Business News (Business Age)

Business News

Govt Offers Discount in Royalty for 60 Peaks

His Majesty’s Government has decided on partial and total exemption of royalty on 60 mountain peaks of Nepal to give impetus to Destination Nepal Year 2002-2003, the golden jubilee celebration of the successful ascent of Mt Everest and International Mountaineering Tourism Year, 2002.

According to the Ministry of Culture, Tourism and Civil Aviation, 75 percent of the royalty has been waived on 40 mountain peaks which have been opened for mountaineering for three years from 2002 to 2005.

Similarly, royalty has been waived hundred percent on the 20 mountain peaks in the relatively backward Far Western Region for three years from 2002 to 2005.

The government hopes that the arrangement will ensure proportionate development of socially and economically backward regions of the country.

Nepse Enlists 5 More Companies

Nepal Stock Exchange (Nepse) has added five more companies in its earlier list of category ‘A’ and the number of companies enlisted in this category has gone up to 31, says a press release issued by the Nepse. The accession of these companies into the category ‘A’ has been accomplished according to the Security Exchange Regulations 1997. As per the regulation, the companies that possess paid-up capital over Rs 20 million, number of shareholders over 1 thousand, share book value not less than paid value, registered profit since three years and submitted their annual financial report within specific time are qualified to listing in the category. The Security Board has also asked the stock brokers to follow the format as stipulated by the board while submitting their financial and transactions report of the last fiscal year.

Rescission on Global Compact Held

With the aim to discuss on the principles of global compact to endorse them and to act upon these principles, the 8th workshop of Employer’s Organization in South Asian countries on ‘Promotion of Principles Contained in Global Compact’ was held from February 14 to 16.

"Global compact is an answer to the ills of globalization process which seeks to unite the powers of the market with the authority of the universal ideas," said Ravi Bhakta Shrestha, president of Federation of Nepalese Chambers of Commerce and Industry (FNCCI), during his inaugural address.

He further added that global compact brings into focus the social responsibility of business action and emphasizes on self-regulation and control of business firms.

"It is a challenge to the enterprises of South Asian region to implement Global Compact, to act and to adhere to them," related Mr. Suraj Vaidya, Chairman of Employer’s Council of FNCCI.

"We must be realistic in our approach of implementation and due consideration must be given to the level of economic growth and creating and changing our understanding to globalization maintaining our identity within the change and adopting the principles enshrined in Global compact", Mr Vaidya added.

The global concept calls upon the business houses to demonstrate global leadership, by upholding decent ethics. The ‘global compact’ calls for building social and environmental frame works, aimed at ensuring an open and free market economy and at the some time, creating opportunities for people every where to get access to resources and to share the benefits of the global prosperity.

Global compact principles are intended to reorient world corporate bodies and enterprises to be involved in working in tandem with the entire humanity. International Labour Organization (ILO) and IOE also have accepted the challenges of implementation of these principles and promoting the ideas among employer’s organization. The Labour Standard related principles are said to be important to bring into practice, because they need to be informed well and be supported to understand the GC Principles.

Moreover, the nine principles of the Global compact are drawn from the Universal Declaration of Human Rights, Labour, ILO Declaration on Fundamental Principles and Rights at Work and Environment and the Rio principles of Environment and Development.

Representative from the Employer’s Organization of South Asia, Mr Suzuki and his colleagues from Nikkerien, Mr Rajen Melhotra from ILO, New Delhi and Ley la Tegmo-Reddy, ILO office Kathmandu were among the major participants of the three day long workshop.

NRB to Invite ICC Bank for NBL

In the latest development of the long running saga of the handover of management of Nepal Bank Limited (NBL), one of the two largest ailing banks, the Nepal Rastra Bank is preparing to invite ICC Bank Ireland for final negotiations.

According a source at the central bank, the ICC team would be invited shortly for the final takeover negotiations. Though Price Water House Coopers has quoted the lowest price demanding US$ 4.95 million in its financial bid, a serious inconsistency in its financial and technical bid disqualified it to enter into the final take over negotiation. Three companies were vying for the management takeover of NBL, the last one being Ernst and Young International.

Earlier, an evaluation team led by a top NRB official was formed to evaluate the bids of the competing firms but the team could not make any recommendation due to internal squabbling. Another team of independent experts then was formed, which put Price Water House Coopers in the number one position and recommended inviting it for final negotiations.

However, the recommendation soon engulfed into controversy after the World Bank, the principal lender to the whole project, raised serious questions labelling the overall process as ‘a faulty evaluation procedure’ and asked to revaluate the bids.

The latest decision to invite the Irish ICC Bank was based on the reevaluated recommendation of the team of independent experts, informed the source. The ICC had demanded US$ 4.98 million for the management take-over for the period of two years. Ernst and Young International, the third competitor, had quoted US$ 8.69 million.

Earlier, a series of meetings were held between the World Bank and the central bank to sort out the differences on the report of the first evaluation of the team. The WB had even threatened to retract its financial assistance commitment if its concern was not addressed properly and the overall process is was not completed by February 15.

The WB had said that if the process is not completed within the stipulated time, it would be difficult for it to get the final approval from the bank’s board meeting slated for July.

However, the WB has clarified that the final decision of issuing loan will depend upon the nature of agreement between the NRB and the bid winner. "The WB has said that the project would be financed only if it is convinced that the deal was good and fulfils all requirement of ‘procurement guideline’ of the WB," said the source.

The board of the WB is scheduled to approve the loan assistance worth Rs 830 million during its board meeting. All the expenditures required before final approval are being made available through a WB fund for Project Preparation Facility.

Earlier, the WB had pointed out the need to add some clauses in the agreement to prevent an easy way out of the contract winner after the completion of the contract period. According to an NRB source, World Bank had argued if the contractor makes a easy way out just by recommending for liquidation of the bank, there will be no use of investing Rs 830 million.

The latest development comes as a step ahead in the government’s financial reform programme. Earlier, the central bank had signed an agreement with Deloitte Touche Tomatsu, an international consultant, for the management takeover of RBB, another ailing bank.

The company’s bid, with US$ 5.9 million as a consultant fee, was the lowest among the bidders. The nearest rival Arthur & Anderson had quoted US$ 8.1 million for the two-year management contract of RBB.

Safa Tempos on the Verge of Collapse

The battery-operated safa tempo public transportation business, which were also introduced in India, Bangladesh and Sri-Lanka following their operation in Kathmandu as a model public transport system is possibly headed for collapse.

The nonpolluting electric vehicle entrepreneurs are urging the government to immediately work towards the regular supply of rechargeable deep cycle batteries and provide subsidy on electric tariff in recharging the batteries.

It is learnt that about 200 electric vehicles are grounded for lack of batteries and transport entrepreneurs have so far invested approximately Rs 500 million in the safa tempos. But the entrepreneurs are complaining that their is facing crisis as the return are lower than the investment. Entrepreneurs blamed Lotus Energy (the agent in Nepal for supplying US made Trojen batteries) for not supplying the batteries on time even after paying the charges and selling the battery which costs Rs 52,000 at normal rate for Rs 70,000 in per black.

Government mismanagement, lack of parking facilities, shortage of batteries and lack of government grants are said be some of the factors that have pushed this transport system into crisis.

The participants of the interaction jointly organized by Nepal Safa Pribahan Entrepreneurs Association and Nepal Electric Vehicles Charging Association informed that the safa tempo service which started with 70 tempos in the beginning reached 600 at one time. But the numbers of the vehicles has now decreased to 350.

These vehicles use a set of 12 batteries, which provides energy to run for 70 km, and after this, it needs to be recharged which costs Rs 270. The batteries can be recharged 750 times and can be used for about 18 to 24 months after which the batteries become useless.

In September 1999, the government banned diesel run three-wheeler Vikram Tempos to ply around the valley. It was then, that the electricity run three-wheelers started gaining popularity. The first electrical three-wheeler vehicles were manufactured in Kathmandu by assembling imported American parts and batteries by the KMC.

After the successful trial, the Global Resource Institute assembled eight more tempos with the financial support of US aid. The vehicles were run from Mangal Bazar to Baluwatar. Because of its environment friendliness, it soon became popular. This attracted transport entrepreneurs. Most of the tempo owners converted their vehicles into electric run tempos with the loan provided by government at a low interest rate.

FNCCI Joins Global Fight Against Child Labour

President of Federation of Nepalese Chambers of Commerce and Industry (FNCCI) Ravi Bhakta Shrestha left to the Netherlands to participate an international conference on child labour on February 23.

Representing the employers’ organisations in Nepal, Shrestha took part on a three-day international conference on ‘Combating Child Labour and Building Alliances Against Hazardous Work’.

It is learnt that the representatives of the government, employers’ groups, trade unions, NGOs and the labour experts mainly discussed on the implementation procedures of party documents adopted by International Labour Conference on the fight against the worst forms of child labour. Altogether 300 participants around the globe participated in the conference. The grand gathering of labour experts was jointly organised by International Labour Organisation (ILO) and the Ministry of Social Affairs and Employment of Netherlands.

LDCs Seek Liberal WTO Conditionalities

Nepal and other Least Developed Countries (LDCs) of Asia the Pacific and Africa have identified four sectors of assistance which would lend support to their accession process to the World Trade Organization (WTO), the global trade body.

Joint Secretary at the Ministry of Industry, Commerce and Supplies (MoICS), Prachanda Man Shrestha informed this, who has just returned from Bangkok after representing Nepal in a seminar organized by the United Nations Economic and Social Council for Asia and the Pacific (ESCAP) from February 18 to 21.

"The seminar has concluded that LDCs need strong assistance in financial technical networking and study sectors, in particular before they enter the world trade body, said Shrestha, who is also the chief of the WTO cell at the MoICS.

He also informed that within three months. ESCAP would mull the four sectors of assistance identified in the seminar, which the ESCAP may provide to the LDCs later on. The seminar, which was participated in by nine LDCs also emphasized on implementing Special Differential Treatment to LDCs as compared to other member nations citing that equal WTO conditionalities to developed nations as well as to LDCs would be no more viable for the LDCs.

His indication was towards the 30 LDCs, out of 49 LDCs of the world, which were automatically awarded the membership of WTO, as they used to be the members of GATT-the former world trade body before WTO was formulated in 1995. The 30 LDCs, including countries like Bangladesh, are supposed to be out of the rigid WTO conditionalities mainly that of tariff binding and others.

Of the 49 LDCs, 10 LDCs have not yet applied for WTO membership. However, WTO entry of the entire remaining nine applicant LDCs has been impending since 1995. Those countries are Nepal, Bhutan, Cambodia, Laos, Yemen, Vanuatu. Sudan, Samoa and Cape Verde which also took part in the seminar.

The seminar entitled "Regional Seminar on Facilitating the Accession of ESCAP Developing Countries to the WTO" also assessed the Doha Ministerial Declaration, which in last November had issued directives to the WTO governing body with regard to facilitating LDCs smooth entry into the WTO.

Interaction on ‘Nepal’s Accession to the WTO’

In an interaction programme entitled ‘Nepal’s Accession to the WTO’ held in Kathmandu February, participants expressed their view that the Nepalese business community still lack meaningful approach to the global trading regime and thus need to explore opportunities to confront the challenges posed by world wide web of globalization.

Speaking at the programme jointly organized by the Ministry of Industry, Commerce and Supplies and the United Nation Development Programme (UNDP), Rajendra Kumar Khetan, second vice president of the Federation of Nepalese Chambers of Commerce and Industry (FNCCI), emphasized on legislation improvement, more capital injection, improved technology and maintaining products quality as the mandatory measures for Nepal to address before entering WTO.

He further went on suggesting that Nepal should explore areas in which it can compete with products in the international market.

"Nepal, along with other Least Developed countries (LCDs), should initiate its advocacy on the part of LCDs so that concerns of LCDs won’t remain unheard in multilateral trading regime" said Khetan.

Prachanda Man Shrestha, Joint Secretary of the Ministry of Industry, Commerce and supplies (MoICS)and chief of the WTO cell said that Nepal currently is in a phase of devising preparatory mechanisms to join WTO.

"Since the membership of WTO entitles a country to abide by inescapable obligations, we are trying to forge LCD’s concerns in this regard to safeguard our respective national interests," added Shrestha.

Throwing light on maximum benefit that can be reaped from a large global market, Shrestha related that the government is in the process wealth of biodiversity so as to better prepare itself for agro- patent rights enshrined in Trade Related Intellectual Property Rights (TRIPS) agreement.

Dr Posh Raj Pandey, National Program Manager at Nepal’s Accession to WTO, on the same occasion, projected the history of WTO and its various dimensions.

"Market access, freedom of transit, predictable and stable environment, economic good governance and access to dispute settlement body of WTO are the prime boons of joining WTO," remarked Pandey.

WTO, which has been set up in 1995, has, till now, incorporated 144 nations.

NDF Delegates Praise The Fulbari

Nepal received two aid packages – from the World Bank and the International Fund for Agriculture Development (IFAD) to the tune of US$ 40.56 million.

The World Bank credit assistance of US$ 22.56 million is to implement the Telecommunications policy and serve as a platform from which Nepal can undertake key sector reform initiatives. The main objective of the project is to strengthen the policy, legal and regulatory framework in the telecommunications sector in order to attract private sector investments and facilitate their access to rural telecommunication service.

IFAD is making available a US$ 20 million financial assistance for the implementation of the Western Uplands Poverty Alleviation project (WUPAP). The project covers 11 upland districts of the fair – and Mid – Western Development Regions, which are most remote and characterized by high poverty levels. The project duration is for 11 years and it will focus on boosting agriculture production, livestock and non-timber forestry products. An estimated 115,000 households are expected to benefit from the project.

As has been learnt, when asked how the deliberations on the whole went, a Delegate said after returning from the Day 2 meet at Fulbari, "There was a sharp contrast in the attitudes and approaches of delegates at Kathmandu and Pokhara", adding, "the Kathmandu meet was tough, tense and formal, but at Fulbari, almost all the delegates felt so relaxed and comforted, that hardly any hitch was evident while concluding the deliberations in an all-round delightful atmosphere."

Added another Delegate from the Middle East in his comment jotted down on the Hotel’s Guest Book:

"The year 2002 was special for me. I was amazed by the Fulbari Resort & Spa.. Frankly, I did not expect to see such a well-equipped hotel in Nepal with a standard of service that matches with the best anywhere in the world.. In my future visits to Nepal, I’m sure I will be staying at this Hotel" Comments from many other delegates ran along similar lines, it is learnt.

-By Business Age Reporters