NEA, HBL ink Rs 6b deal

BY THIRA L BHUSAL
KATHMANDU, JULY 17

The 309-megawatt (MW) Upper Tamakoshi hydroelectric project made one more significant step towards materializing after Nepal Electricity Authority (NEA) and Himalayan Bank Ltd (HBL) Wednesday signed a memorandum of understanding (MoU) in connection with investment in the project.

A consortium of 10 commercial banks of which HBL is to be the lead bank, will mobilize six billion rupees for the project. Arjun Karki, Executive Director of NEA, and Ashok SJB Rana, Chief Executive Officer of HBL, singed the MoU on Wednesday at a program organized at NEA premises.

The Employees Provident Fund (EPF) has already decided to invest Rs 12 billion in the project and it also signed a MoU with NEA a few months back.

"Now we need around three to four billion rupees more for the project," said Karki at the signing function, adding, "Also, talks are underway with Rastriya Beema Sansthan and the Citizens' Investment Fund for arranging more funds for the project."

"Hence, we can very confidently arrange the financing arrangement and take the project ahead." The project's total estimated cost is Rs 27 billion.

He said this development has shown that Nepalis can quite efficiently build big hydroelectric projects on their own. "The commercial banks' support has boosted our confidence and indicated ample opportunity in the local markets," he said. Rana of HBL said the prospect of financing such a big project was a great oppertunity for local banks. "This is a good opportunity to prove one’s capacity because it is the first big project to be built with the investment of Nepali banks alone," Rana added.

Upper Tamakoshi located in the northern part of Dolakha district is a run-of-river project.
The project is taken as an ideal one in terms of cost and location.
NEA, which holds the license for the project, plans to complete it by 2013 BS for selling power entirely inside Nepal.

"We are six months behind the scheduled plan," Karki said, adding that NEA is going to call for a tender bid in a month to construct the tunnel.

Karki urged commercial banks to invest in building the transmission lines required in several parts of the country.

From: THE KATHMANDU POST

Govt selects builders for Sikta canal

BY THIRA L BHUSAL
KATHMANDU, July 9

The joint venture of China Tiesiju Civil Engineering Group Company Limited and Kalika Construction Private Limited has been selected for major canal construction works in Sikta Irrigation Project (SIP) in Banke district.

The joint venture of Chinese and Nepali construction companies was selected as it was found to be the lowest bidder in the international competitive bidding called by the government on May 17.

The joint venture of Chinese and Nepali companies submitted their bid of 1 billion 470 million rupees (excluding VAT) for the 11.42 kilometer long canal construction.
The other two -- the second lowest and third lowest bidding -- construction companies proposed costs of over two billion rupees, according to Senior Division Engineer Raghu Nath Shrestha of the Department of Irrigation (DoI), under Ministry of Water Resources. The Sinohydro Corporation of China, which has been constructing the dam of the irrigation project, was second lowest bidder and China Water International Electric Corporation was the third lowest bidder in the international competition. The tender was floated on July 1.

However, DoI will thoroughly verify the companies' documents and their application procedures before formally okaying their bids, according to Shrestha. "If the joint venture of the two Nepali and Chinese companies is disqualified, there will be some difficulty in offering the project to the second lowest bidder as there is huge difference between the lowest and second lowest bid amounts," he clarified.

Sinohydro, a Chinese state-owned construction company, that has been building the dam of the project will complete the construction work up to 614 meters of the dam. Then, China Tiesiju Civil Engineering Group Company Limited and Kalika Construction will undertake the construction of the main canal from 614 to 12,036 meters.

Besides the aforementioned three companies, China Gezhouba Group Company also qualified for bidding. However, it did not bid for the project.

Likewise, other Nepali construction companies have been selected for construction of three other sections of the canal through national bidding competition. The other national companies selected are joint venture of Tamang Construction Company and Rasuwa Construction Company, and joint venture of Waiba Bhairav, and Himdung and Thokar construction company.

The former will construct the canal from 12,036 to 13,000 meters while the latter will construct the remaining two sections - 13,000 to 14,000 meters and from 14,000 up to 15,000 meters, according to Shrestha.

The government had called for re-bid for canal construction works as the lowest proposal in the past bid was more than the estimated cost.

The total cost of the project was estimated at over seven billion rupees some years back. But, in view of rise in the price of construction materials and other factors, the total cost of the entire Sikta Master Plan was estimated at 12 billion rupees when it was updated last December, Shrestha informed.

Around 36,766 hectares land in the mid-western region will be irrigated by the project.

THE KATHMANDU POST

Capitalize on Chinese Open Markets

By Kamal Raj Sigdel

JUNE 2006: Kathmandu

With the visit of the State Councilor of China, Tang Jiaxuan, Nepal has seen newer prospects for developing its export market in one of the world's fastest growing economies. Tang's visit remained meaningful in many respects.

In an economist's perspective, China granted duty free access for Nepalese commodities to its markets. This is an opportunity opened for Nepalese economy at a time of political unrest. Call it a coincidence, at a time when international community is not in the support of present government. The fact is that it came after more than five years of bargaining with China. However, boasting upon it as a political achievement and as a gimmick to gain public confidence, while making no headway ahead will make nothing out of it. Though it will have no immediate results visible in our economy, in the long term it will promote Nepal's export sector thereby recovering Nepal's balance of payments with China. It is up to us whether we could build on this new trade agreement. Both the public and private sectors should start thinking towards making strategies on how could the facility be best utilized before it is too late for us.

However, the situation is that Chinese markets are still largely incomprehensible to Nepalese entrepreneurs. There is a seer lack of knowledge on Chinese markets, which has been a great challenge for potential Nepalese exporters. Without a better knowledge base, scientifically tested studies and market research, it is for sure that Nepalese commodities will not be able to compete in the Chinese markets. At such scenario, if some concrete actions are not taken to address this basic problem, opening of Chinese markets to Nepalese products will make no difference however liberal may it be.

For a beleaguered economy like ours, opportunities in today's world of competition and liberalism come along with challenges. WTO came to us in much the same way. There were questions among debates when Nepal as a first LDC entered into WTO: "are we prepared enough"? The trade agreement signed between Nepal and China during Tang's visit for providing duty free access to Nepalese goods, brings to us opportunities (came out of the same WTO negotiations) that Nepal never had. But to our weakening economy, there are challenges too, i.e. to be able to fully capitalize on this opportunity.

The fact is that Nepal will not only be a player in Chinese markets, even in neighboring Tibet Autonomous Region. In a move to fulfill its commitments made at WTO, China is granting duty free access to other LDCs as well as. Besides, Chinese goods would appear as much daunting as rest of the challenges for Nepalese exporters in Chinese markets. Ignorance of Chinese market organization, structures, behaviors, demands, local competencies, cultures and systems will further add up to the challenges as these factors are always critical to exporters.

Addressing these issues, therefore, seem very critical for Nepalese business community that is willing to grab this opportunity at this time. Tapping up this opportunity is also very important for HMG Nepal, as it shows possibility of balancing Nepal's huge trade deficit that is still with majority of its trading countries including India and China. Compared to the situation of trade balance with India, which accounts for 61.28 % of Nepal's total trade, the situation with China is unfavorable. More than the mainland China, its Tibet Autonomous Region occupies most of the trade activities with Nepal, as it is the closest market for Nepal in the north. Compared to the Tibet, the possibilities of expanding Nepalese export to China's major markets seems daunting as the distance to major Chinese cities like Shanghai and Beijing is longer. With the same token, the Tibet Autonomous region faces some challenges in bringing goods and services from mainland China's central markets which stretch thousands kilometers away from Lasha, the capital of Tibet Autonomous Region.

At such scenario, regarding distance and other factors, Nepal will be better performing in promoting its export market in the north if major focus is given to Tibetan territory while we try to capitalize this recent trade agreement. As a part of our long-term plan, the first target market for Nepal in utilizing China's open market would, therefore, be the Tibet Autonomous region followed by Hong Kong and mainland China.

When we get start with Tibet as our first target, our strategy to make entry into Chinese Markets, should not be based on the past trade profiles. Rather we should explore new initiatives for trade diversification while thinking of ways to sustain competing-capacity of currently exporting items in the future competitions.

Currently, Nepal is exporting mainly woolen carpets, woolen garments, hides and skins, leather, sculptures, jewellery, and articles of plastics. Wee will soon be facing clear competition in these goods. Though other goods like live plants, black salt, handbags, bags, paper products, cotton garments, Gurkha knives, paintings etc. are also the items that are exported to Tibet, the amount is insignificant so as to contribute in balance of trade. There are several other products, both agricultural and non-agricultural, which have market in Tibet, but having done no studies in that sector, Nepal is lagging far behind in product diversification. As a result, statistics up to now show that Nepal's trade deficit is growing with China, practically, the Tibet Autonomous region.

Since the fiscal year 1998/99, trade deficit soared high up to Rs. 4.773 billion in the fiscal year 2000/01, which is four times grater compared to the figures in fiscal year 1998/99. However, slight decrease in import coupled with slight increase in export in the period between fiscal year 2000/01 and 2003/04, did show positive effect in decreasing trade deficit. But after the fiscal year 2003/04, the trade statistics show Nepal's trade deficit increasing rapidly, which has been further intensified by the increasing import and decreasing export scenario. Nepal's export to Tibet alone decreased by 17.73% during the fiscal years 2003/4 and 2004/5.


This reinforces the need of promoting Nepalese export market in Tibet. Tibet has been one of the major trading partners of Nepal from before the unification of Nepal (around 238 years ago). In recent days, markets in Tibet are growing as the population and development activities are growing simultaneously. China has already set out to develop infrastructures including transport and other facilities to link Tibet with major cities in China mainland. At this situation, Tibet is increasingly becoming one of the attractive markets for Nepalese goods. Nepal should act hard to make environment for maximum utilization of the facility provided by this long-term forged Nepal-China Trade Agreement. But most importantly this agreement should be made stable and trustworthy so as to let Nepalese entrepreneurs gain confidence in strategizing long-term business plans on its basis.

Sigdel a Nepali journalist currently working with Confederation of Nepalese Industry (CNI) can be reached at kamal.sigdel@gmail.com

Committee to study 600MW Budhigandaki

BY THIRA L BHUSAL
KATHMANDU, June 20

The government has formed a committee to study prospects of the 600MW Budhigandaki hydel project as it has failed to attract investors even after two calls for bids to international companies.

Not a single company applied for the storage-type hydel project even though the government extended the deadline for submission of applications.

The company has formed a three-member committee led by Anup Upadhyaya, Joint Secretary of the Ministry of Water Resources (MoWR). Sunil Bahadur Malla, Deputy Director General of the Department of Electricity Development, and Bhoj Raj Regmi, General Manager (Engineering) of Nepal Electricity Authority (NEA) are two other members of the committee.
"We have formed the committee to study how to take the project ahead as not even a single investor showed interest in the project even though we called for bids twice," Shankar Koirala, Secretary of MoWR told the Post.
The committee will study the prospects of the project and possible modalities to proceed ahead, according to him.
The government had last year decided to invite international companies for competition to undertake the project under Build-Own-Operate and Transfer (BOOT) model. But, no company applied till the deadline of 26 May.
The government had two years ago called for international proposals for Upper Karnali (300 MW), Arun-III (402 MW) and Budhigandaki (600 MW).
Nine proposals were submitted for Arun, 14 for Karnali and only two proposals were registered for Budhigandaki.
However, the taskforce, which was headed by former Finance Secretary Bhanu Acharya to study the financial and technical aspects of the proposals had disqualified both proposals .

THE KATHMANDU POST

Govt approaches India on Gandak

Delhi will act promptly: Indian embassy

BY THIRA L BHUSAL & NARAYAN SHARMA

KATHMANDU / NAWALPARASI, June 20

The government has written to its Indian counterpart about the issue of inundation in over a dozen VDCs due to obstruction of flow in the Gandak Canal in Nawalparasi district.
The Indian embassy here has already forwarded a letter to the government in Delhi. "The government of Nepal submitted some measures for the improvement of the situation over there to us. We have conveyed it to the concerned authority of the Indian government a few days ago," said Gopal Baglay, spokesperson of the embassy. He also informed that the Indian government is going to take prompt action over the matter. He further said that the Gandak Canal authorities will see to fulfillment of 12 of the demands raised by protestors in bordering villages of Nawalparasi district.
Nepal's government wrote to the Indian government after the completion of a field report on the problem. Two senior divisional engineers from the Department of Irrigation (DoI) prepared the report. "We have submitted the report with our findings and recommendations to the Ministry (of Water Resources)," said Madhusudan Poudel, director-general at DoI. "We have recommended immediate, mid-term and long-term solutions," he added.
Poudel informed that the problem arose because there was no cleaning of the syphons in the canal. Nepali officials had frequently requested Indian representatives to ensure thorough and frequent cleaning of the syphons. He also stated that the syphons should be connected directly to the outlet points to ensure smooth flow of the water.
Raising a 21-point demand, locals from over a dozen VDCs in Nawalparasi district affected by inundation have been staging sit-in protests round the clock at the canal site since May 24. The locals blamed the Nepal government for failing to properly raise the issue.
However, Poudel said that the Nepal government can do nothing except to talk to its Indian counterpart as the entire responsibility for the operation and maintenance of the canal lies with the government of India.
Locals have for years been demanding the cleaning of the syphons, maintenance of the dilapidated canal, construction of a road alongside, permanent solution to the inundation problem, and renovation of dilapidated bridges over the canal, among other things. They said that they will be continuing their struggle until they receive compensation from the Indians.
Over 1,000 locals join the demonstrations each day, the locals said. Apart from threatening to demolish both banks of the canal as well as the barrage, they have threatened to stop the water flow in the canal for two months if their demands are not fulfilled. Prem Chandra Gupta, secretary of the struggle committee, vented his ire against both governments for not taking any initiative to resolve the problem.
"The Indian side needs to clean the syphons before the monsoon begins so as to protect the areas from inundation," Gupta said.
Of the 21 demands forwarded by the locals, the Gandak Project has agreed to see to the fulfillment of 12, said Baglay. "As the officials have given assurances to fulfill their 12 genuine demands, the locals should have called off their agitation," he said. However, members of the struggle committee and officials at the site claimed that they have not been informed about any initiative being taken from the Indian side.
"I have no knowledge of initiatives taken for fulfilling the 21 demands," Anand Parajuli, liaison and land acquisition officer at the site, said. Lately, the locals have added a new condition for reviewing the bilateral agreement as their demand for compensation for inundation and erosion was not fulfilled by the Indian government even after years of protest.
Triveni-Susta, Pratappur, Guthisuryapura, Somani, Thulokhairtawa, Kudiya, Rupouliya and Bedauli VDCs among others have been badly affected. The canal stretches 19 kilometers through Nepali territory before entering UP in India.
In July 2002, then Minister for Water Resources of Bihar, Jagatananda Singh, had made a commitment to provide compensation to the affected Nepalis. Also, erstwhile Prime Minister Sher Bahadur Deuba, during an inspection visit, committed himself to talking to the Indian side about prompt compensation for the locals. However, not a single victim has been provided any relief since then.

KUKL schedule adds insult to public plight

BY THIRA L BHUSAL
KATHMANDU, JUNE 13

A few days back, water supply pipes dried up for nine days at Bahiti in Sitapaila area. Though people in the locality have been facing water related problems for years, this time things have worsened.

"As not even a single drop of water dripped down the tap for such a long period, I went to the Nepal Army (NA) barracks area [where NA personnel distribute water to locals] at 2 am," said Gyani Maya Limbu, who runs an tea shop at Bahiti, "There was already a long queue of empty vessels and children, youths and elderly people were quarrelling over their turn."

Had the NA not supplied water, people of this area would be in great crisis, she said.

Currently, the government utility supplies water once every five, six or even more days in the area, but that barely lasts for half-an-hour. "Many a time I have returned with my empty utensils after hours of waiting," said another tea shop owner Urmila Shrestha, from the same place. Even if we manage to

get some water, the amount is too little even for drinking water for one or two days, she added.

I have been staying at this house on rent, but for the past nearly nine months I have not used water from the tank at this building, said Gyani Maya. "There is no point in blaming the landlords because they have been buying water from outside to fulfill their own requirement," she added.

They no longer expect any improvement from the government utility. They are just waiting for the monsoon for things to get better.

People of this area are heavily dependent on the water provided by NA from its tank at Chhauni. "People from Kimdol, Bahiti, Sitapaila, Bafal, Museum chowk and other surrounding areas fetch water from this tank," said an army officer. NA distributes drinkable

water from six to nine in the morning and three to six in the evening.

Apart from this, people of the area fetch water all the way from Swoyambhu, around 1.5 KM from Bahiti, or some other places on their cycles, motorbikes and other vehicles.

Kathmandu Upatyaka Khanepani Limited (KUKL), which was established four months ago to improve water supply system in the capital, published a water distribution schedule on Thursday. According to the schedule, water will be distributed after a gap of six days in several places in the capital. Bahiti, Kapurdhara, Maheshline, Driverline and British Chihanline, are among the areas where water will be distributed for 45 minutes after a gap of six or more days.

"This is a shameless, hateful act ," said Narayan Poudel, a shopkeeper from Bahiti, adding, "It would be better if KUKL had not published this. It has done nothing but added insult to our plight."

According to KUKL,

water will be supplied from Kuleshwor to Kalimati and Tahachal areas once every four to five days.

It is distributing water for two hours after a gap of four days in about 50 localities inside Kathmandu. Interestingly, people in these areas have to wake up at 2 to 4 am and 4 to 6 am to fill up on water.

Many people approached by the Post expressed their ire against the authorities saying the discriminatory and irresponsible behavior of officers and staffers at the water utility is worsening the situation.

"The mischief of staffers assigned to the water distribution system is equally responsible," Poudel said, adding, "This area (Bahiti) is very close to the place from where water is released. But, still we are getting no water."

Kavita Pandey, an advocate lives in Sangam Chowk, Chachhu Marg in Baneshwor, where, according to the notice, water will be released once after a gap of four days. She claimed that around 10 households in her neighborhood that have links to higher authorities have made special arrangements by connecting larger pipes to their buildings.

KUKL published a notice on Thursday but people have no faith in its implementation.

Like tea shop owner Gyani Maya, who is looking forward to the monsoon for improvement in the situation, Deputy General Manager of KUKL, Ganesh Chandra Bajracharya has no better assurances for the public. "The present situation is a little bit difficult due to dry season. It will be better once monsoon begins," Bajracharya says.

From THE KATHMANDU POST
Posted on: 2008-06-13 19:06:18 (Server Time)

Gyanendra's last night at Narayanhiti palace

BY Thira-E-Zine SPECIAL CORRESPONDENT
KATHMANDU, JUNE 11

The recently deposed king Gyanendra Shah in Nepal is saying goodbye to the Narayanhity Palace where the royal family lived for over 100 years today evening.

He was compelled to do so as sweeping majority of the recently-elected constituent assembly members proclaimed the country a republic by abolishing the 240-year-old monarchy and directed the government to implement republic in the first CA meeting on May 28.

The government had issued 15-day ultimatum to the former king to vacate the Narayanhiti palace. The government also suggested the king to stay at Nagarjun palace in the suburb of Kathmandu valley until for other arrangement is made.

Hence, Nepal's former king Gyanendra has spent his last night in the Narayanhiti Palace.

Recently king-turned-ordinary citizen of Nepal Gyanendra Shah, is scheduled to give his first opinion as a citizen at a press conference before he and his wife Komal, the former queen, move to Nagarjun, in the north-western suburbs of Kathmandu, according to officials.

Several TV channels, FM Radio stations are making preparation and expecting to give immediate news, if not live, of king's departure from the palace.

Gyanendra's son Paras, his wife Himani along with their family have been staying at Nirmal Niwas Mahargunj, where Gyanendra lived before he ascended to the throne following the royal massacre.

The government has decided to convert the Narayanhiti Palace into a national museum.

However, the government also has decided to let Gyanendra's stepmother and grandmother (Tribhuwan's concubine) will be staying at a fenced off building inside the Narayanhiti palace compound itself.