Kathmandu hosting WFTU conference

Kathmandu is hosting World Federation of Trade Union (WFTU) Asia Pacific conference today and tomorrow with a slogan of ‘Ensure basic needs of working class and social security, generate more investment on productive and employment sector’.
Some 12 countries, 25 National Trade Unions, 49 International delegates and 8 Trade Union Confederation with their 160 delegates are taking part in the conference that is chaired by presidential council member of WFTU and coordinator of WFTU CC Nepal Premal Kumar Khanal.
Focusing for the investment in productive and employment sector, minister for Labour, employment and social security Gokarna Bista, on the occasion, said that every worker should be facilitated by minimum labour standard wages and social security.
Nepal government has brought a social security scheme based on contribution, though there are some reservations from the private sector employees as they find it impractical compared to the government retirement schemes.
Likewise, deputy general secretary of WFTU and in charge of Asia Pacific region H Manadevan, delivering his speech, said that WFTU has been always fighting against the exploitation of labour. “The FWTU is heading forward for the fulfillment of basic needs including food, housing, education, medicine, fresh drinking water including employment and social security,” he said.
The conference will conclude with the Kathmandu declaration tomorrow evening.

Japanese assistance for building rehabilitation center for Muscular Dystrophy sufferers

The Ambassador of Japan to Nepal Masamichi Saigo today signed a grant contract with the Muscular Dystrophy Foundation-Nepal (MDF-Nepal) to build a rehabilitation center for people with muscular dystrophy in Kathmandu District.
The construction is expected to cost approximately Rs 10 million. The project for building the rehabilitation center for people with muscular dystrophy is funded under the Grant Assistance for Grassroots Human Security Projects (GGP) of the government of Japan.
At the signing ceremony, ambassador Saigo said he hoped that the grant would contribute towards improving health care services for people with muscular dystrophy in Nepal.
MDF-Nepal was established in 2003 by parents, who lost their children to muscular dystrophy. At present, MDF-Nepal does not have enough space for rehabilitating patients and the project will enable it to provide more effective services to patients.
The Embassy of Japan – in its press note claims that – believes that the project will contribute towards enhancing the friendship that exists between the peoples of Japan and Nepal. 

Inflation at almost three-year-high

Spike in food price has pushed inflation up to an almost three-year-high of 6.95 per cent in the first month of the current fiscal year, the first time since September 2016. During the same month of the last fiscal year, inflation stood at 4.19 per cent only.
The government has set a target of containing the inflation at 6 per cent in the current fiscal year but the rising food price has made the government target seem impossible.
Earlier, the annual inflation stood at below five per cent in the fiscal years 2016-17, 2017-18 and 2018-19, due to stable food prices but since June, inflation has once again started to spiral upwards.
In mid-June, inflation shot up to 6.2 per cent and stood at six per cent in mid-July.
Consumer prices are lately going up due to a jump in prices of food items, according to the central bank. “Prices of vegetables shot up by 23.38 per cent in mid-August compared to the same month a year ago,” according to the Current Macroeconomic and Financial Situation report of the first month of the current fiscal year published by the central bank. “In mid-August, prices of fruits and spices also increased by 20.2 per cent and 13.2 per cent, respectively, compared to the same month of the last fiscal year.”
Overall, food prices, which contribute 43.9 per cent to the inflation basket, increased by 8 per cent in the first month, it reads.
According to the central bank, prices of vegetables, fruits, spices, meat and fish spiked in the review month. “Among the nonfood and service groups, prices of items in housing and utilities, clothes and footwear, and education sub-groups rose significantly.”
The jump in salary and wage rate index has also fueled price rise in the market as the year-on-year salary and wage rate index increased to 13.44 per cent in mid-August 2019 compared to 7.4 per cent a year ago, according to the central bank.
Though Nepal imports inflation with the food items from India, the Inflation stood at 3.2 per cent in India in August, which is 3.7 percentage points lower than in Nepal. The inflation difference between Nepal and India has largely been widening since June also due to lack of tighten market monitoring and government’s failure in discouraging middlemen from taking undue benefits. The market is flooded with the middlemen that take high profit margin due to lack of stringent market inspection.
The rising inflation will, however, hit the fixed wage earners as most of their income is spent buying food items.
But the traders have attributed the surge in inflation to pressure in the supply of essential goods, including food and vegetables, rise in labour cost and upward trend of consumer price in India.

BoP records Rs 6 billion surpluses after over a year

The Balance of Payments (BoP) recorded a surplus of Rs 6.05 billion in the first month of this fiscal year – from mid-July to mid-August – compared to a deficit of Rs 24.77 billion in the same month of last fiscal year, according to the central bank.
The BoP has recorded a surplus for the first time since July 2018, due to increase in export volume and reduction in import, though the ballooning trade deficit has not seen any remarkable reduction. The Current Macroeconomic and Financial Situation report of the first month of fiscal year 2019-20 also revealed trade deficit has declined by 11.5 per cent due to higher export earnings and a steep fall in imports, though the transformation in import and export patterns seems ‘unusual’ because the government’s policy adjustments has nothing to do with the change.
“The merchandise imports contracted by 11.5 per cent to Rs 106.73 billion against an increase of 54.3 per cent in the same period of the last fiscal year, whereas merchandise exports rose by 27.7 per cent to Rs 8.84 billion compared to an increase by 3.2 per cent – in the first month of the last fiscal year – largely due to huge quantity export of refined palm oil. Nepal started exporting refined palm oil a few months ago as it imports crude palm oil. “The crude palm oil is refined and then exported again,” according to the traders, who were surprised to find out the increasing export of palm oil in recent months.
However, the government claimed that its policy to discourage import of luxury four-wheelers has bring the imports down. The government has doubled the excise duty on imported vehicles through the budget for the fiscal year 2018-19. The down payment on auto loans has also been jacked up to 50 per cent of the value of the vehicle. The central bank statistics revealed that imports of vehicles and spare parts during the review period fell by 20.3 per cent year-on-year to Rs 6.56 billion.
The reduction in the trade deficit has brought down the country’s current account deficit to Rs 9.37 billion, down from Rs 25.16 billion in the first month of the last fiscal year. “In US dollar terms, current account deficit remained at $84 million in the review period compared to $228.5 million a year ago,” the report reads, adding that the remittance inflows, though marginal, increased by two per cent to Rs 75.40 billion against an increase of 33.1 per cent in the first month of the last fiscal year.
Similarly, the country witnessed an increase in the gross foreign exchange reserves to Rs 1,064.64 billion in mid-August from Rs 1,038.92 billion in mid-July this year.

NEA to check distribution losses

The Nepal Electricity Authority (NEA) aims to bring down distribution losses to 8.5 per cent within this fiscal year by checking the electricity pilferage.
According to NEA managing director Kulman Ghising, the NEA has shifted its focus to improve the reliability of energy supply, adopting stern governance measures at consumer touchpoints, and enhancing financial discipline at distribution centres. “We plan to achieve the reduction targets by optimum utilisation of sealed conductor cables in loss-prone areas, upgrading overloaded transformers and coordinating with the local administration to investigate cases of meter tampering and electricity pilferage,” he said, adding that the country has witnessed energy leakage of 11.28 per cent – in the fiscal year 2018-19 – resulting in financial losses amounting to millions, though the pilferage has come almost half down in last five fiscal year. “In the fiscal year 2014-15, the NEA had recorded some 19.87 per cent energy leakages due to weak power delivery infrastructure including substations and transformers.”
To check the pilferage and meet the new target to curb it, the state power utility has issued circulars to eight distribution centres and its division offices asking them to upgrade the capacity of transformers and balance the power load. The NEA has asked Janakpur, Attariya, Nepalgunj, Biratnagar and Butwal centres – that have recorded high distribution losses – to reduce more losses – whereas Hetauda, Kathmandu and Pokhara distribution centres – with low losses – have received low targets.
Likewise, the Province 1 office at Biratnagar with 24 distribution centre has been asked to bring down system losses to 8.8 per cent from the existing 12.15 per cent. The Province 2 office with 23 distribution centres has been directed to cut back losses from 23.36 per cent to 10.97 per cent. Similarly, the Butwal wing of the power utility with 11 distribution centres is expected to reduce losses to 9.26 per cent from 12.36 per cent. “And the Attariya office with 12 distribution centre is expected to bring losses down to 10.69 per cent from 14.39 per cent.”
Though, a 10 per cent reduction in energy loss has resulted in an increase in revenue of Rs 7 billion, the NEA has been able to reduce transmission and distribution losses to 15.32 per cent, according to the Distribution and Consumer Service Directorate of the NEA. “We aim to cut losses by strengthening the network, upgrading the capacity of the transformers, bringing new substations into operation to balance the load and keep tabs on electricity pilferage,” he said, adding that the reduction of distribution losses is considered by energy officials to be a fundamental effort consistent with achieving Sustainable Development Goal 7 (Sustainable Energy for All) and Nepal’s Nationally Determined Contributions for the United Nations Framework Convention on Climate Change.
Nepal has added more than 600 kilometres of power lines to domestic and cross-border electricity transmission network, and built 30 new distribution substations in the last fiscal year. The NEA plans to spend more than 50 per cent of its budget for the current fiscal year on increasing the capacity of transmission lines and power distribution infrastructure as the old system cannot manage the increasing power supply and distribution.
The NEA needs to overhaul current distribution system and existing substation, apart from new transmission lines construction with distribution grids in strategic industrial zones, the reliability of electricity transmission throughout the grid could be improved.
According to a report by the Asian Development Bank – the financier of the Power Transmission and Distribution Efficiency Enhancement Project – Nepal's power supply is expected to increase rapidly during the next several years because of commissioning of the 456 MW Upper Tamakoshi hydropower project and an additional 1,635 MW from multiple hydropower projects with planned commissioning by 2022.
The ADB has provided $150 million as a 32-year term concessional loan at 1 per cent interest during the eight-year grace period and 1.5 per cent interest after the grace period under the distribution enhancement project.

The lost electricity 
Fiscal Year – Distribution Loss (per cent of available energy)
2014-15 – 19.87 per cent
2015-16 – 19.80 per cent
2016-17 – 16.83 per cent
2017-18 – 14.82 per cent
2018-19 – 11.28 per cent

Government shortlists developer for Nijgadh airport project

The government today shortlisted developers for the construction of three mega projects including Nijgadh International Airport, Lower Arun Hydropower Project and Kathmandu Outer Ring Road Project.
A meeting of the Investment Board Nepal (IBN) chaied by Prime Minister KP Sharma Oli today shortlisted the Swiss company Zurich Airport International AG to develop Nijgadh International Airport Project and decided to seek extensive proposal from it to construct the second international airport in Bara, according to a press note issued by the board.
“Though some seven firms submitted their proposals for for the construction of second international airport, only Zurich Airport International AG is qualified for the project as its LoI matched the eligibility criteria set by the board,” chief executive officer of the board Maha Prasad Adhikari confirmed. “The remaining six companies failed to meet the criteria.”
The other firms including Matrix Enterprises of Nepal, China Airport Construction Group and China State Construction Engineering Company from China, GMR of India, Qatar Airways and Vinci Group of France were disqualified due to lack of eligibility criteria.
Construction modality of the airport project had remained a major conflict between the government, political parties and the private sector. While calling for EoI for the development of the project, the government had sought proposals from interested firms to build the airport project either under the build, own, operate and transfer (BOOT) or public private partnership (PPP) modality.
The estimated cost of the airport project stands at Rs 400 billion ($3.45 billion), according to the board. “The airport will be built in three phases; the first phase will cost $1.21 billion, the second phase $1.12 billion, and the third phase $1.12 billion.
The government had decided to develop Nijgadh International Airport, one of the most ambitious projects, in 1995. But the timeline for the new airport was pushed back on multiple occasions due to financing and legal issues over its environmental impact. The Environmental Impact Assessment (EIA) report approved by the government shows that more than 2.4 million small and large trees will have to be cut down to build the long-awaited modern international airport in Nijgadh that will have a 4,000-metre runway.
The meeting also went through the proposal to construct Lower Arun Hydroelectric Project. According to the board, three firms – SJVN Ltd of India, a joint venture between Nepal’s HIDCL and Power Construction Corporation of China Ltd, and a joint venture between Nepal’s Green Resources Pvt Ltd and Electric Power Development Company (J Power) of Japan – submitted proposal to develop 679-megawatt Lower Arun Hydropower Project that is estimated to cost Rs 670 billion. “All the three proposals on Lower Arun meet the board’s eligibility criteria so ‘the board is preparing to ask them for detailed proposals,” Adhikari said, adding that the board will evaluate their proposals and pick a firm for the development of the public-private partnership project.
The Lower Arun Hydropower Project has been in limbo since 2016, when the government revoked the licence of a Brazilian company, Brass Power. The government had issued the licence to the Brazilian company in 2012. The Brazilian company had even planned to export more than 50 per cent of the energy generated to India but Brass Power did not show interest in developing the project after there was no progress in the power purchase agreement (PPA) with India.
After revoking the licence, the government had kept the project in its basket and was looking for a builder.
Likewise, the board has also received four proposals for the construction of the Kathmandu Outer Ring Road Project, but three proposals did not meet the eligibility criteria. “A Chinese construction company, China Communication Construction Co, has been shortlisted for the development of the Kathmandu Outer Ring Road Project,” the board informed, adding that the 72-kilometer Outer Ring Road will be constructed at a cost of Rs 212.3 billion. “If the detailed proposal, which has yet to be received from the shortlisted Chinese firm, is found satisfactory, then the project will be awarded.”
As per the initial study report in 2008, the cost of construction of the project was expected to hover around Rs 70 billion.
However, since the price of land has skyrocketed in the intervening years, the project construction cost is expected to shoot up. The project was initially proposed 14 years ago in the budget for the fiscal year 2005-06. The initial cost estimate for the project stood at Rs 6 billion.
The much talked Outer Ring Road will be 50 meters wide with eight lanes, cycle tracks, green belts and pavements on both sides along with flyovers at major intersections, according to the board.
“The companies that have been shortlisted for all these projects will submit their detailed proposals and the board will evaluate them,” Adhikari said adding that the contracts will be awarded to those that fulfill all the requirements.
According to the World Bank, Nepal needs to spend 10 per cent to 15 per cent of the gross domestic product (GDP) annually on infrastructure for the next 10 years. To boost investments, the government earlier this year in March had organised Nepal Investment Summit 2019, which saw investment proposals worth about $17.5 billion from both domestic and foreign investors. All the three projects were showcased during the Investment Summit 2019 in March.

SAARC Chamber organises three-day Startups Boot Camp

The SAARC Chambers of Commerce and Industry (CCI) 3-day boot camp for starts up kicked off in Male, Maldives today. It is aimed at providing support to innovative companies to access new markets and grow their businesses by integrating flexible electronics technologies into advanced products and services. The third camp – an initiative of SAARC CCI Startups’ Boot Camps series – is being organised by SAARC Chamber of Commerce and Industry (SAARC CCI) in partnership with the Friedrich Naumann Foundation for Freedom (FNF).
Minister of Economic Development of Republic of Maldives Fayyaz Ismail will grace the inaugural session of the camp as chief guest and will address the entrepreneurs. Minister of State for Economic Development of Maldives Neeza Imad, President of Maldives National Chamber of Commerce and Industry (MNCCI) Ismail Nooradeen and vice chair of SCWEC Ms. Shaira Saleem will also grace the occasion.
The selected thirty-two startups, who qualified for the SAARC CCI’s Startup Boot camp ‘Strengthening Startup Ecosystems in South Asia: Cross-Border Boot Camps for Innovative Entrepreneurs Maldives’, will be mentored with leading mentors from India and Maldives by sharing their own experiences, helping teams to address their weakness in business and economic knowledge. Mentors usually have experience working through the same or similar problems and can build a sort of a ‘case study’ for the mentee to think about and work through. Mentors then help the mentee examine and solve their own problem, but the emphasis is always on helping the mentee come up with their own solution.