Saturday, August 31, 2013

Nigerian company with a proposal of $800m cement factory might be the first to get Investment Board’s approval

A Nigerian Dangote Group’s cement factory might become the first project to get approval from Investment Board of Nepal since its establishment some two-and-a-half years ago.
The Board is going through the investment proposal of Dangote Group, said the Board chief executive Radhesh Pant.
The Nigerian business conglomerates had approached the Board with an investment proposal of $800 million cement factory some eight months ago, he said, adding that the Board has completed preliminary study of the proposal. “Most probably, the Board will soon give a green signal to the group to start its cement project.”
The Board meeting on February 13 had accepted the company’s foreign direct investment (FDI) proposal.
The Board had also formed a committee led by Pant, including director general of the Department of Industry Dhurba Lal Rajbansi and director general of the Department of Mines and Geology Sarabjeet Prasad Mahato.
The committee submitted its report a month ago and the next Board meeting will give final approval.
Likewise, the chairman of the Investment Board and chairman of Interim Election Council Khil Raj Regmi has also approved the proposal a week ago.
The foreign investor is also in its process to get a licence for limestone – a key raw material for cement – mine. The group is planning to set up cement factory in Surkhet in western Nepal.
Headquartered in Lagos of Nigeria, the group’s Dangote Cement is the largest cement producer in Africa and Dangote Cement operates in 14 African country.
With a net worth of $12 billion, Dangote Group president and chief executive Aliko Dangote is the richest person in Nigeria and 76th richest person in the Forbes magazine’s billionaire list.

West Seti completion to be delayed by two more years

The Investment Board said that the 750-MW West Seti Hydropower Project will be delayed by two more years to 2021 as the developer has demanded changes in rehabilitation and resettlement modality of the project.
The CWE Investment – a subsidiary of power developer China Three Gorges Corporation (CTGC) – that is developing the project has recently asked the government to help land acquisition and resettlement,” said Investment Board chief executive Radhes Pant, during an interaction organised by GP Koirala Foundation here today. “Though, it had agreed to carry out land acquisition and resettlement, itself,” he said, adding that the government will have to change the law to address the request of the Chinese investor. “It will take some more time as the domestic law do not allow such changes.”
The law of the land needs to be changed, if the government takes over the responsibility of acquiring land and managing resettlement, Pant added.
The existing Land Acquisition Act 1894 reads that the government shall provide the land, if it is under its ownership, while the private developer has to acquire the land on its own for any project development.
The CWE has demanded one-and-a-half years to complete the project from earlier schedule of 2019 due to difficulties in land acquition and resettlement.
However, energy secretary Bishwo Prakash Pandit, on the occasion, said that the government is ready to help the developer in land acquisition and resettlement. “But the investor will have to bear the cost,” he added.
Likewsie, energy minister Umakant Jha, stressed on early completion of the project to end the current power crisis. “The government will make revise the law, if necessary, for the project implementation,” he added.
According to the memorandum between Ministry of Energy and the Chinese company CWE Investment on March 1, 2012, the project was planned to start from July 2014 and completed by 2019.
Likewise, the revised memorandum signed between the IBN and CWE on August 27, 2012 also accepted the time frame and given Chinese company an additional six months compensation time to make up for the time lost due to the investigation of parliamentary committee for natural resources.
According to the agreement between the Board and CWE Investment, the 10 per cent equity will be offered to the locals, apart from 150 MW of electricity to in the far West and multipurpose benefits. The agreement has also explored new possibilities of developing an industrial hub in the Far West with assistance from CTGC.
The Board will hold a meeting with the Chinese investors soon, Pant said, adding that they will discuss problems in land acquisition and resettlement, optimitisation of the project – making it a multipurpose one – and to hold studies on seismic condition of the project site.
Earlier, an Australian company Snowy Mountains Energy Corporation (SMEC) had conducted study but a separate seismological studies need to be done to ensure safety of the project area.
The Board and CWE Investment – that has invited the Board to come to China for discussion – has not yet signed a power development agreement (PDA), though the CWE had completed technical evaluation of the project on March 8 and financial evaluation on July 30.
However, Chinese ambassador to Nepal Wu Chuntai, on the occasion, claimed that the West Seti project is a milestone for Nepal-China relationship and Chinese government and the CWE were fully committed to realise it.
China has agreed to provide $1.6 billion loan for the project development.

Friday, August 30, 2013

Government preparing a new list of products for GSP facility

The government is preparing a new list of domestic products that it seeks for a duty-free facility in the US market.
The government has formed a team led by executive director of Trade and Export Promotion Center (TEPC) Iswori Ghimire – including private sector representatives – to suggest the list of products to be included in Generalised System of Preferences (GSP).
The US has requested Nepal to sent a new list of products to be added in the current list of GSP by October 4.
Though, the legal authorisation of GSP programme expired on July 31, the US Congress is considering a legislation that would extend the authorisation of GSP that is a programme designed to promote economic growth in the 127 countries of developing world by providing preferential duty-free entry for up to 5,000 products.
Manufactured items like different types of chemicals, minerals and building stone, jewelry, carpets and some agricultural and fishery products are some of the products eligible for duty-free treatment under GSP facility, whereas some textiles and apparel products, watches, footwear, handbags and luggage products are not eligible for duty-free treatment under GSP.
As the Readymade Garments (RMGs) exports to the US market witnessed a plunge after the US ended the Duty Free-Quota-Free facility in 2005, Nepal has been repeatedly asking the US government to provide GSP facility for 11 Readymade Garments (RMGs) and pashmina products.
Since the US has been imposing an average of 17 per cent customs duty on Nepali RMGs and pashmina products, it has made Nepali products less competitiveness –  compared to the products from other countries that are enjoying GSP facility – in the US market.
Likewise, Nepali hand-knitted carpet is getting limited access to the US market due to comparatively liberal customs duty compared to that for RMG and pashmina products.
However, Nepal is still in comfortable position in bilateral trade with the US as the export still surpasses imports, unlike with other countries. But the US is fast bridging its trade deficit with Nepal.
The data of Trade and Export Promotion Centre (TEPC) revealed that in the year 2012, Nepal exported Rs 5.13 billion and imported Rs 4.75 billion worth merchandise from the US. Likewise, a year ago, in 2011, the export stood at Rs 5.24 billion and import at Rs 4.58 billion.

TIFA bilateral forum talks on cards
KATHMANDU: The Ministry of  Commerce and Supplies is preparing to host Nepal-US bilateral trade talks under Trade and Investment Framework Agreement (TIFA) that has been repeatedly postponed since last three years. The bilateral agreement has envisages Nepal and the US Council on Trade and Investment – a commerce secretary level permanent mechanism – meeting once a year. Nepal and the US signed the bilateral agreement in Washington on April 16, 2010, setting up a bilateral forum for trade dialogue but could not meet even once since then.

Private sector urges CPN-UML to adopt minimum economic agenda, focus on employment generation, economic prosperity

The private sector is on a mission to convince major political parties in minimum economic agendas at least for the next five years until the country gets a new Constituent through the second Constituent Assembly (CA) election slated for November 19.
After Nepal Congress, Federation of Nepalese Chambers of Commerce and Industry (FNCCI) team today met with the CPN-UML leaders and urged them to include the common economic agendas – giving emphasis on employment generation and economic prosperity – in their election manifesto.
The CPN-UML has invited the private sector representatives to its headquarters to discuss on the economic agenda that could be included in the party’s manifesto.
“More than 415,818 youth left the country for foreign employment in the last fiscal year alone,” the umbrella organisation of the private sector said, adding that the migration has fuelled scarcity of potential and trained manpower for industries, also hurting the agriculture output.
The FNCCI has also suggested short- and long-term strategies for the economic development with focus on arresting rising rate of unemployment, trade deficit, energy crisis, unequal development, weak infrastructure and corruption.
The private sector has urged the CPN-UML to focus specially on energy generation as it is a engine of economic growth. It has asked the liberal communist party – that has been in power many a times in past too – to help complete various hydropower projects in different regions for equal and justifiable development of the country. The FNCCI has asked to help complete 900-MW Upper Karnali Hydro Project in the Mid-western region; 750-MW West Seti Hydro Project in the Far-west; 600-MW Budhi Gandaki and 900-MW Upper Tamakoshi in the central region; 600-MW Upper Marsyangi Hydro project; Lower 400-MW Tarun and 415-MW Upper Tamor Hydro projects in the Eastern region on time.
Earlier, the CPN-UML was opposed to the market economy and foreign investment on hydropower development that has pushed the country two decades back with chronic power shortage in the country.
The private sector representatives also urged the party to prioritise at least two storage projects –including Budhigandaki Hydroppower – in the next five years as the run-of-the river projects only cannot help reduce power outage.
“Instead of promising of generating 10,000 MW of electricity, the party should have clear agenda on infrastructure development like big storage projects for energy generation that will give a boost to the economy,” FNCCI president Suraj Vaidya said, during the meeting.
“The CPN-UML seemed serious on economic development and creating investment-friendly environment,” he said, adding that the party is also prepared for the CA election on scheduled date of November 19, which is a great relief for the private sector. “The election will give some momentum to the economy.”
“The party is also positive on a fixed date for the budget presentation as in the past six years the budget came only twice on time due to frequent changes in the governments, which has hit not only the private sector but also the economy hard,” Vaidya added.
The party has realised that it is the time for economic revolution unlike in the past, when it was focused on political revolution, said the CPN-UML chairman Jhala Nath Khanal after receiving the 16-page recommendations from the private sector.
“It is high time we concentrate on economic development and industrialisation,” he said, adding that commercialisation of agriculture sector by mobilising domestic and foreign investment and tourism promotion through key infrastructure projects like the Mid-hills Highway are on cards.
The party has taken the private sector’s concerns seriously, said CPN-UML Standing Committee member Bharat Mohan Adhikari, who was finance minister during the late Man Mohan Adhikari and Madhav Nepal governments.
“The party will incorporate their recommendations in the election manifesto, he added.
The private sector has been lobbying to include minimum economic agendas in the political parties election manifesto and implement it, as in the past there was confusion on the economic agenda among the political parties due to frequent changes in the governments from liberal democrats Nepali Congress – that has been avid supporter of liberal market economy – to the hardliner communists UCPN-Maoist – that was opposed to liberal market economy, economic freedom and foreign investment in the hydropower. The frequent policy changes has discouraged the potential domestic and foreign investors.
But the UCPN-Maoist has also been slowly reforming itself and accepting that they can reach their goal of socialism only through the capitalism, though it has become too late to develop the country.
After they realised that they lost chances to develop country and pushed it to almost two decades back due to their opposition to the foreign investment on hydropower development and liberal market economy, CPN-UML and UCPN-Maoist –along with other five major political parties – have also agreed and committed to the hydropower development without hindrance on any hydropower projects.
On April 11, during the FNCCI annual general meeting, the top leaders of the seven political parties have committed to the hydropower development, though the country has already lost many opportunities and chances to economic development.
“Though, the political parties have committed private sector promotion and focus on economic agendas in the past, politics have always pushed the economic agendas to the back seat,” Vaidya said, adding that this time the private sector wants them to walk the talk.
The Nepal Inc also plans to hold similar meetings with all the major political parties to ask them to include economic agenda in their CA election manifestos.

SAARC finance ministers agree to strengthen regional economic integration

The sixth SAARC Finance Ministerial Meeting today concluded in Colombo promising to strengthen economic integration of SAARC towards South Asian Economic Union, also through early implementation of regional trade agreement.
They have decided to remove existing tariff and non-tariff barriers (NTB) for the early implementation of South Asian Free Trade Area (SAFTA) and enhance mutual cooperation in key sectors like tourism and agriculture, apart from SAARC Development Fund (SDF) – that aims to alleviate poverty – and discussed on SAARC Investment Fund, apart from SAARC Promotion and Protection of Investment, grater flow of capital and intra regional long term investment, SAARC Agreement on Avoidance of Double Taxation, and SAARC Customs Cooperation,  as approved in the fifth SAARC Finance Ministers meeting held in Bangladesh capital Dhaka last year.
The South Asian finance ministers also decided to improve the existing mechanisms, through review, rationalisation and reinvigoration, and make SAARC better known and understood by International Institutions and Governments around the world.
They have also resolved that the SAARC – the home to some 1.2 billion people – must speak unitedly to the world. South Asia represents about 20 per cent of the world population, which has great potential to enhance and promote relations among the member states, and lobby for the regional benefit.
The finance ministers also committed unitedly in protecting the region from adverse effects of global financial crisis and strong US dollar that has made the regional currencies weaker, apart from fighting against energy crisis and rising petroleum prices.
Addressing his South Asian counterparts on the occasion, finance minister Shanker Prasad Koirala stressed the need to launch people-centric economic activities for the benefit of the region.
 “We can reap the benefits of regional cooperation through active participation of private sector in the exchange of trade, commerce and financial cooperation,” he said, underscoring the necessity to carry forward the concept of SAARC Energy Ring and the regional energy trade as the region is energy starved despite the huge potential for energy development. “Apart from energy, better connectivity will also enhance regional integration,” he added.
The seventh meeting of SAARC Finance Ministers and Finance Secretaries will be held in Nepal in 2014.