Government agrees to provide Rs 2 billion loan to NOC

The cabinet meeting today decided to provide another tranche of loan to the technically bankrupt state oil monopoly.

The government will provide Rs 2 billion to Nepal Oil Corporation (NOC) – in less than two months from the earlier Rs 2 billion – to clear its dues of its sole petroleum products supplier Indian Oil Corporation (IOC), the government's spokesperson said after the cabinet meeting.

Employess Provident Fund (EPF) and Citizen Investment Trust (CIT) will provide Rs 1 billion each to the debt ridden state entity.

The NOC will have a total of Rs 32 million, including Rs 12.64 billion of government, Rs 10 billion of EPF and Rs 6 billion of CIT.
According to the NOC, it is in loss in diesel and cooking gas, though it is making profit in petrol, kerosene, aviation fuel (domestic) and aviation fuel (international). NOC is expected to post a loss of Rs 1.04 billion in November according to the latest price list. And the red tape and mismanagement has not only hurt the state oil monopoly but also the economy as the demand of fuel is also increasing due to regular power outage and the Constituent Assembly (CA) election scheduled for November 19.

The election has forced the NOC to double its stock of petroleum products as the consumption will increase and ensuring smooth fuel supply will be difficult.

The state oil monopoly is planning to stock an additional 14,000 kiloliters (kl) for the election.

NOC has a storage capacity of 71,558 kl – across the country – that can fulfill the demand for less than 15 days.

The state oil monopoly has estimated that around 700 kl of petrol and 1,500 kl of diesel is consumed daily across the country. Kathmandu Valley alone consumes 350 kl petrol and 450 kl diesel everyday.

Nepal Economic Summit 2014 on February 24

As a recent IFC report has hailed Nepal's improving business climate, the private sector is planning an economic summit in four months to attract foreign as well as domestic investment.

Federation of Nepalese Chamber of Commerce and Industry and Samriddhi Foundation are going to organise Nepal Economic Summit 2014 on February 24, with a theme 'Destination Nepal for investment'.

The three-day long summit scheduled to be held in Kathmandu will help create a platform for business leaders, experts, high level political leaders and international delegates to search for a common ground to help make Nepal the best destination for local as well as foreign investors, according to FNCCI president Suraj Vaidya.

The new government after the CA election needs to know what economic reforms the country needs, he said, adding that it also has to take every possible measures to attract more and more investment to the country. "The summit will help all stakeholders including government, economists, businessmen and investors explore measures to make the country an attractive investment destination.

The seminar will also focus on ways to explore investment potentials in tourism, agriculture and alternative energy. "Nepal has tremendous investment potentials despite bureaucratic hurdles and lack of investment-friendly environment," Vaidya said hoping to find ways to tackle the hurdles.

The IFC report has claimed that Nepal is the third easiest country in the South Asia to do business after Sri Lanka and Maldives.

City gets third Barista Lavazza outlet

Premium Beverage & Food Company has opened third outlet of Barista Lavazza in the Kathmandu Valley.

Miss Nepal 2013 Ishani Shrestha inaugurated the third outlet at Jawalakhel of Lalitpur.

Premium Beverage & Food Company – previous Barista Nepal Pvt Ltd – has has already opened two outlets of the largest chain of coffee cafes of India Barista Lavazza in the Kathmandu Valley, one each at Lazimpat and Tribhuwan International Airport departure launge, said managing director of the company Shyam Sundar Lal Kakshapati.

"The growing demand of the coffee connosieurs have forced us to open the third outlet," he added.

Parties accord high priority to energy

The major political parties today vowed to prioritise developing energy to meet the increasing demand.

 Addressing an interaction organised by Independent Power Producers' Association-Nepal (IPPAN) here today, former ministers underlined the need to forge national consensus to develop the hydropower in the country.

"Nepali Congress aims at ending the current power outage in the country within the next three years," said former water resources minister and Nepali Congress (NC) central member Laxman Ghimire. The party also aims at utilising immense potentiality of water resources to generate power also for export purpose.

"CPN-UML emphasises on developing small hydropower projects for domestic consumption while mega projects for export purposes," said
former water resources minister and CPN-UML leader Pradeep Nepal, on the occasion. His party CPN-UML had obstructed the construction of Arun III that the World Bank was planning to develop. But after almost a decade Arun III has been resurrected and Sutlej Jal Vidyut Nigam – an Indian state-owned hydropower company – is going to develop it.

The country can be economically prosperous, if the abundant water resources can be utilised through political consensus, he added.

Likewise, a leader of Terai Madhes Democratic Party Ratneshwor Kayastha, on the occasion, underlined the need to develop storage-based hydropower projects to meet the energy demand.

Energy has become one of the important agenda in the election campaign for the political parties as the country is still reeling under eight hours of scheduled power outage hitting not only the industrialisation of the country but also making the country depended on imported fossil fuel.

Investors hail reforms in FDI approval process, complain of red-tape, sluggish service delivery

Investors today suggested the government to take immigration, labour and industry issues seriously for smooth service delivery that will ensure more foreign investment.

During  an interaction with foreign investors organised by Department of Industry and International Finance Corporation (IFC) here today, they also sought one-window facility for the company registration and tax services, apart from relaxation of visa regime for the foreign investors.

However, director general at the Department of Labour Krishna Hari Pushkar asked the foreign investors to follow law of the land and donot depend on  middlemen to get visa.

He also committed that the investors will be issued non-tourist visa within a week, if they apply with all required documents directly. "But the investors, who are working in Nepal as full-time employees must get non-tourist visa,” he said, adding that more than 50,000 foreigners are working illegally in Nepal. "They come to Nepal on tourist visa and work here without seeking work permit illegally."

According to the law of the land, foreign investors can come to Nepal on tourist visa and they can apply for a non-tourist visa after getting FDI approval from the Department of Industry.
Currently, the process of granting non-tourist visas to foreign employees has been reduced to two weeks – unlike earlier when it used to take almost six months – and only requires the involvement of four government agencies.

Similarly, the government also provides business visa of five years to investors and foreign employees on different categories based on their size of investment, income tax paid, employment generation in different categories including national priority projects.

Foreign investors including the representatives of Himal Power, Ncell, ZTE Corporation and Unilever Nepal though on the occasion hailed the reforms in FDI approval process, they complained of sluggish service delivery and red tape.
The Department of Industry has – under the reform programme – has recently streamlined the FDI approval process from 21 steps to 15 shortening the time period to 10 days from earlier around a month, director at Foreign Investment Section of the Department of Industry Bipin Rajbhandari informed.
Likewise, the investors also sought transparent and time-bound service delivery, work permit and repatriation of earnings.
“There is not much restriction on repatriation of earnings provided the companies present the required documents like clearance of annual general meeting and audited financial statements,” said director at Nepal Rastra Bank’s Foreign Exchange Management Department Bishnu Raj Dhungana.

Investors should bring investment through banking channels, he said, adding that it will make easier for repatriation in the future as they will get investment certificate from the commercial banks at the time of bringing investment.

Industry secretary Krishna Gyawali, on the occasion, said the government is introducing Integrated Industrial Information Management System by the end of this fiscal year to discourage middlemen and facilitate the foreign investors.

Though FDI commitments have been increasing in recent years, actual investment is far lower compared to the commitments. In the last fiscal year 2012-13, the government had received FDI commitments worth Rs 19.93 billion for 317 projects, according to the central bank statistics.