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January, 2003 |
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Sectoral |
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Demands
of Freight-forwarders by
Rabindra Man Singh It has been realized by both the government and the private sector that the dry port in Birgunj will support the import and export business of Nepal. But the dry port is not brought into operation though years have passed since its construction was completed. As a result, the businessmen are still experiencing the same hardship and difficulties. Why is there a delay in operating the dry port? What is the reason behind not reaching an agreement with India to operate railway services to this dry port? The government should clarify. Export Processing Zone It has been years since the government declared to set up ‘Export Processing Zones’ in various parts of the country. It had been mentioned in the budgets of the previous fiscal years that such Zones would be set up in three different parts of the country. Now we feel that one such zone is urgently needed in Birgunj so that it can facilitate all the transactions relating to export business. Nepal-India Trade & Transit The matters related to trade and transit between Nepal and India are not moving ahead in the way as desired. So, we feel that an Nepal-India cell specialized in this field should be set up under the concerned agency comprising experts from the related fields. Simplifying trade There should be such an environment where trade can be carried on without any unnecessary complication. The work at the customs points should be expedited quickly. The procedures should be simplified. The mentality of the employees in customs and revenue offices should be corrected. For this, government should create a conducive atmosphere no matter how. It may increase the benefits to the employees or use any other means. Like in other countries, Nepal also needs to introduce Advance Clearance System. The Cargo Complex at the Tribhuvan International Airport has not got even a x-ray machine as yet, though we have been demanding it for years. The current process is so impractical that businessmen are required to go from place to place to get the export documents prepared. The current system should be replaced by a One Window System. All the related bodies should be brought under a single umbrella. Emphasis on export It is obvious that there has been slowdown in our business due to various reasons. The Government is not taking any initiative to improve the situation. No serious initiative has been taken as yet for the Export Year 2003. Emphasis on domestic investment The economic condition of the country is deteriorating due to political instability and lack of security. To encourage investment, both domestic and foreign, the government should lay emphasis on security arrangements and physical infrastructure. The government should be careful not to let the spirits of the entrepreneurs go down in spite of the decline in the economy. Lesson to learn The turmoil in the country has an adverse effect on trade and tourism along with other sectors. In other countries, trade and tourism sectors are rarely affected by conflicts and clashes that take place in the country. Sri Lanka can be taken as an example in this regard. Nepal should learn a lesson or two from Sri Lanka. Employment Ever growing unemployment is one of the causes of the present crisis. So, the government should lay emphasis on domestic as well as foreign employment by taking the help from the private sector. Promotion of tourism It is obvious that the situation in the tourism sector is not positive at present. The controversy over the national flag carrier RNAC may inflict further damage on the tourism sector, which is already worse. So, the problem of the RNAC should be resolved without politicizing it. Nepal Tourism Board should be activated to promote tourism. The government should play the role of facilitator in this regard. Board on its part should move ahead in consultation with the private sector. Labour policy We, the private sector, have been demanding such a labor policy that will help industrial development. But our demand has not been taken into consideration yet. We want hire and fire provision in the law. Implementation The government is very quick in expressing its commitment to reach an understanding with the private sector before moving ahead in all the relevant sectors, but experiences show that all those commitments are limited only in words. We would like to see the commitments being implemented. We, the freight forwarders, have with the help of the experts of the related fields, identified a number of problems in promoting and simplifying the trade. We had submitted our recommendations to the concerned minister of previous governments. Unfortunately, these suggestions and recommendations have not been implemented yet. However, as the [resent government consists of the professionals from the business trade sector, we are hopeful now. (Singh is the President of Nepal
Freight Forwarders' Association. This article is based on his
presentation at the interaction program organized by SEJON in Kathmandu
early December 2002) Power Export to India by ENESKE Switched-on
idea Plugged-off market
It is something even politicians making populist promises have begun to admit in public. Former Water Resources Minister Govinda Raj Joshi, for instance, was no exception when he was addressing Nepal Electricity Authority’s anniversary a couple of years ago. Nepal would be inviting disappointment if it is too hopeful on the Indian market to sell its power, the Congressman had said confidently. To press his point home, he was giving examples. “Their (India’s) thermal plants are doing great jobs. So why should they pin their hope on our hydropower?” That was former Minister Joshi who has no technical and academic background on water-related issues unlike the incumbent water resources minister - Deepak Gyawali, who is a water resource engineer. Fast forward to the present. The way power sector is developing in India does not withstand the increasing number of Nepali hydropower projects designed in papers to export to the immediate southern neighbour. True that India’s Tenth Plan aims at supplying to all (Indians) by 2012. With its electrification rate at 43 percent, the immediate southern neighbour in 2000 had around 580 million of its population without electricity, according to the Indian Planning Commission. During its Ninth Plan Period (1997-2002), India could add only 19,000 MW to its capacity against the target of 40,000MW. The figures are of course adequate to make the Nepali officialdom quite buoyant on export-oriented projects like, say, West Seti, the 750MW storage type project an Australian company is aspiring to build and operate. What makes the officials more optimistic is the draft of the Power Purchase Agreement (PPA) the Australian company has already sent to the Power Trading Corporation of India. “Once they negotiate on the document, the PPA could be signed by the middle of next year,” said a highly-placed official at the Department of Electricity Development. “Once the PPA is signed we would give SMEC the generation license.” The law of the land requires any Independent Power Producer (IPP) to sign the PPA with the buyer - whether Nepal Electricity Authority or any foreign company - before it (the developer) is awarded with the construction license. The officialdom is also beaming at the Indian agencies’ interest in the 300 MW Upper Karnali Hydropower project - one of the most lucrative ones among the planned run-of-river schemes in the country. Add to the list the three Arun projects - Arun III, Upper Arun and Lower Arun - the Asian Development Bank has floated under South Asia Subregional Economic Cooperation (SASEC), a concept the multilateral agency has sponsored in line with its brainchild South Asian Growth Quadrangle. Involvement of large Indian government-owned electric utilities including National Hydropower Corporation or National Thermal Power Corporation of India in the Arun projects totalling to around 1,050MW could be a possibility, ADB officials believe. “It could also be a joint venture between the public and private utilities of India,” Dr. Richard Vokes, Country Director of the Asian Development Bank was quoted as saying by a daily newspaper earlier this year. But, the problem is that the bank has not heard anything from India even more than a year after it corresponded about the projects to India. “We are yet to get any response,” Vokes said at a recent press meet of the bank. It is this silence on the part of the immediate neighbour that waters down the National Hydropower Policy’s crux — using electricity as an export-oriented product. Now, consider why should India choose to remain silent on hydropower, especially the one to be imported from Nepal. Even as India’s power capacity addition during 1997-2002 was only 47.5 percent of the target, the plant load factor (sometimes called the capacity factor) of the thermal and nuclear units registered a big increase. The average capacity of thermal plants in India increased from about 54 percent in 1990-91 to about 70 percent in 2001-02. That of nuclear units went up from 80 to 86 units in the last five years. Result: The National Thermal Power Corporation and the Nuclear Power Corporation of India are earning handsome profits. But that is no good news for the State Electricity Boards in the Indian states. They accrued losses of about 2.4 trillion Rupees (Indian currency) between 1997-2002. Meaning, India has a genuine reason to focus on thermal and nuclear plants for electricity generation. As per the Hydropower import, it would definitely prefer cheaper deals like the ones it has struck with Bhutan. Water resources experts say the Indian government is more interested in the kind of hydropower development it has been engaged in Bhutan. India is already buying electricity power in dirt-cheap price of Rupees 2.40 per unit from the 300MW Chukha Hydropower Project it developed in Bhutan investing 60 percent of the capital as grant and the remaining amount as loan. Under similar financial composition, New Delhi has started yet another hydropower project - the 1000MW Tala — in the Dragon Kingdom. The average price tag of per unit electricity in Nepal is more than Rupees six - one of the most expensive one in the world. “Either we should also be able to bring the price down as Bhutan did, or we should stop becoming upbeat about exporting power to India,” experts say. Bringing the price tag down would be almost a mission impossible for the IPPs since most of them develop the projects with the money lent by financial institutions. Given the political risks involved in the country, the moneylenders would like to earn back their investment as soon as possible. Ditto is the case with investors who would like to make sure they earn back their investment at the earliest. All these pressurising factors boil down to the tariff. But, even the northern Indian states, that are in immediate need of around 15,000 MW power, are in no mood to cough up that extra money for power - considering the subsidy they are receiving from their central government. Meaning, hydel projects aimed at exporting power to India do face an uphill climb. No wonder why even politicians making populist commitments are gradually toning themselves down on power-export to India. |
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