Developers submit DPR of four major projects to investment board

 The developers of four major infrastructure projects today submitted detailed feasibility study report (DFSR) and detailed project report (DPR) of their projects to Investment Board Nepal (IBN) today.

A developer Flash Freight Logistics and International Cargo Pvt Ltd has submitted the DFSR for the Private Freight Terminal and Bulk Handling Facilities Project to be constructed in Birgunj and Bhairahawa. A memorandum of understanding (MoU) was signed between the developer and the board on November 29 last year, according to the board.

Likewise, CG Logistics Pvt Ltd and Sharaf Group – the developers of the Multi-model Logistics Park Project to be constructed in Biratnagar – have also submitted its DFSR to the board. The MoU was signed between the board and the developers on June 17 last year.

Developer of the Damak Clean Industrial Park China-Nepal Industrial Park has also submitted the DPR for the project to board. The 39th meeting of the board held on July 2 last year had approved an investment of $586.1 million for the construction of the project, the board confirmed. “The project is being constructed in Damak of Jhapa with the joint investment of Lhasa Economic and Technology Development Zone Jing Ping Joint Creation Construction Project Development Corporation Co Ltd and Damak Clean Industrial Park.”

Likewise, Muktinath Darshan Pvt Ltd has submitted the DPR of 80.16-km-long Birethanti-Muktinath cable car to the board on November 29. The proposed cable car – from Birethanti along Ghodepani, Tatopani, Lete, Kowang, Tukuche, Marfa, Jomsom to Muktinath – has been

The chief executive officer (CEO) of the board Sushil Bhatta – receiving the DPRs and DFSR, said that these projects will soon enter next phase of development.

Meanwhile, the board has also held discussions with Nepal Electricity Authority (NEA) and officials of Hongsi Shivam Cement to solve the problems in the construction of the power transmission line required for the project.

During the discussion, acting managing director of NEA Hitendra Dev Shakya expressed his commitment to arrange power supply by constructing transmission line for project within May. 

Likewise, CEO of the board Bhatta said that the big projects like this can make a significant contribution to the overall economic development of the country, including employment generation. “The board is making all possible efforts for the necessary facilitation in the implementation of such projects,” he added.

Policy harmonisation needed to curb flow of dirty money

Greater policy harmonisation among government agencies has been urged to curb the flow of dirty money.
As some world leaders have resigned and others are under pressure to resign over the Panama Papers leak concerning international illicit money flows, government agencies in Nepal have also started debating policy harmonisation. "Nepal Investment Board approves mega foreign investments but it now has to be extra careful to investigate backgrounds before approving foreign investments," according to a high source at the Department of Money Laundering Investigation (DMLI).
Likewise, apart from cross checking foreign investments, banks and financial institutions also have to check the backgrounds before handling any transactions or opening accounts for foreign or domestic investors, the source said, adding that Article 6 of the Anti-Money Laundering Act has restricted the opening of accounts for shell companies – offshore bogus companies – and carrying out any transactions with them. "If found out, the banks and financial institutions will be punished under the Act."
Though banks and financial institutions already have to report transactions of over Rs 1 million or suspicious transactions to the Financial Information Unit (FIU) under the central bank, the Panama Papers leak has again raised a serious question over the possibility of such institutions becoming involved 'unknowingly'.
Banks and financial institutions have to be extra careful now, the source said.
Likewise, the government has also to seriously take stock of registered companies to curb the flow of dirty money, the official suggested. "Though Nepal has committed itself to curb the flow of dirty money – earnings through corruption, tax evasion and black marketing – the government itself is promoting black marketing and institutional corruption, and this could damage the economy in the long run."
Meanwhile, the DMLI today called on stakeholders including the revenue administration, the central bank's Financial Information Unit (FIU) and the police, to discuss the possibility of dirty money flowing into the country from offshore shell firms, and also the possible Nepali names in the Panama Papers leak.
Along with the DMLI, the FIU and the Department of Revenue Investigation (DRI) are the key government agencies that deal with issues of money laundering, terrorism financing and foreign exchange misappropriation.
According to DMLI chief Damodar Regmi, the meeting discussed the seven Nepalis fingered by the Panama Papers leak. "We are seriously discussing financial connections, transactions and the possibility of tax evasions," he said, adding that the department has also restarted the profiling of suspicious names that could be in the Panama Papers although the leak has not identified any of the names. "It has, however, claimed that the names will be published in May," Regmi added.
Last year also, the central bank, the DRI and DMLI had tried to investigate names that had figured in rumours following revelations of illegal outflow of money to a Swiss Bank.
Such investigations are very tricky, Regmi said, adding that without any authentic information it's impossible to track the flow of dirty money and the activities of bogus companies. "However, we have restarted the process of profiling names and restarting investigations," he added.
As Nepal has been seeing a steady rise in FDI commitments from the countries identified by the ICIJ as tax havens, the DMLI has said that it will now step up surveillance for FDI coming from these tax havens. There is a need of in-depth investigation, given the huge foreign direct investment (FDI) entering Nepal from tax havens in recent years, Regmi said, adding that statistics from the Department of Industry (DoI) reveals that of the total FDI commitments till last fiscal, about 20 per cent were from tax havens.
The rise in money entering Nepal from tax havens has raised question that it could be illegal money stashed abroad by Nepalis, though the government departments have no proper records of such money.
Apart from enhancing the supervisory capacity to monitor FDI commitments, the government agencies like the DoI and the Office of Company Registrar (OCR) should work together to fight the flow of dirty money.
Regmi said that now onwards the DMLI will adopt 'risk-based supervision system', instead of launching investigating after the incident of money laundering surfaces. But, the DMLI has any success success so far in investigating money laundering cases. The department has not filed any any case against money launderers at the Special Court in the current fiscal year, neither had it filed any case in the last fiscal year too.
Since its establishment some five years ago, the department had filed only 30 money laundering cases at the Special Court. The DMLI was established in 2011 after a huge international pressure on the government. The government had committed the Financial Action Task Force (FATF) – a global anti-money laundering body – that it would approve the anti money laundering act in line with global fight against the fight to dirty money flow.
The department has to be strengthened to get result against the cases of money laundering.
Currently, the department has been probing 700 cases and 200 of them are in 'advanced stage', according to Regmi.

Investment Board to approve Rs 25 billion cement factory

Investment Board of Nepal is going to approve Rs 25 billion cement factory.
The board meeting after the Tihar festival is going to approve India's Reliance Industries' Rs 25 billion cement factory for foreign direct investment, informed external affairs head of the board Ghanashyam Ojha.
The board – chaired by the Prime Minister Sushil Koirala – has received the proposal from the Reliance Industries that is owned by India's Ambani group, he said, adding that the company is planning to set up the cement factory in either the central region or the eastern region of the country. "The Department of Mines and Geology has already given its permission to the factory in mid-July."
The approval got delayed due to the board's busy schedule with the project development agreement (PDA) on Upper Karnali Hydropower Project with another Indian firm GMR.
After the board's approval – post Tihar festival that ends on October 25 – Reliance will conduct environmental impact assessment (EIA). The company will then submit the EIA report to the board, through Ministry of Environment.
After the clearance of the EIA from the board, Reliance will start the work to set up the factory, Ojha added.
Reliance has, however, demanded that the government provide 60 MW of uninterrupted supply of electricity to the factory, he said, adding that the company has demanded that it should be provided subsidy in the import of coal or other fuel for generating electricity, in case the government is unable to provide uninterrupted supply of electricity.
More cement companies both domestic and foreign investment are coming up lately as the demand for cement has increased due to construction of big infrastructure projects including hydropower projects lately.
The government – to encourage the cement industries – promised to provide access road and electricity to new cement factories. According to Trade and Exports Promotion Center (TEPC), import of cement has gone down by 19.2 per cent to Rs 3.18 billion in the fiscal year 2013-14 compared to a fiscal year ago in 2012-13, when the country saw Rs 3.94 billion worth cement import. But the country has seen rise in import of clinker as most of the domestic cement factories are dependent on imported raw material for cement that is clinker. Only few of the cement factories rely on domestic mines and majority of them have been importing clinkers.
According to central bank, in the fiscal year 2013-14, the country imported Rs 9.71 billion worth cement and clinkers that is some three per cent higher than that of a fiscal year ago in 2012-13, when the country imported Rs 9.42 billion worth cement and clinkers.

Nepal holds investment opportunities discussion in Tokyo

Nepali Embassy in Tokyo organised a one-day seminar on Investment Opportunities in Nepal today.

The economic cooperation can bring people of both the countries more closer, said Nepali ambassador to Japan Madan Kumar Bhattarai, addressing the interaction.

Nepal has embarked on a new phase of political development, he said, adding that the successful CA election last November and the formation of a new elected government have raised hopes for a stable government. "The new government gives priority to the economic development."

The government is also keen to facilitate foreign investment creating business-friendly environment, the envoy added.

Highlighting the government's policy and programmes, on the occasion, Nepal Investment Board chief executive Radhesh Pant explained that the government had studied the competitive advantageous areas for growth.

Assuring full support from the board, he also called on the Japanese business community to invest in the areas that have competitive advantages.

Japanese ambassador to Nepal Masashi Ogawa, senior officials from the Foreign Ministry of Japan, Japanese businessmen and representatives of the corporate sector took active part in the interaction.

Dangote cement seeks help to acquire land, electricity

Dangote Cement has sought government help to acquire land for its $800 million cement industry in Nepal.

In a meeting with finance minister Shankar Prasad Koirala, here at his office today, the Nigerian company's chief executive K R Rao said that the company is looking for the land in Dang, Dhading and Makwanpur districts to establish the cement factory.

Dangote Cement needs 60 megawatt (MW) of electricity for full capacity operation of the plant, he said, asking government's help in providing 30 MW of electricity from the national grid as the company is planning to install Thermal Plant of 30 MW capacity to operate cement industry.

Of the three proposed districts to establish cement industry, Dhading has no bridge to access the industry, Rao added.

Koirala, who is also trade, commerce and supplies minister, said the government has prioritised foreign investment and ready to help promote them. "There will be no scarcity of energy, when the industry will come into operation," the minister added.

The government has also focused on developing infrastructure for the cement industries, he said, asking the Nigerian company to look for more investment potential in Nepal.

The Nigerian company – Dangote Group – had applied to the Investment Board with a $800 million cement factory proposal in Nepal. The board had on February 13 accepted the company’s foreign direct investment (FDI) proposal. The Cabinet had also endorsed the Dangote Group – one of Nigeria’s most diversified business conglomerates – proposal.

Dangote Group president and chief executive Aliko Dangote has been ranked as the world’s 76th richest person – with a networth of $12billion – by the Forbes magazine. Headquartered in Lagos of Nigeria, the group’s Dangote Cement is the largest cement producer in Africa.

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 76^th richest person in the Forbes magazine’s billionaire list.

Nepal-Canada collaboration on cards

Nepal and Canada are planning to join hands in exploiting the vast potential that Nepal offers.
"There is great potential to collaborate in key sectors for our mutual benefit," said Canadian ambassador to Nepal Stewart Beck, who is leading a business mission to Nepal.
The delegation comprising representatives of Canadian companies held discussion with the Federation of Nepalese Chambers of Commerce and Industry (FNCCI) here in the valley today on new business partnerships between the private sectors of both the countries.
"Lets capitalise the tremendous opportunity of hydropower," he said, adding that Canada is the world's second largest hydropower generator that exports the power to the US.
Beck also highlighted the regional approach on economic development. "Kathmandu is nearer to Delhi compared to Dubai," he said, asking the Canadian businessperson with their expertise to explore Nepal.
This is the right time to explore Nepal, said FNCCI president Suraj Vaidya. Asking the guests not to be discouraged by the political transition, he invited the delegation to start looking at the business potential seriously as the investors, who invests now will get the advantage.
On the occasion, Investment Board chief executive Radhesh Pant presented some of the potential investment sectors. "The country offers a huge potential in commercialisation of agriculture, tourism, hydropower, infrastructure and mining," he said, adding that the board will help the potential investors as a one window shop to facilitate them. "Nepal with its young and educated population is trying to create enhanced investment-friendly environment.”
The representatives of Bombardier, Arcop Associates, Manitoba Hydro, IRD, Lea Associates, Ballard Power / Premiertech presented potential joint collaboration sectors during the interaction.
The delegation — that also discussed on infrastructure, including urban planning, roads, and transport, hydropower, and water and waste water sectors — also formed a Canada-Nepal Business Executive Chamber including representatives from Indo-Canadian Business Chamber (ICBC) and FNCCI to work jointly on key sectors. The chamber has Gyanendra Lal Pradhan (Hydro Solutions), Om Rajbhandari (Comfort Housing), Chandra Prasad Dhakal (Global IME Group) and Mrs Ritu Singh Vaidya (Vaidya’s Organisation of Industries and Trading House) representating Nepal and Pramod Radhakrishna (Indo Canadian Business Chamber -ICBC), Dr MP Raju (Lea Associates), and Alisa Kreynes, Manitoba (Hydro International) representing Canadian businessperson.
Likewise, chief operating officer of ICBC Nadira Hamid and FNCCI director general Dr Hemant Dawadi signed the Memorandum of Understanding to increase bilateral and multilateral engagements, on behalf of their respective institutions.
The 13-member delegation during their four-day visit will hold discussions with government officials and private sector leaders.

According to the figures, Nepal has exported Rs 780 million worth to Canada, whereas imported Rs 900 million worth merchandise in the last fiscal year. Some 25 Canadian investment projects worth Rs 2.16 billion has received approval — in the last fiscal year — which are expected to generate 2,000 employment, according to the of Department of Industry’s data.

Investment Board open to PPP model

Public private partnership (PPP) may not be suitable for all projects, but the Investment Board has no bias against the model as long as the private sector delivers, according to experts.
"The PPP model may not be suitable for all projects but the Investment Board will not have any bias towards it as long as there is a clear case that the private sector can deliver the service more cost effectively," said senior advisor at the board Sanjay Poudyal during an interaction, here today.
More than 25 countries have established PPP agencies and enacted PPP specific legislations, he said, adding that private participation in infrastructure has had many labels over time and the nomenclature differs by language and geography. "But PPP is an arrangement between government and the private sector, where each side contributes its inherent strengths and advantages to deliver public services and infrastructure more quickly and cost effectively."
The government is accountable for essential services to the public, regulation and policy oversight and the private sector designs, constructs, operates and maintains public infrastructure on behalf of the government, he added.
The board also updated the progress of its projects highlighting the importance of Public Private Partnership in Nepal. It has received a good response on call for proposals for Nepal Investment Year 2013 and is in the process of developing dossiers for each project, said chief executive of the board Radhesh Pant, on the occasion.
"Project Negotiation Agreement was signed with SN Power for Tamakoshi-3 Project last week," he informed, adding that a Project Negotiation Agreement is a contractual arrangement that provides the developer security and tenure over project while the government guarantees that it will not negotiate with a third party about the project for the term of the agreement, while the parties negotiate a Project Development Agreement. "IBN Project Development Agreement Negotiation team has now been finalised along with necessary technical, legal and commercial advisors."
Project Development Agreement template is in the process of being tailored to individual projects and negotiations with developers of four export-oriented hydropower producers started on April 15, according to him. "The board has received application from Dangote Cement PLC expressing their interest in establishing a cement company in Nepal."
The Investment Board was set up in November 2011 as a one-window solution for foreign investors and developers investing in hydro projects above 500MW and other infrastructure projects above Rs 10 billion to fast track projects and cut through bureaucratic obstacles and delays.