram Chandra Mishra, its discipline committee member Sunil Rohit, CDO Mohan Prasad Acharya and Nepali Congress Mahottari district secretary Hari Narayan Yadav also paid emotional tributes to late Singh.

Gachchhadar stresses SAARC hydropower grid

By A Staff Reporter

Kathmandu, Feb.4:To export its power, the country needs to reach into international agreements with other countries in the region like it already has with India, Water Resources Minister Bijay Kumar Gachchhadar said here today.

"We need to establish South Asian Association for Regional Cooperation (SAARC) grid for hydropower development in the region," the minister said, while releasing the first of its kind hydropower database at a seminar on Development of Nepal’s Water Resources.

The database is prepared by the Nepal Hydropower Association.

The government, he said, has adopted a three-pronged approach for the development of hydropower. "The first is the development of small hydropower projects for the electrification of rural areas, the second one includes medium-sized hydropower projects to meet the national demand and the third one is the large size long term projects for the regional demand."

Gachchhadar said that the government, in its bid to develop hydropower, is facing financial, technical and manpower constraints.

J.L. Karmacharya, Senior Hydropower Consultant with United States Agency for International Development, said that the biggest challenge for the country now is to export its power. "An optimistic forecast shows that our domestic market will be able to use only around 3,000 MW of power by 2020, while we will have 15,000MW of power by then."

That is why, he said, the regional power grid is very important. "That is where the need of a South Asia Regional Initiative becomes crucial."

Ratna Samsar Shrestha, a senior chartered accountant working with Winrock International, however, said that the focus on power export would result in a lose-lose situation for the country. "The idea of power export will send both the energy and money outside. So, how will the country benefit then?"

Elaborating on his argument, he presented the example of the 60MW Khimti Hydropower Project that started power generation almost two years ago. "There was an investment of US$ 140 million on Khimti, but not even five per cent of that money remained in Nepal."

Khimti is the first Build Own Operate and Transfer project that pioneered power generation from the private sector in the country.

Presenting her paper on hydropower and environment during the seminar, Annu Rajbhandari of NEA said that the country needs to have guidelines for dams like the World Commission on Dam has. "Since we do not have national standards for water, air and noise, NEA has to rely on the guidelines of the Word Bank and the criteria India employs. The problem with the World Bank guidelines is that many of them are simply impracticable."

The participating experts in the seminar pointed out that NEA has no environment guidelines to develop its projects. The only authority to transmit and distribute power, NEA has to conduct Environment Impact Assessment — a mandatory examination on the impact of the project on environment — before it begins any project.

The national power grid operated by NEA has the installed capacity of around 400MW and will go up by around 40 per cent once the 144MW Kali Gandaki — the authority’s biggest power plant — becomes operational.

Alison Bartle, Editor of Hydropower and Dams, an international journal, said that there are excellent examples of hydropower plants in Nepal.

The programme was organised by the Nepal Hydropower Association, a member of the International Hydropower Association, which is a non-profit making international organisation with representatives from 63 countries.

                                              Power on line and in the pipeline

Source: The Nepal Hydropower Database 2001

CIAA probe on NBL credit advances to final stage

By A Staff Reporter

Kathmandu, Feb. 4: The investigation on the alleged involvement of a former Nepal Bank Limited (NBL) Deputy General Manager in approving loans beyond his authorised limit has reached the final stage, according to sources.

The Commission for the Investigation of the Abuse of Authority (CIAA) had launched its inquiry against the breach of authority allegedly committed by former Deputy General Manager Sher Bahadur Thapa that he sanctioned more than a billion rupees in loans. Most of the money lent by the bank is still to be recovered, an NBL Review Report stated.

Out of 306 credits endorsed to different debtors during April 1999 to February 2000, 85 per cent of them or 206 credits (or loans worth about 1.08 billion rupees) are unlikely to be reimbursed, thus have been found to be endorsed with an ill intention, the report stated.

The CIAA disclosed that it would formally file cases against the people involved very soon.

The debtors who have come under the cloud for having received such loans are Laxmi Acharya Group, Mohan Shahani Group, Milan Trading, Ram Kumar Khadka Group and Bishwapriya Group, said the NBL Review Report.

Former DGM Thapa along with Laxmi Prasad Acharya, Mohan Sahani, Bijay Prasad Lohani, Binod Shahi and Mahendra Gadtaula as well as others have been detained for further investigation.

The CIAA said that Thapa was authorised to grant loans only worth 370.5 million rupees under T.R. and Hypothication headings. However, Thapa granted more than 900 million rupees in loans under these headings, in what is regarded as a clear example of his crossing the limit.

Likewise, Thapa, who had the right to grant loans amounting to Rs. 250 million, crossed his authorisation limit sanctioning more than 410 million rupees of loans under the fixed capital and working capital headings.

But DGM Thapa, now imprisoned at the Dillibazar Cell, denied the allegations, saying that whatever loans he had sanctioned were in keeping with the rules and regulations.

The disclosure of the alleged forgery in the Nepal Rastra Bank’s Review Report published last July prompted the CIAA for action against those involved. "Dozens of people within the NBL and outside of it are involved in the case," a CIAA source, requesting anonymity, said.

The same source blamed the then NBL management for inaction despite being aware of the whole affairs. During then, Bishwo Nath Sapkota was the chairman of the NBL board of directors while Mukunda Prasad Aryal, Dr. Prafulla Kumar Kafle, Biswambhar Pyakurel and Jharendra Shumsher Jung Bahadur Rana were the members.

Thapa, however, dismissed all these charges against him and said that it was impossible that the debtors had done double valuation of the same collateral.

Thapa said that even if that happened, the responsibility for the double valuation would fall on those answerable for the valuation process of the collateral.

But according to the CIAA, out of the sanctioned loans, the amount of outstanding loans was 840 million rupees till September 2002. During the same period, the loans worth Rs. 730 million were sanctioned by violating the authority and there are arrears worth Rs. 670 million rupees.

A case against Thapa showed he granted loans to 350 debtors on a single day. The bank had then released about 600 million rupees in loans.

"A year ago, the NBL’s then management had been found to have granted the double amount of the loans on the same land collateral for which it had granted Rs. ten million rupees loan," the CIAA source said. "Is not it a case of abuse of one’s authority," the CIAA questioned.

EU-Mission Heads hail NDF meet

By A Staff Reporter

Kathmandu, Feb. 4: The European Union-Heads of Mission (EU-HOMs) say that they welcome the opportunity to participate in the Nepal Development Forum (NDF). The Forum provides us all - the Government of Nepal and its development partners - the opportunity to discuss in a frank and open atmosphere the challenges that Nepal is facing today.

NDF 2002 takes place against the background of continuing and escalating conflict and political unrest. The unprecedented level of insurgency calls for an equally frank and open discussion on the root causes of the conflict - and how to jointly respond to the present situation, according to a press release issued by EU-HOMs here today.

The EU-HOMs believe that no sustainable solution to Nepal’s political and economic problems can be secured through the use of force - only a process of negotiation and dialogue can bring about a stable future. The EU welcomed the peace process initiated last year by the government - and encouraged both sides to search for a peaceful settlement. The EU-HOMs strongly condemned the systematic and violent Maoist attacks against the government November last year that effectively brought an end to the peace process, the press release states.

It is a democratically elected government’s legitimate right - and indeed its responsibility - to secure law and order and to protect its people against acts of violence. Consequently, the EU-HOMs support the measures taken by the government following the unilateral Maoist violation of the de-facto ceasefire last year.

However, the EU-HOMs are concerned about the serious deterioration in the Human Right situation in Nepal since the proclamation of the State of Emergency on 28 November last year.

The serious violations committed by the Maoist insurgents are systematic in character - indeed it appears that the use of terror and intimidation against the general populace is central to Maoist strategy. The EU-HOMs condemn such acts of violence in the severest terms, according to the press release.

It is appreciated that the government has recognised and announced publicly that abuse on the side of the security forces should not be tolerated - and professed the need for improvement as well as cooperation with outside parties to achieve this.

The EU and some of the Member States have over the last years provided substantial assistance to the government aiming at further democratisation, promoting good governance and Human Rights and - not least - as the overall objective the elimination of poverty in Nepal.

The EU-HOMs recognise that the development efforts of the government - and its development partners - have not succeeded in bringing about any significant improvement in the living conditions of large segments of the population - in particular the rural poor.

The majority of the population remains without the most basic social services in areas such as education and health - and is left without employment opportunities.

In this regard the EU welcomes the poverty focus and the pro-poor approach of the combined 10th Plan/Poverty Reduction Strategy Paper and the Medium Term Expenditure Framework.

However, in light of the present situation the EU-HOMs strongly believe that urgent measures need to be taken in the short term in response to the emerging insurgency.

A costly counter-insurgency campaign is on going. At the same time development has come close to a standstill. The 10th Plan/PRSP set the development priorities in the medium term - 3-5 years - perspective. However, the unprecedented insurgency will seriously limit or - more likely - foil the achievement of the poverty objectives outlined in the 10th Plan/PRSP if not combined with short term interventions.

EU-HOMs firmly believe that peace and development go hand in hand: no peace without development. Peace and stability in Nepal cannot be reestablished without accelerated development targeting the rural poor. Lack of development in rural areas has been exploited by the Maoist movement and has fueled the insurgency to the devastating level of today.

Rapid and focused interventions aiming at improving the living conditions of rural poor and targeted measures to get social delivery mechanisms in place in rural areas are adequate and urgently needed responses to the insurgency.

Poverty is not the only root-cause of the insurgency - and consequently poverty reduction measures are only part of the solution. The low standard of governance at both central and local level is another major contributing factor. The widespread corruption at all levels of government not only deprives the population of financial resources for development and social improvement. It also reflects an unacceptable neglect at political level of the apparent needs and aspirations of the people.

"Regrettably, the anti-corruption measures called for at the last NDF in Paris in 2000 have not materialised". However, the EU-HOMs welcome the recent initiatives taken by HMG/N to combat corruption and expect that all responsible political parties will back the corruption control bill - and that necessary action will be taken without further delays, the EU press release says.

The EU-HOMs would also like to express appreciation of the various other steps taken by the government in the overall reform process - and encourage the government to continue along that line. The emphasis on decentralisation in the 10th Plan/PRSP is of particular importance in order to bring about any improvement in social deliveries to the rural population - also in the short-term perspective.

The civil service reform process is equally important in this regard.

The root-causes of the present conflict are closely interlinked - consequently a multi-pronged approach is required to get development back on track and to improve governance at all levels.

A precondition for any such multi-faceted action is first of all political determination and continuity.

The situation calls for all responsible democratic forces in the country to work towards the shared goals - the restoration of peace and stability in Nepal. Only political stability can bring about the stable and prosperous future the people of Nepal deserves.