Thursday, July 6, 2017

Amarasekera appointed as new Ncell managing director

Ncell has replaced its managing director Simon John Perkins with Suren J Amarasekera.
Perkins, according to the company, will assume a new role at the head office of Axiata – Ncell’s parent company – in Kuala Lumpur supporting South Asia operations.
Amarasekera brings with him 25 years of extensive experience in the telecommunications industry, including nine years of experience as chief executive officer and 16 years of senior management experience in globally renowned telecom companies such as Singapore Telecommunications, Sri Lanka Telecom’s Mobitel, Maxis Berhad in Malaysia and Aircel in India, reads a press note issued by Ncell.
"I am proud to have been given this opportunity," he said, adding that he will be looking forward to joining Ncell and building on the brand to be one that is loved by its consumers, while contributing to the vision of digital Nepal and delivering on Axiata’s vision of advancing Asia.
Amarasekera has previously served as strategic projects director in Axiata Group Berhad’s corporate headquarters in Kuala Lumpur, Malaysia, focusing on key group initiatives across its South Asian operations in Bangladesh, Nepal, Sri Lanka and Pakistan.
The board directors of Ncell have stated they are confident that Ncell will achieve new milestones under his leadership, including digital inclusion for the overall advancement of the country.

Insurance Board cuts cost of riot, protest insurance products down

Insurance Board (IB) – the insurance sector regulator – has reduced premiums on insurance products that cover damages inflicted by riots, strike, malicious attacks and sabotage terrorism by up to 50 per cent.
The new premium rates will come into effect on July 16. The board had made it mandatory for those buying insurance products to protect themselves from risks related to riots, strikes and acts of terror after the Maoist insurgency reached its peak. The regulator has now reduced the premium on coverage of these risks following decline in the number of such violent incidents.
According to the board's director Shree Man Karki, the board had revised the premium rates to relieve customers from extra financial burden, as cases of riots, protests and acts of terrorism are not heard very often.
The board has reduced premium on riot and strike insurance coverage for private and commercial buildings to 0.02 per cent of the coverage amount from 0.026 per cent of the coverage amount.
Similarly, premiums on riot and strike insurance coverage for warehouses range from 0.035 per cent to 0.060 per cent of the coverage amount.
Previously, the premiums on these products ranged between 0.044 per cent to 0.08 per cent. Premium on riot and strike coverage for factories, on the other hand, has been reduced to 0.04 per cent from 0.05 per cent of the coverage amount.
Likewise, premium on riot and strike coverage for shops has been reduced to 0.08 per cent down from 0.104 per cent of the coverage amount.
For movie theatres, exhibition halls and parks, premium has been brought down to 0.05 per cent of the coverage amount – down from 0.07 per cent – while media houses and telecom companies have to pay a premium of 0.035 per cent of the coverage amount – down from 0.044 per cent – to protect their assets from risks related to riot and strike.
The board has also revised premiums on riot and strike insurance coverage for power houses, electricity transmission and distribution systems, and buildings under construction.
As per the revised rate, power houses and electricity transmission and distribution systems will have to pay a premium of 0.035 per cent of the coverage amount, while buildings under construction will have to pay premium of 0.02 per cent of the coverage amount.
Likewise, the board has reduced the premium for malicious damage under fire insurance policy to 0.05 per cent of the coverage amount.
The board has also fixed the premium for household insurance at 0.1 per cent of the coverage amount.
Meanwhile, the Insurance Board has also revised premium on personal accident insurance coverage. From July 16, personal accident insurance product with coverage of up to Rs 2 million can be bought upon paying 0.01 per cent of the coverage amount. Currently, this premium rate is only applicable for personal accident insurance with coverage of up to Rs 1 million. 

Wednesday, July 5, 2017

GMR to sell Upper Karnali electricity to Bangladesh

GMR Upper Karnali Hydropower is planning to sign a power purchase agreement (PPA) with the Bangladeshi government.
GMR Upper Karnali Hydropower – a subsidiary of GMR Energy India – is preparing to sign grid connection agreement with Bangladesh Power Development Board (BPDB) and Haryana Power Generation Corporation (HPGC) to sell at least 300 megawatts (MW) to each.
A team from the Bangladeshi government is likely to visit the project site in western Nepal soon and start PPA negotiations with the developer.
"We have already signed the memorandums of understanding (MoUs) with them,” said chief operating officer of Hydro Business of GMR Energy Harvinder Manocha. "After BPDB and HPGC sign power purchase agreement with us, we will be able to obtain loans for financial closure."
The GMR Upper Karnali Hydropower is close to achieving financial closure.
GMR Energy India – the developer of the 900 MW Upper Karnali Hydroelectric Project – will evacuate energy produced by the project to Bangladesh via India.
Bangladesh signed a memorandum of understanding (MoU) with India’s NTPC Vidyut Vyapar Nigam (NVVN) to import electricity from Upper Karnali via India during Bangladeshi Prime Minister Sheikh Hasina’s visit to India in April 2017. "The tariff rate will be mutually finalised by GMR and Bangladesh after negotiations."
According to GMR, as Indian laws don’t allow private developers to export electricity produced in third countries over Indian transmission lines, Bangladesh signed a MoU with the state-owned cross-border electricity trading agency while GMR was the witness. "It is clearly written in the MoU that the energy that NVVN will supply to Bangladesh will come from Upper Karnali."
Manocha said that some international lenders have shown interest to provide loan for GMR’s Upper Karnali project as the developer is gearing up to sign PPA for 600 MW of the energy out of installed capacity of 900 MW. Developer has to achieve financial closure within the deadline of September 18, 2017 given by the Investment Board Nepal (IBN).
"Everything is moving ahead smoothly," he said, adding that the company wants to develop Upper Karnali as a regional project. "It will be a model project for foreign investors willing to come to Nepal."
When the project development agreement (PDA) was signed in September 2014, the cost of the 900-MW project was expected to hover around $1.03 billion. However, the developer believes that cost could escalate to $1.5 billion.
GMR has also shortlisted the bidders for civil and electromechanical works and bidders will be finalised soon. Once the project begins construction, around 5,000 people are expected to get employment opportunity. Nepal will receive 27 per cent free equity and 12 per cent free energy from Upper Karnali project.
Apart from that, Nepali suppliers of construction materials will also stand to benefit, according to the developer that had been given seven years to conclude the construction. The project must be handed over to the government after 25 years from the date of power commissioning, according to the PDA.
Despite all these positive developments, the project is facing a major roadblock from the Ministry of Forest and Soil Conservation as it recently introduced a new guideline ‘Utilisation of Forest Area by National Priority Projects’, which requires ‘land to land’ compensation for the utilisation of land in the forest area.
Earlier, the ministry was willing to provide 5,000 ropanis of government land for nominal lease fees and sought compensation for land area where permanent structures like dam, power house would be built. The developer is going to purchase 1,000 ropanis of private land in Dailekh and Achham districts.
On the other hand, as per the new forest rules, the developer needs to plant 25 saplings in another area of similar topography for chopping every tree for the project and nurture the saplings for five years.
The developer has complained about the recent stringent forest rules to the government. Private sector developers have also been urging the government to respect the PDA as a bilateral document and ensure policy stability for the development of the power sector.

Japan provides eight ambulances to Nepal Red Cross

Japan has provided eight ambulances to Nepal Red Cross Society (NRSC) under its grant assistance for Grassroots Human Security Project (GAGHSP) of the Japanese government.
According to a press release issued by the Embassy of Japan in Kathmandu, Japanese ambassador to Nepal Masashi Ogawa handed over the keys of the ambulances to NRCS chairperson Sanjeev Kumar Thapa amidst a function held at NRCS office today.
The total amount needed to procure the ambulances is Rs 9.8 million ($90,440). "The ambulances provided through the project are four-wheel-drives, providing safe and reliable service even under the challenging road conditions in Nepal," reads the press note.
Out of the eight ambulances, four have already been sent to Pyuthan, Gulmi, Udayapur and Morang districts last November. According to the statement, the NRSC plans to send three new ambulances to Jajarkot, Rautahat and Dhankuta later this month. The remaining ambulance will be sent to Khotang district after the monsoon.
The branches of the NRSC in those districts used to have only one ambulance, with some areas having no ambulance at all before these ambulances were sent. “It was difficult to respond to local calls for service, even in case of accidents or to transport urgently-needed blood,” further reads the release.

Nepse to go fully-automated from mid-November

Nepal Stock Exchange (Nepse) is planning to test an automated online-trading system from mid-August. It is also planning to replace the existing semi-automated system used for trading of stocks by mid-November.
According to Nepse, the fully-automated online trading system will be tested in mid-August while such system will be readied for the implementation by mid-November after incorporating necessary feedback and suggestions received from Nepse officials during the test phase.
"Currently we have intra-net trading system, which will be replaced by internet system whereby investors can place their trading orders from their computers from their home without requiring to come to broker's office," said the Nepse general manager Sitaram Thapaliya.
With the new online trading system, there will be new components of member portal system, surveillance system, and collateral system. "Like watching replay of a football game, we can go back to a certain transaction and check whether there has been any manipulation and take corrective measure if there has been any problem," he said, adding that an automated debit and credit system of cash from bank account and stocks from the dematerialised account of investors will be in place once the orders are matched and trading is executed through the online system.
The fully-automated online-trading system being developed by YCO – an information technology firm – will allow investors to put their orders to buy or sell shares online while everything, including payment, clearing and settlement, will be carried out electronically.
Following a long legal battle and tussle with Securities Board of Nepal (Sebon) – the capital market regulator – over the selection of YCO, the Nepse had signed the agreement with the firm for supply, delivery, installation and commissioning of the fully-automated online trading system in February after a court ruling came in favour of the vendor. The vendor has agreed to deliver the system within 14 months.
Issuing a statement today, Nepse said that the YCO has informed Nepse officials at a meeting that it has been working on various modules of the proposed project in a parallel way and will make the system available for test in mid-August.

Tuesday, July 4, 2017

Rs 221 billion in cash government budget surplus

The government's treasury has hit Rs 221 billion cash surplus mainly due to the failure to effectively execute the budget, rise in revenue mobilisation and carryover of huge cash balance from the previous fiscal year.
According to the central bank, the budget surplus is more than two-thirds of the funds that the government had planned to spend in various development projects for the current fiscal year 2016-17.
The government – in its budget for the current fiscal year 2016-17 – has allocated Rs 311.95 billion for capital expenditure. However, it has managed to spend only Rs 136 billion (43.88 per cent) of the allocation by yesterday.
Through the government failed to expedite capital expenditure, it has almost met its revenue target. "As of yesterday, the government has mobilised a total of Rs 551 billion in revenue compared to the target of Rs 565.9 billion," according to the Office of Comptroller general. "The mismatch of disappointingly low spending and high revenue moblisation has sent the government treasury into surplus," according to officials of Finance Ministry.
Last fiscal year, the government had transferred Rs 59.41 billion of cash balance to the current fiscal year's budget.
The expansionary budget – for the current fiscal year – had estimated to finance the budget deficit of the current fiscal year partly through the cash balance which is expected to remain at Rs 102.73 billion. "But, given that the low development expenditure and revenue mobilisation exceeding the target, the government is likely to have far higher amount of cash surplus in the current fiscal year," the Finance Ministry official added.
According to the vice chair of National Planning Commission (NPC) Min Bahadur Shrestha, the development spending was also affected due to election code of conduct. "As the local level elections were held in different phases, the code of conduct was in place for a long period," he said, adding that the government had to deploy many employees for election which affected implementation of many development projects. "Labourers and contractors as well as many people went to vote in the polls which created shortage of human resources in the project."
He, however, claimed that capital expenditure will cross 80 per cent by the end of the fiscal year.

Airliners reduce fare

Domestic airlines are marginally reducing the airfare to different destinations effective from tomorrow.
The Airlines Operators Association of Nepal (AOAN) meeting today decided to slash fuel surcharge rate following the recent reduction in the price of Aviation Turbine Fuel (ATF). The Nepal Oil Corporation (NOC) had from Monday reduced the price of ATF by Rs 4 per litre to Rs 82 per litre for domestic airline companies.
"Along with reduction in fuel surcharge, domestic airlines will reduce airfares to different destinations from tomorrow," said AOAN spokesperson Ghanashyam Acharya. "The price will come down from Rs 40 to Rs 181 depending on distance."
Though, the AOAN revises fuel surcharge when price of ATF fluctuates by at least Rs 4 per litre, the new airfare can vary depending on the respective airline companies.
According to AOAN, the new airfare to Dhangadi – the furthest destination from Kathmandu – will come down to around Rs 12,019 – including a Rs 3,620 fuel surcharge and a Rs 200 airport tax – from Rs 12,200 from tomorrow with the implementation of new fuel surcharge rate. Likewise, air travel to Simara – the shortest destination from Kathmandu that takes 15 minutes – will be lowered to around Rs 3,005 from Rs 3,045. "The fuel surcharge has been slashed by Rs 40 to Rs 735, according to AOAN.
The mountain flight is also expected to cost Rs 10,862 from tomorrow as against the current rate of Rs 11,000.
The fuel surcharges for Kathmandu-Nepalgunj and Kathmandu-Tumlingtar routes have been reduced by Rs 135 and Rs 77; respectively. Likewise, fuel surcharges for Kathmandu-Bharatpur and Kathmandu-Pokhara routes have been slashed by Rs 47 and Rs 66.
The NOC had been selling aviation fuel at rates much higher than market prices. Airlines have been passing the burden of fuel price on to travellers in the form of fuel surcharge, taking airfares beyond the reach of people.
Airlines currently have over 90 per cent occupancy rate due to poor highway road conditions, particularly the Mugling-Narayangadh highway section.
The people have been resorting to air transport service to travel inside the country. After witnessing a constant fall in passenger numbers in the last four years, the domestic aviation sector rebounded strongly in 2016, recording an all-time high air traveller movement.
According to Tribhuvan International Airport (TIA), the domestic air passenger movement jumped by 28.85 per cent to 1.75 million, as travellers chose to fly rather than drive over ‘bone-jarring’ national highways.
According to deputy at the Air Transport Division of CAAN Subhash Jha, lower fuel surcharge will provide some relief to travelers.
Domestic carriers received 393,548 more flyers last year.  The figure includes 27,893 passengers flown by nine domestic helicopter companies. The passenger movement was on a constant decline since 2012, marking a departure from the robust growth rates seen since 2008 when airlines were flying high due to competitive airfares, constant protests and road blockades, forcing travellers to take it to the air. At that time, rise in NGO/INGO staff movement during the peace process and a real estate boom also helped airlines to do a brisk business.
Airlines saw a heady growth of 13 per cent in passenger movement in 2008. The growth rate jumped to 33 per cent in 2009, as fares were cut amid stiff competition. Although passenger movement increased 12.83 per cent in 2010, the growth rate started dropping in 2011 and recorded negative growth from 2012 to 2015.
The trend reversed in 2016. Nepali skies saw 73,876 flights during that year, up by 12.16 per cent than in 2015.