The government is going to review the fee for factories within Garment Processing Zone (GPZ) in Simara as the manufacturers’ showed no interest to invest in the protected zone citing high rental charges.
The SEZ Authority has fixed the rental fee of Rs 20 per square feet per month for investors to establish factories within Simara GPZ. Since the investors seemed not interested in the current rate, the Ministry of Industry, Commerce and Supply (MoICS) has formed a rental fee fixation committee to revise rental rate inside the Simara GPZ.
According to joint secretary at the ministry Chandika Bhatta, who is also the former executive director of Special Economic Zone (SEZ) Authority, the government is going to reduce the rental fee as garment manufacturers have refused to invest – at the current rate – in Simara GPZ.
The SEZ Authority – six months ago in May – had asked for applications from interested garment manufacturers to invest within the GPZ. But not a single investor applied forcing the government to revisit the rate. The garment manufacturers, however, asked the government to reduce the rental fee at Simara GPZ to Rs 5 per square feet per month.
“The committee will soon determine a new rental fee rate to encourage garment manufacturers to invest in the Simara GPZ,” he said, adding that the investors did not express interest to invest within the GPZ, even after repeated notices stating the zone is open due to rental fee. “As the GPZ in Simara was developed to promote production and exports of garments, the government will give ear to the investors and encourage them to invest in the GPZ.”
Once the rental fee is competitive, garment manufacturers are expected to invest in the Simara GPZ, according to the Garment Association of Nepal (GAN).
The government – since long – is planning to start GPZ and SEZ – to promote export – offering the investors basic infrastructure, including internal road, electricity and water supply, sewage system, weighing bridge, waste water treatment plant, petrol pump, banks and insurance service.
After the US government extended zero tariff preference for 66 products – including apparels – into its market through the ‘Trade Facilitation and Trade Enforcement Act’ in February 2016, the government came up with the concept of GPZ expecting to bring down the production and export cost as Nepali garments are relatively higher compared to South Asian countries.
But the services and facilities, apart from rental fee in the GPZ has created dilemma.
Likewise, the establishment of SEZ in Bhairahawa has already taken more than 18 years but it has not yet been operational hindering the government move to boost the export.
The SEZ Authority has fixed the rental fee of Rs 20 per square feet per month for investors to establish factories within Simara GPZ. Since the investors seemed not interested in the current rate, the Ministry of Industry, Commerce and Supply (MoICS) has formed a rental fee fixation committee to revise rental rate inside the Simara GPZ.
According to joint secretary at the ministry Chandika Bhatta, who is also the former executive director of Special Economic Zone (SEZ) Authority, the government is going to reduce the rental fee as garment manufacturers have refused to invest – at the current rate – in Simara GPZ.
The SEZ Authority – six months ago in May – had asked for applications from interested garment manufacturers to invest within the GPZ. But not a single investor applied forcing the government to revisit the rate. The garment manufacturers, however, asked the government to reduce the rental fee at Simara GPZ to Rs 5 per square feet per month.
“The committee will soon determine a new rental fee rate to encourage garment manufacturers to invest in the Simara GPZ,” he said, adding that the investors did not express interest to invest within the GPZ, even after repeated notices stating the zone is open due to rental fee. “As the GPZ in Simara was developed to promote production and exports of garments, the government will give ear to the investors and encourage them to invest in the GPZ.”
Once the rental fee is competitive, garment manufacturers are expected to invest in the Simara GPZ, according to the Garment Association of Nepal (GAN).
The government – since long – is planning to start GPZ and SEZ – to promote export – offering the investors basic infrastructure, including internal road, electricity and water supply, sewage system, weighing bridge, waste water treatment plant, petrol pump, banks and insurance service.
After the US government extended zero tariff preference for 66 products – including apparels – into its market through the ‘Trade Facilitation and Trade Enforcement Act’ in February 2016, the government came up with the concept of GPZ expecting to bring down the production and export cost as Nepali garments are relatively higher compared to South Asian countries.
But the services and facilities, apart from rental fee in the GPZ has created dilemma.
Likewise, the establishment of SEZ in Bhairahawa has already taken more than 18 years but it has not yet been operational hindering the government move to boost the export.
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