Provincial leaders commit to implement findings of federalism stocktaking report

The Chief Ministers of five provinces expressed appreciation of the process and agreement of the findings and recommendations of the Federalism Capacity Needs Assessment (FCNA) at a special briefing event on the FCNA held today.
The briefing – jointly organised by the finance ministry amd ministry of Federal Affairs and General Administration – was delivered by the country manager of the World Bank in collaboration with the United Nations Development Programme (UNDP) in Nepal and in the presence of international development partners.
“Nepal’s transition to federalism significantly increases the need to develop capacity at all levels of the government and to modernise the governance system and institutional framework as an ongoing process,” stated finance minister Dr Yuba Raj Khatiwada, on the occasion.
“This will help in taking on new service delivery responsibilities as required in the federal set-up, and also meet growing demand for better public services,” he said, adding that the FCNA is an assessment of Nepal’s capacity needs in the provincial and local governments to implement federalism, along with a roadmap of priorities for all three levels of government over the short and medium terms.
Led by the government with the support of the World Bank and UNDP, the FCNA was jointly undertaken by the Georgia State University and Nepal Administrative Staff College, which was initiated in September 2018 and completed in December 2019. The assessment covered the federal government, seven provincial governments and a representative sample of 115 local governments using informant interviews, desk reviews and questionnaires, and focused on three main elements of capacity: organisational, institutional and regulatory, and physical infrastructure.
“Nepal has made a historic move from a unitary form of government to a federal system that builds accountability of three levels of the government,” minister of Federal Affairs and General Administration Hridayesh Tripathi said, adding that the success of federalism in Nepal implies success in all three levels of government which requires that they work together as one in meeting the aspirations of the people.
The FCNA identifies measurable progress since the adoption of the federal constitution in 2015 with the set up of key institutional structures, strengthening of the regulatory environment and strong initial progress in the adjustment of personnel in all levels of the government. Provincial and local governments account for about 34 per cent of total national expenditure, suggesting strong government acknowledgment of the importance of fiscal federalism. However, the FCNA notes that gaps still exist between the needs and existing capacity at all levels of government to manage new functions.
During the interaction, chief ministers, who attended the meeting expressed their views that relate to the need for infrastructure building, technical support in better planning and execution of projects, capacity building of human resources both at the provincial and local levels, and better coordination within provincial governments and with the federal government. They also appreciated the cooperation from development partners to support the implementation of federalism and welcomed the plan of dissemination of the FCNA in two provinces.
The assessment calls for a strategic approach to capacity building for federalism, including the need to prioritize measures to strengthen the foundations for intergovernmental and inter-ministerial coordination and monitoring of the implementation of federalism. The FCNA recommends a roadmap essential to help improve Nepal’s capacity readiness for federalism.
The FCNA was first disseminated at the federal level in December 2019. The report dissemination process, which seeks to mainstream findings and recommendations in all three levels of the government, will be completed by disseminations organised for provincial and local government officials and other stakeholders within the first quarter of 2020.
“The FCNA is a dynamic document that is intended to facilitate discussions on the way forward,” World Bank country manager for Nepal Faris H Hadad-Zervos said, adding that identifying the capacity needs for federalism is just one part of the equation. “The other and important part is to operationalise the FCNA findings and recommendations.”
“We are committed to support this process and the broader implementation of federalism in Nepal,” he added.
“It is all about bringing basic facilities and services like education, drinking water, food, basic health and roads faster to those really in isolated places,” UNDP resident representative Ayshanie Medagangoda-Labé said, adding that it is also about having the will and expertise to work in a different way. “We hope the FCNA will give the evidences for a strong foundation on which we the partners can rally to complement each other and deliver on the commitment.”

PATA Nepal Chapter postpones NICE

The ‘Nepal India China Expo (NICE)’ scheduled initially for February 22-25 has been postponed due to some unfavourable circumstances, and limitations on the travel of Chinese delegates due to the novel coronavirus outbreak in China, according to PATA Nepal Chapter.
 The executive committee meeting of Pacific Asia Travel Association (PATA) Nepal Chapter held today decided to postpone the event as a matter of precaution to the health and safety of all the delegates and invitees.
“At the moment, we are closely monitoring the ongoing crisis (coronavirus pneumonia) in China, and shall endorse an appropriate future date for NICE once the situation seems controlled and favourable for this historic tri-national tourism expo,” the chair of PATA Nepal Chapter Bibhuti Chand Thakur said, adding that they have requested all its registered delegates, invitees, and stakeholders to stay tuned for further updates from the association.
The National Programme Coordinator of Visit Nepal Year 2020 (VNY2020) Suraj Vaidya said that NICE is one the top priority event, which shall play an instrumental role for the growth of tourism in Nepal, and we will be working together with PATA for making this a successful event of 2020.
Likewise, PATA Nepal Chapter chief executive Suresh Singh Budal informed that the necessary preparation is almost completed with confirmed participation of 120 buyers and 50 exhibitors however, due to the present unfavourable scenario, the association has decided to organise the event on later dates this year. “It's a high time to come together to show our solidarity for speedy control and recovery of health crisis; meanwhile, we have to take precautions and work together for the possible risk mitigation and crisis management in tourism,” he added.

WB approves additional credit to support reconstruction

The World Bank has approved an additional credit of $200 million to the Earthquake Housing Reconstruction Project (EHRP) in Nepal.
The project and the second additional financing contribute to the Nepal’s umbrella Housing Reconstruction Program (HRP), which aims to rebuild earthquake-resistant core housing units by providing housing grants to eligible beneficiaries who have enrolled in the programme. The second additional financing will scale up EHRP’s support to the government’s HRP by financing reconstruction of an additional 86,680 houses in the 32 districts affected by the 2015 earthquakes. The impact of the earthquakes is estimated at 35 per cent of Nepal’s Gross Domestic Product (GDP) with recovery needs of about $7 billion.
“It is our aim to ensure that no one is left behind as Nepal builds back better from the devastating earthquakes of 2015,” World Bank country director for Nepal, Sri Lanka and Maldives Idah Z Pswarayi-Riddihough is quoted in a press note issued by the World Bank office in Kathmandu. “We support the Government of Nepal’s efforts in reconstruction to help Nepalis rebuild not just homes but also lives,” he added.
The EHRP, approved in June 2015 supported resilient reconstruction of approximately 55,000 houses in the districts most affected by the earthquakes while an additional IDA credit of $300 million was approved in December 2017 to scale up the EHRP and help bridge the financing gap in the HRP by supporting 96,000 additional households under the project.
The EHRP adopts an owner-driven housing reconstruction approach that promotes earthquake-resistant building techniques and materials and aims at improving long-term resilience through a culture of safer and sustainable housing and settlements.
Under the project, eligible beneficiaries receive grants of Rs 300,000 (approximately $2,730) each for reconstruction of houses in compliance with approved reconstruction guidelines in three tranches. As of January 2020, out of 685,193 beneficiaries enrolled under the government’s HRP in 14 most affected districts, 99 per cent received the first tranche, 81 per cent received the second tranche, and 70 per cent received the third tranche of the housing grant.

Construction of New Butwal substation nearing completion

Planned to be completed and bring into operation by this March, the construction of New Butwal substation at Sunwal of Nawalparasi is nearing completion.
According to the Nepal Electricity Authority, the substation is part of the move to reinforce the transmission system to facilitate bilateral and regional power trade, and enhance the national grid for domestic energy distribution.
“The project will be completed within the targeted time,” Nepal Electricity Authority (NEA) managing director Kulman Ghising said, after a visit of the construction sites. Taking updates of the project with the the contractor company, he directed to complete the project within time. “Only the installation of the equipment is left," he said, asking to complete the civil structures and focus on the installation of equipment. “The NEA is there to help whenever there is any problem.”
“After the substation comes into operation, the technical leakage will be reduced by 4 per cent to 5 per cent, Ghising said, adding that the consumers will get reliable and sufficient power supply, and the problem of power cuts during summer will also be solved.
The Indian contractor Tata Project Ltd is planning to operate the substation by mid-April. The state power utility plans to evacuate electricity generated by schemes in the Kali Gandaki River basin through 220KV Kaligandaki Corridor transmission to New Butwal substation and to the national grid. The New Butwal substation aims to promote domestic power consumption and cross-border or regional electricity trade.
The second cross-border transmission line for electricity trade between Nepal and India will start from New Butwal substation. Nepal and India have agreed for electricity trade, construction, and implementation of New Butwal-Gorakhpur 400kV double-circuit transmission line. Built in about 20 bighas of land, New Butwal will be the second largest electricity hub after Dhalkebar substation at Dhanusha.
According to a report by the National Renewable Energy Laboratory’s Strategic Energy Analysis Centre of the US, Butwal in south-central Nepal is strategically located for cross-border energy trade between India and Nepal because of its proximity and ability to connect with India’s Uttar Pradesh state and the Northern Regional Load Dispatch Centre via Gorakhpur where power demand is high during the monsoon.
New Butwal substation is also the starting point of the second high capacity transmission link between Nepal and India for bulk movement of hydroelectricity. Another 400kV substation has also been planned at the site for cross-border energy exchange.
The government will construct another substation with a capacity of 400kV will be built at New Butwal from the grant provided by the US through Millennium Challenge Corporation (MCC). The MCC will also build transmission line from Damauli of Tanahun to New Butwal.
Electricity transmitted through 132kV transmission line from Hetauda of Makwanpur to Bharatpur will be supplied to the area after trapping the electricity at East Chitwan substation.
Nepal and India – in October – agreed to fund the transmission line connecting Butwal to Gorakhpur in India through a commercial entity with both countries pledging equal entity in the funding of the project. The proposed transmission line is also a major component of the $630 million Nepal Compact, an agreement between the government of Nepal and Millennium Challenge Corporation of the US, which has stirred political controversy in Nepal.
Millennium Challenge Account-Nepal, the implementing agency of the transmission and road projects under the US grant, plans to set up a 400 kV transmission line from Damauli in Tanahu and connect it to New Butwal substation.
Also, the Nepal Electricity Authority is building a 220 kV Bardaghat-Butwal transmission line financed by the World Bank (WB) another 400 kV link to western Nepal, from Butwal to Kohalpur and to Upper Karnali via Surkhet, has been proposed to be built with preparatory studies ongoing under a $21 million grant from the Asian Development Bank (ADB).
Nepal is currently trading up to 250 megawatts of electricity with India through the Dhalkebar-Muzaffarpur setup, and work is underway to upgrade Dhalkebar substation to 400kV capacity in a bid to relay a larger amount of power. The move is also expected to allow the two countries to run their electricity grid in synchronous mode, and facilitate a smooth and reliable flow of electricity.

Gold price sets new record by trading at Rs 76,000 per tola

The price of precious yellow metal today set a new record by increasing Rs 1000 per tola overnight to be traded at Rs 76,000 per tola (11.667 gm), according to the Federation of Nepal Gold and Silver Dealers’ Association (Fenegosida).
The gold price was fixed at Rs 75,000 per tola yesterday but it soared by Rs 1000 overnight in the global markets due to escalating tensions between the United States and Iran after Iran's top military officer killed in the US airstrike a few days ago, the association said, adding that the conflict has forced investors to turn to safe havens like gold.
The price of gold has been rising steadily in the domestic market since July. It had climbed to Rs 73,500 per tola on September 4 and December 31 last year.
The rising price of the gold has, however, pulled down demand of gold in the domestic market. According to the association, the daily demand for gold used to be around 50 kg during this season but with the rising price the demand has dropped to more than half.

Nabil Bank partners with ICICI Bank

Nabil Bank and India’s leading private sector bank ICICI Bank today signed a Memorandum of Understanding (MoU) that sets out a framework for co-operation and strengthen the existing relationship between the two institutions across various businesses like trade, remittances and treasury.
Nabil chief executive Anil Keshary Shah and head of International Financial Institution Group under ICICI Bank Ranju Sigtia signed the MoU at Nabil Bank’s head-quarters in Kathmandu.
The banks will work in close co-ordination with each other to support the trade and treasury needs of their customers seamlessly. The initiative will enable both the banks to effectively leverage the combined strengths of Nabil Bank’s deep market access in Nepal and ICICI Bank’s expertise in banking and the distribution franchise across India and in key global markets, reads a press note issued by the Nabil Bank.
“We are proud to partner with ICICI Bank,” said Shah after signing ceremony. “This MoU creates a platform for sharing knowledge and deepening network connectivity between Nabil Bank and ICICI Bank - especially for our customers doing business with India,” he added.
Speaking on the occasion, Sigtia said that Nepal has a strong and growing, trade and investment corridor with India. “The ICICI Bank has been actively working with partner banks to connect customers in Nepal with India and other overseas locations, where ICICI Bank has its presence,” she said, adding that in line with the bank’s continuing commitment to furthering participation in the growing India-Nepal economic corridor, the bank is delighted to sign this MoU with Nabil Bank.

Gold price soars to record high of Rs 75,500 per tola

Increasing by Rs 1,000 overnight, gold price has set a new record of Rs 75,500 per tola (11.664 gram) in the domestic market today.
According to the Federation of Nepal Gold and Silver Dealers’ Association (Fenegosida) confirmed that the precious yellow is traded at Rs 75,500 per tola today, from yesterday’s Rs 74,500 per tola.
Gold price has been breaking its own record every day due to tensions amid middle east after Iran’s top military commander was killed in an airstrike. The price went up for the third time this week between December 29 and January 4, the association informed, adding that the gold price was fixed at Rs 73,300 per tola on Sunday and remained constant on Monday. “But on Tuesday, gold price went up by Rs 200 a tola to be traded at Rs 73,500, and remained constant till Thursday,” it said, adding that however, on Friday gold price rose sharply by Rs 1,000 per tola to close the trading week at Rs 74,500 per tola.
The Iran-US conflict led investors to invest in gold – which is considered a safe haven investment –pushing up the price of gold in the international market. The increase of the gold price in the international market subsequently pushes the domestic market price too, apart from the rising US dollar against Nepali rupee that also pushed gold price up in Nepal.
Last June, gold was traded at Rs 59,500 per tola following a jump in prices due to trade tensions between the US and China and also a hike in Nepali import duty by Rs 800 per 10 gm. The customs duty was again raised by Rs1,500 per 10 gm in November.