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Business News |
If the recent indicators are any guides, the trend of private sector investors being attracted to infrastructure projects is in a growing trend.
Soon after the government announced in the parliament that the proposal from a US company is accepted for the development of Arun III, a 402-MW hydro electricity project in eastern Nepal, proposals were presented to the government by five Nepali private sector companies to manage the ever-burgeoning garbage disposal problem in the capital. More recently, an MoU was signed with a French MNC to develop an international airport near Lumbini, the birthplace of Lord Gautam Buddha.
The government has officially not disclosed the names of the parties whose proposals for hydro-power development at other places have been accepted. According to reports, 11 proposals for feasibility studies and 62 proposals for project development were received from various companies from within the country and abroad after the government asked for such proposals some eight months ago. However, those interested in Kathmandu valley’s solid waste management are all Nepali companies: Bhomjan Environment Energy System, Luna Nepal Chemicals and Fertilizers (P) Ltd., NETCO International (P) Ltd., Indigenous Youth Council and Sushil Vanaspati (P) Ltd.
News of the submission of the proposals comes at a time when the problem of solid waste dumping site for the capital became aggravated after the residents of area near the existing dumping site at Gokarna stopped municipality trucks from entering the dumping site. Likewise, after the government’s announcement of accepting the hydro-power development proposals, the press has reported that the government has signed agreement with Asian Development Bank for a Rs. 3520 million loan for electricity sector development accepting such a condition which means that the existing power tariff will be increased soon by at least 30%.
While rejecting Nepal Battery Ltd.’s petition for a stay order on the Labour Department’s directive to implement the decision of Labour Tribunal, the Supreme Court is learnt to have decided to expedite the hearing on the writ petition of the company against the Labour Tribunal’s decision.
A Labour Tribunal early May this year had asked the government to review rules governing requirement of ‘work permit’. It had also asked Nepal Battery management to revise salary and perks of some of the members of the company’s staff.
While the company’s writ petition against the Tribunal’s decision was under consideration at the supreme court, the Labour Department issued directive to the company to implement the decision of the tribunal. The company filed another petition at the Supreme Court for a stay order on the Department’s directives, but that petition was rejected. Meanwhile, the Supreme Court is learnt to have decided to expedite the hearing in the original writ of the company as soon as the respondents furnish their replies.
A five week long strike at Biratnagar Jute Mills Ltd. has come to an end when the striking workers agreed to stop their strike and return to work on July 4. The workers had gone on strike since May 29 in response to the management’s decision to withdraw facilities and privileges enjoyed by the workers. The strike took a dramatic turn when the workers started, as per their phase-wise program, to barricade the Jogbani Entry Point at Nepal-India boarder for three consecutive days beginning June 27. The barricade blocked all the traffic movements at the boarder point resulting in a daily loss of revenue amounting to between Rs. 3 and 3.5 million to the government.
On June 29, the police used force to open up the entry point. In the ensuing melee, police lathi-charged, blank fired and tear gassed the workers. Some injuries were reported from both sides. In response to the use of police force, Biratnagar town was closed for a day and the business of the Lower House of Parliament was also stalled by the opposition party members demanding the Home Minister’s clarification on the use of force to control the situation at BJM.
Of the 19 demands placed by the striking workers, all but one (that of the resignation of the Chairman, Manoj Kumar Upadhaya) have been entertained by the management. However, observers regard present agreement as only a temporary truce. The parties have agreed to return to status quo. But the moot question of whether to continue operating or to liquidate the mill is still unanswered.
Established in 1936, BJM is one of the sick and dying huge industrial units of Nepal. At present, about 2000 workers are employed in the mills. After failure of two management contracts signed under the government’s privatization policy, BJM was taken over by Nirmal Kumar Byas in 1999 under yet another agreement which requires him to pay royalty of Rs 9.6 million per year for a period of 20 years. Although the government owns only 46% share in BJM, its managment responsibility is being taken over by the government. The UML government jacked up the government’s share ownership in the company from 12 percent to 46 percent by buying the shares from Indian shareholders, setting, what observers describe, as the first example of irresponsible decision on the part of the government to invest in a sick and dying enterprise. Successive mistakes were committed by granting managment contracts to private parties.
It is interesting to note that Prime Minister G. P. Koirala had started his political career as a trade union leader in BJM, in the mid-forties. And he now seems to be getting the taste of his own medicine. Earlier, he had warned the workers that he would liquidate the company if the workers did not cooperate in running the mill. Given the level of politicization of workers and also of the management of BJM, it is doubtful that the government will ever be successful in its liquidation, observe those who have been closely monitoring public enterprise management in the country. BJM demonstrates yet another example of how public money is being doled out to keep afloat an inefficient state-owned enterprise, says one such observer.
Soaltee Crowne Plaza and flight-catering company LSG Sky Chefs – a subsidiary of Lufthansa German Airlines – have signed an agreement for setting up a flight catering unit in Nepal. Under the agreement, LSG is to provide technical expertise for the establishment and operation of the flight catering unit, according to a press note released by Soaltee.
The first of its kind facility centre in the country is to be set up near the Tribhuvan International Airport with modern facilities and services, and the company sources say, it is expected to be of international quality and standards.
Bass Hotels and Resorts, the hotel business of Bass PLC of the United Kingdon, owns, operates and franchises some 2700 hotels worldwide including Soaltee Crowne Plaza. Soaltee at the moment holds 85 percent market share of the total flight catering business in Nepal. It serves RNAC besides several international airlines.
Two companies, United Telecom Ltd. and Nepal Gateway Communication Pvt. Ltd., have responded to tender called by Nepal Telecommunications Authority (NTA) for operation of basic telephone services based on wireless in local loop (WLL) system. Altogether, 11 companies had bought application forms.
Earlier, NTA had also sought tenders from private companies for the operation of cellular mobile phone. While 21 companies had bought application forms for the service, only 8 (Silicon International Cellular Asia Pvt. Ltd., BPL Broadband Network Pvt. Ltd., World Tel Pvt. Ltd., United Telecom Pvt. Ltd., Bharat Global Ltd., Rumeli Telecom AS, Khetan Group Pvt. Ltd. and Investcom Global Ltd.) have submitted their applications.
Export Promotion Committee (EPC) of the Ministry of Industry, Commerce and Supplies and the Federation of Nepalis Chambers of Commerce and Industry (FNCCI) have signed an agreement for construction of an international standard exhibition hall in the capital city. This was made known in a press release issued by FNCCI.
Under the agreement, finances necessary for construction of the hall would be collected jointly by FNCCI and the EPC states the release. The hall, informs the press note, will be completed within three years.
The only private sector airline to fly outside Nepal, Necon Air (P) Ltd. has obtained permission to fly to two more destinations, Calcutta and Delhi.
Necon Air already flies to Indian cities of Patna and Benaras. Although it had earlier received permission to conduct flights to Calcutta, the airline had stopped flying to the city because it was required to fly via Biratnagar and it was said that the hopping route could not get enough passengers.
The airline has also received permission to fly to Lucknow, but has not started the service to this destination as yet. However, it is also learnt that the allocation of seats to Necon for conducting flights to India is to remain 610 per week as earlier.
By command of Her Majesty the Queen of Britain, president of Nepal Britain Chamber of Commerce and Industry (NBCCI) Rajendra K. Khetan has been invited at Buckingham Palace to a Garden Party being the first ever invitee from Nepal for such an occasion. Khetan is also the Vice President of FNCCI, the apex chamber of Nepal.
During his stay in London, Khetan will also have dialogue on issues related with bilateral trade and investments with the British government officials, President and Office Bearers of the Britain Nepal Chamber of Commerce and Trade Partners UK (known earlier as Britain Trade International), says a press release of NBCCI.
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