WTO secretary general to attend NTY launch

SANGAM PRASAIN
KATHMANDU, DEC 27 -
The secretary general of the UN World Tourism Organization, seven SAARC tourism ministers and the secretary of the Cambodian Tourism Ministry have confirmed that they will be attending the inauguration of Nepal Tourism Year. NTY 2011 is scheduled to be launched on Jan. 14 at Dasrath Stadium in Kathmandu at 11 a.m.

Tourism ministers from China and Japan have expressed interest to participate in the function, but they have not confirmed, said Nepal Tourism Board spokesperson Aditya Baral. The government has invited the tourism ministers of 24 Asian countries to the inaugural to strengthen bilateral ties and promote tourism in the region.

SAARC tourism secretaries are scheduled to arrive on Jan. 11. There will be an extensive joint secretary level meeting of the SAARC Tourism Working Committee from Jan. 12-13 where discussions will focus on the problems and barriers confronting tourism promotion.

On Jan. 13, the SAARC ministers will endorse the meeting’s declaration. On Jan. 14, NTY 2011 will be inaugurated amid a gala function.

“We are inviting President Ram Baran Yadav to inaugurate the ceremony at Dasrath Stadium,” Baral said. According to the NTB, over 28,000 people are expected to participate in the three-hour-long event. The SAARC inter-government body will discuss the possibility of joint marketing, softening the visa regime, giving access to cross-border driving licenses, making Indian currency more flexible and increasing inter-SAARC movement by air by the national flag carrier of each country, a government official said.

The NTB has proposed giving a public holiday to government staff on the day. The NTB said that all the districts would organize the NTY 2011 launching programme under the coordination of their respective chief district officers. Similarly, tourist destinations like Pokhara and Chitwan, among other places, are aggressively preparing for their own special functions.

According to the Tourism Ministry, Nepal received more than 500,000 tourists in 2009.

NAC trade unions at loggerheads

SANGAM PRASAIN
KATHMANDU, DEC 27 -
Unions at the Nepal Airlines Corporation (NAC) that had united against the Fifth Freedom Right awarded to Air Arabia are now divided on whether NAC Managing Director Kul Bahadur Limbu be allowed to enter the office.

After the Commission for the Investigation of Abuse of Authority (CIAA) filed a corruption case against NAC Executive Chairman Sugat Ratna Kansakar and suspended him, the executive authority of the corporation has fallen into Limbu’s hands.

The unions’ meeting held on Monday discussed the matter extensively. However, no agreement was reached.

“If we were to stop Limbu from entering the office, there will be more delay in bringing back the aircraft that was sent for maintenance,” said Rajendra Regmi, president of Nepal National Employees’ Union, after the meeting.

Regmi added that disrupting the administrative and management work would further increase the cost of the aircraft maintenance. “So, we decided to let Limbu to resume work on Monday.”

On the other hand, Tarani Raj Dahal, president of NAC Employee’ Association, said the meeting did not withdraw the agitation and Limbu would not be allowed to resume duty.

Dahal said that until the post of Chairman that has remained vacant after the suspension of Kansakar is filled, there are fears that the board may take a unilateral decision. “We can make the payment for aircraft maintenance until Jan. 10,” added Dahal. According to Dahal, the unions’ are scheduled to meet Minister for Tourism and Civil Aviation Sharat Singh Bhandari and Secretary Kishore

Thapa on Tuesday to press them to fill the Chairman’s post at the earliest.

The NAC trade unions had called an indefinite strike in NAC’s domestic operation two weeks ago, demanding that the government revoke its decision to allow Air Arabia to operate Kathmandu-Kuala Lumpur flights.

The unified trade union committee had also barred NAC’s top-level officials from carrying out their duties and demanded they lobby with the government to immediately begin the purchase process of new aircraft and end the ongoing dispute regarding the executive power of NAC.

Domestic air operators hike fuel surcharge

Airlines Operators’ Association of Nepal has decided to increase the fuel surcharge by Rs 60 to Rs 80 as per the flight distance

POST REPORT

KATHMANDU, DEC 27 -

Domestic airlines operators have increased the additional fuel surcharge, citing the reason of the recent hike in the Airborne Turbine Fuel (ATF) price. The new air fare adjusted with the surcharge will be effective from Sunday.

Nepal Oil Corporation (NOC) had increased the ATF price by Rs 5 per litre to Rs 80 on Dec. 6. Airlines Operators’ Association of Nepal (AOAN) has decided to increase the fuel surcharge by Rs 60 to Rs 80 as per the flight distance.

As per the decision of AOAN, the additional fuel surcharge for the short air distance—Bharatpur—has been increased by Rs 60 and for long distance—Dhangadhi—the surcharge has been increased by Rs 180. “We are compelled to hike the surcharge to adjust the air fare after the fuel price hike,” said Rupesh Joshi, marketing manager of Buddha Air and a member of AOAN. “If the fuel price goes down, we will also slash the surcharge.”

The surcharge for Pokhara has increased to Rs 440 from Rs 360. For Biratnagar, the surcharge has been fixed at Rs 610 with the hike by Rs 110. Similarly, Nepalgunj-bound passengers now will have to pay surcharge of Rs 770.

According to Binay Shakya, manager of Yeti Airlines, new surcharge rate for Dhandadhi flights has been set at Rs 1,020 (US$ 17). Earlier, domestic airlines operators used to charge Rs 840 (US$ 18) for this flight.

Likewise, for Janakpur, the charge has been increased by Rs 70. “We have increased US$ 2 for foreigners. Earlier, we used to charge US$ 5,” said Shakya. For the mountain flights, the additional fuel surcharge has been set at Rs 990. Earlier, the passengers used to pay Rs 815 surcharge.

In Feb. 2010 too, AOAN had increased the surcharge by Rs 60 to Rs 180. At that time, the surcharge for the minimum air distance Simara had been increased by Rs 60, while for the longer Nepalgunj flight Rs 180 had been increased.

Destination Surcharge Up by

Pokhara Rs 440 Rs 80

Biratnagar Rs 610 Rs 110

Bhairahawa Rs 540 Rs 95

Bhadrapur Rs 730 Rs 130

Janakpur Rs 390 Rs 70

Bharatpur Rs 340 Rs 60

Simara Rs 290 Rs 135

Dhangadhi Rs 1,020 Rs 180

Domestic aviation high, passenger movement up 13pc

Price war among airlines has benefited customers, encouraging more middle-income people to travel by air

SANGAM PRASAIN

KATHMANDU, DEC 25 -

Domestic airlines experienced a steep increase in passenger movement in the first nine months of 2010.

According to the statistics released by Tribhuvan International Airport (TIA), the number of air travellers rose 13 percent to 1,073,391 in the review period from 949,135 in the same period last year. There were 1,377,868 fliers in the whole of 2009.

There are eight domestic airlines and five helicopter services currently operating from Kathmandu.

While passenger movement grew 13 percent, domestic aircraft movement increased a nominal 2.09 percent in the period under review. Aircraft movement had seen a 19.72 percent surge in the first nine months of 2009 compared to the same period in 2008.

“A price war among airlines has benefited customers, encouraging more middle-income people to travel by air,” said Prajwol Thapa, marketing manager of Guna Airlines.

Moreover, higher tourist arrivals and greater activity by NGOs and INGOs around the country has resulted in an increase in the number of passengers for Nepal’s domestic airlines, Thapa added.

Almost all the domestic carriers saw their business taking off during the period. Buddha Air carried 421,310 passengers in the first nine months of 2010, up 5 percent from 402,931 last year.

Yeti Air carried 333,528 passengers, down 7.12 percent from 359,115 last year as its subsidiary Tara Air took over its short-haul routes. Tara Air, which started operations in June 2009, flew 64,630 passengers during the review period.

Agni Air’s passenger movement rose 25.58 percent to 138,150 from 110,005 last year. Guna Airlines, which started service in May 2009, was fourth with 68,803 passengers compared to 13,615 previously.

Nepal Airlines and Sita Air carried fewer passengers compared to last year. The number of travellers flying Nepal Airlines dropped 13.81 percent to 32,604. Sita Air carried 8,405 passengers against 16,298 previously.

Travel agents, airlines at odds

*
Travel agents fear that the move by airlines to fix the commission rate is a prelude to the introduction of the ‘transaction fee’ system

SANGAM PRASAIN

KATHMANDU, DEC 22 -

While airlines continue to call travel agents an integral part of their business, the agents are increasingly feeling they are not getting their due. The recent move by private carriers to fix the commission rates for travel agents has increased the distance between the two.

Buddha Air, Yeti Airlines, Guna Air and Agni Air have set the agent commission at its upper limit since Dec. 1. Airlines are considering fixing the commission at the upper limit of 12 percent for tickets sold in US dollars and 9 percent for tickets sold in local currency.

However, the commission on Buddha Air tickets has been fixed at 7 percent and on Yeti Airlines tickets at 11 percent. Earlier, travel agents pocketed a commission of 65 percent on tickets sold in US dollars and 15-20 percent on tickets sold in local currency. Although the commission had been set at 15-20 percent, travel agents were found to be raising their cut to as high as 55 percent when tickets were scarce.

Travel agents said that reducing the agency commission would not improve the airlines’ finance. “All the airlines do not have similar operational costs and markets, and the move to fix the commission is cartelling,” a travel agent said. Travellers and agencies fear that the standardised airfare policy would mean the end of competition among airlines regarding fares.

Although tourism associations have decided to adopt a “win-win situation” in response to the move, airlines said that they had been compelled to do so to stop uncontrolled overcharging by travel agents.

“We are discussing the proposal of travel agents regarding their concern on the cap on commissions, however, a decision is yet to be made,” said Prajwol Thapa, marketing manager of Guna Air.

A joint meeting of the Nepal Association of Tour Operators (NATO), the Trekking Agents Association of Nepal (TAAN) and the Nepal Association of Tour and Travel Agents (NATTA) recently decided to forward a proposal to create a win-win situation regarding commissions. However, they said that the airlines had not called them for a meeting yet.

These travel trade associations had requested the airlines to maintain the previous commission rate until December 2011 as changes in the commission and airfares would result in massive losses to tour and travel operators. “Travel agents are at loggerheads with airlines over the issue as the carriers have said that they would not change their decision,” said a travel agent.

Travel agents fear that the move by airlines to fix the commission rate is a prelude to the introduction of the “transaction fee” system where agents would charge their customers directly for services rendered and carriers would stop paying a commission altogether. While airlines claim that these are cost-cutting measures to help them get through the current economic situation, the agents are unhappy with their decision.

Recently, four private carriers had implemented uniform fares for flights between Kathmandu and Pokhara, Biratnagar, Bhairahawa, Nepalgunj, Bhadrapur and Dhangadhi. The fares have been adjusted to match Buddha Air’s tariff. The differences in ticket prices range from Rs 50 to Rs 300

Int’l air carriers in the pink, national flag carrier static

SANGAM PRASAIN

KATHMANDU, DEC 19 -
Thanks to increased air connectivity, Tribhuvan International Airport (TIA), the country’s only international airport, is witnessing an impressive growth both in tourist arrivals and aircraft movement.

TIA’s statistics show international passenger movement (arrival and departure) grew by 21 percent in the first nine months (January-September) of 2010. According to TIA’s Flight Permission Section, the airport saw movement of 1.71 million passengers during this period, up from 1.41 million during the corresponding period last year.

With more airlines starting their service to Kathmandu, international flight movements too have surged by 23 percent. In the first nine months this year, TIA saw 13,978 international flights compared to 11,329 during the corresponding period last year.

Bimlesh Lal Karna, chief of TIA’s Air Traffic Control said that the airport is handling more international flights these days, more than its average capacity. “The airport is handling as many as 50-60 international flights on some days,”

said Karna. The average capacity of the airport is 35-40 international flights. Now, 27 international airlines are operating their service in Nepal.

However, despite the increased flight frequency and passenger movement, the country’s national flag carrier—Nepal Airlines Corporation (NAC)—saw only a nine percent growth in these nine months. A total of 177,036 passengers traveled to and from the TIA on NAC flights.

The increased flight movement has only benefited the international airlines. In terms of passenger volume, Qatar Airways topped the chart with 215,117 passengers (a 21 percent increase) followed by Jet Airways and the NAC. Jet Airways’ passenger volume increased by 54 percent to 185,484 between January and September compared to 120,140 during the same period last year. Air Arabia and Etihad Airways were amongst the airlines that registered robust growth in terms of passenger movement in 2010. Air Arabia registered a 19 percent growth while Etihad Airways recorded a 40 percent growth in passenger movement.

However, three major international airlines—Gulf Air, Thai Airways and Indian Airlines—saw their passenger movement decline during this period compared to that of last year. Gulf Air carried 140,065 passengers, a decline of 17 percent.

Yet, increased flight movements have boosted the NAC’s revenue as it does the ground handing of all international airlines, The pressure on TIA to manage international and domestic flights is increasing.

According to TIA General Manager Dinesh Shrestha, the airport that had been designed to cater to only 1350 passengers per day is now catering to around 3,000 passengers daily on an average.

With TIA’s existing infrastructure and technology insufficient for managing the increased movement, international and domestic flights both are routinely getting delayed. A single aircraft needs at least 45 minutes to land and take off. However, both international and domestic flights are now delayed by over an hour these days. “It has seriously dented the image of TIA and its service delivery,” said a senior TIA official. “More traffic congestion at the airport has also raised the issue of aviation security.”

With surge in the number of international airlines, Civil Aviation Authority

of Nepal (CAAN) is now planning to run the airport round the clock. With

4-5 more international airlines planning to start their service to Nepal, the

CAAN has no option but to make TIA operational for 24 hours.

As of now, NAC, Dragon Air, Gulf Airways and Qatar Airways have night operation. “Given the difficult geographical terrain and inadequate airport infrastructure international airlines are reluctant to fly after 6 pm,” said Karna.

With Nepal celebrating 2011 as Nepal Tourism Year, there will be further increase in passenger movement at the TIA. Tourism officials are targeting at least 700,000 tourists via air in 2010. It has raised the serious question whether the TIA can manage such a flow of tourists in 2011, given the state of its infrastructure. However, Shrestha said that upscaling work is being carried out to manage the increased volume of air traffic.



INT’L AIRLINES PASSENGERS MOVEMENT (JAN-SEP)

Year 2010 Change (in percent)

Qatar Airways 215,117 21.75

Jet Airways 185,484 54.38

Nepal Airlines 177,036 9.04

Gulf Air 140,065 -17.80

Thai Airways 126,091 -6.15

Indian Airlines 123,084 -14.03

Air Arabia 109,780 19.43

Jet Lite 83,885 7.78

Etihad Airways 78,398 40.37

Biman Bangladesh 76,518 51.21

A bumper harvest?

SANGAM PRASAIN
DEC 18 - First, the good news. This year, the production of our major food crops—rice and maize—grew by a whopping 11 percent, overcoming the food shortfall we had faced due to below-average monsoons. This growth comes on the back of a 4.33 percent fall in agricultural output last year, and economists agree that the rise in output means the Nepali economy will certainly grow this year.

Now, the bad news. This increase in output, and the subsequent food self-sufficiency, is not thanks to any government support. Instead, an above-average monsoon resulted in the growth. Government support to agriculture—in the form of subsidies and irrigational projects—may have risen, but only marginally. And farmers continue to move out of the sector because of low returns, high debts, and low productivity.

Because agriculture contributes nearly 32 percent to our Gross Domestic Product (GDP), the current rise in output of food crops will definitely have an impact on Nepal’s growth, giving rise to hopes that the country can achieve the 4.5 percent GDP growth rate projected for this year. However, the state’s focus has slowly been shifting away from agriculture, and this is highlighted by the meager increase in budgetary support to the sector: From 2.4 percent of the total budget in 2008-09, it increased to 3.1 percent in 2010-11. “The agricultural sector is seriously disadvantaged due to a lack of government attention,” says Hari Dahal, spokesperson at the Ministry of Agriculture and Cooperatives.

How did Nepal go from being one of the highest producers of rice in the region in the early 60s to becoming a net importer of food grains today? The answer, most experts agree, lies in the neglect the state showed the sector after donors stopped funding agriculture in the mid 90s. “Agriculture has been neglected for the last 10 years after donor agencies pulled out. The government, instead of increasing its support, withdrew its fertiliser subsidies in 1996-97,” says Devendra Chapagain, former member of the National Planning Commission.

The withdrawal of subsidies came as the state started adopting more neo-liberal policies. It opened the doors to private players for importing fertilisers. “Consumption of fertilisers grew heavily when the private sectors started import. However, these imports lasted only for a short time as the Indian government started a heavy subsidy programme for its farmers,” says Dahal, adding that the price of imported fertilisers rose heavily forcing private players to stop their imports. At the same time, government subsidy to shallow tubewells also stopped.

The government’s withdrawal of state support meant that agriculture today is wholly dependent on the state of the monsoons. “Agricultural growth depends according to nature. If it rains, we have a good harvest. If it doesn’t, we have a bad year,” says Chapagain.

The rise in production of paddy and maize this year—courtesy good rains—means the country will produce an additional 436,000 and 200,000 tonnes of the two grains respectively. This increase comes on the back of a shortfall of 316,465 tonnes of grains last year, because of which at least 1.6 million people had to face a severe food shortage. As major food grain production also has a direct impact on the country’s GDP, planners and analysts say that the targeted 4.5 percent economic growth could be realised this year because of the increased production, despite the other economic indicators not doing too well. “Increased food grain production will raise the country’s GDP by 0.5 percent at least,” says economist Bishwamber Pyakurel.

However, this rise in production is a sweetener only for the short term. For, more and more farmers are leaving the sector for good as they suffer a vicious cycle of low returns on production, and rising debts and following bankruptcy. “Rice farmers in Nepal have never been adequately compensated. Low returns from the sector have forced the younger generation to abandon the profession altogether,” says Dahal.

Though the government initiated the distribution of fertilisers at subsidised rates from last year, the 81,598 tonnes of fertilisers distributed only fulfill the requirement of 5 percent of total demand. The state also distributed 826 tonnes of improved seeds, and allocated Rs. 3 billion to agricultural subsidies in the form of lower fertiliser prices and small irrigation

projects. Conversion to hybrid, higher-yielding, variety of seeds is also very slow, and like last year’s protests by Tarai maize farmers showed, not all hybrid seeds are achieving the results promised.

The state has also not delivered irrigation projects as required by the sector. Of the total cultivated area in Nepal, only 15 percent of the land can be irrigated all year round. But irrigation projects are themselves underutilised. Only about 1.1 million hectares of the total of about 3 million hectares of arable land have irrigation facilities. For example, the Koshi Pump Irrigation Project has a capacity to irrigate 4,100 hectares of land, but its coverage is limited to only 40 percent of that capacity.

A simple analysis of the numbers of paddy, which is our major crop, puts this into perspective. While production and yield has risen, the area under cultivation has remained nearly the same. For example, in 1999-2000, the area under paddy cultivation was 1.55 million hectares, which actually declined to 1.43 million hectares in 2006-07 before rising to 1.55 million hectares again in 2008-09. Analysts point towards the massive decline in the expenditure on the agricultural sector since the 1980s as being a major reason why agriculture today is suffering this state of dichotomy. From as much as a third of the expenditure being spent on agriculture in the 1980s, the share fell to as little as 5 percent in the 1990s. This trend is continuing even now, revealing a drastic shift in economic policy.

Agriculture still employs 66 percent of the total workforce in Nepal, which means that the livelihood of two-thirds of Nepalis depends on the sector. A shift in the economic outlook of the state towards manufacturing and services in the early 90s meant that the sector continued to witness neglect, and inevitably, decline. Though the increase in food production this year comes as a glimmer of hope, most analysts agree that not enough is being done to sustain the sector, which continues to depend on one single source of irrigation—the monsoons—till now. As witnessed last year, a drop in rainfall led to a severe food shortage, and although that has been corrected, what will Nepal do if a season of drought comes up?

Improve air safety: ICAO to govt

SANGAM PRASAIN

KATHMANDU, DEC 18 -

In view of increasing accidents in air transport in Nepal, the International Civil Aviation Organization (ICAO) has urged the Government of Nepal to adopt a deliberate approach for air safety improvement.

ICAO’s Asia Pacific Region Regional Director Ahmad Mukhtar Awan on Friday met Prime Minister Madhav Nepal and urged him to take appropriate measures to ensure aviation safety, said Rajan Bhattarai, the PM’s foreign affairs advisor.

In the meeting, Awan said Nepal needs to focus on expanding infrastructure at the Tribhuvan International Airport (TIA) in view of the increasing air traffic. “We are ready to support the Government of Nepal in this regard,” Bhattarai quoted Awan as saying. The Global Aviation Safety Plan (GASP) articulates ICAO’s strategy to guide prioritization and implementation of its global safety initiatives. Between 2000 and 2009, the total number of fatal accidents on commercial scheduled flights dropped by 50 percent and the corresponding number of fatalities by 31 percent.

According to ICAO, the overall level of safety in international civil aviation is remarkable, with a global accident rate of approximately four accidents per million departures.

The ICAO says that with the anticipated increase in traffic volume throughout this decade , a steady accident rate will translate into a greater number of accidents. Currently, two out of seven ICAO regions have an accident rate that is twice the world average. In the context of Nepal, within four month the country’s aviation sector has witnessed three major fatalities and a number of minor mishaps. Three major air accidents in four months have claimed 38 lives.

“We talked about the immediate need to ensure well-coordinated relations between the industry and its regulator,” Awan told the media.

The ICAO forecast reveals worldwide air traffic to grow at the rate of 6.4 percent this year, 4.7 percent in 2011 and 4.9 percent in 2012. Traffic for Asia Pacific airlines should grow considerably faster than the global aviation pace at rates 10.8, 7.8 and 7.75 percent for the same period. In the context of Nepal, international passenger movement recorded an 11 percent and domestic passenger movement a 33 percent increase in 2009 as compared to 2008.

Lawmakers demand transparency in NOC

SANGAM PRASAIN

KATHMANDU, DEC 17 -

Lawmakers on Thursday said the government’s subsidy policy on LP gas was not in favour of consumers and is only benefiting industries.

The government refunds the Value Added Tax (VAT) levied on LP gas purchased for industrial purpose only. Lawmakers said that the consumers, who use a maximum of two-three cylinders per month, should not be compelled to

bear the burden for the facility given to industries.

The government collects Rs 207 per cylinder as tax, of which Rs 149 is collected as VAT. The government had included LP gas in the list of daily essential items.

“VAT levied on LP gas purchased for industrial purpose is refundable, but the government’s opposite tax policy is burdening poor consumers,” said CPN-UML lawmaker Rabindra Adhikari, while discussing the price hike on petroleum products at the Parliament’s Public Account Committee (PAC).

The PAC had summoned Minister for Commerce and Supplies Rajendra and officials from Nepal Oil Corporation (NOC) to justify the recent gasoline price hike.

Minister Mahato also admitted that the government subsidy policy was opposite. “The government should introduce subsidy on LP gas for the consumers as in India,” said Mahato.

He added that the ministry is holding discussions with the finance ministry on the issue. The waiver in VAT will drop the gas price by at least Rs 40 per cylinder, he said. Of the total imported gas, 30 percent is consumed by industries. The country consumes one million gas cylinders every month.

Amid pressure from the

political parties, student

unions and consumer rights activists to revise the petroleum

products price hike, Mahato said the price revision is possible only if the government excuses the tax levied under the head of road maintenance and upgrading or scrap the VAT.

Petroleum products are the government’s largest revenue generating commodities. Last fiscal year, NOC paid Rs 12.41 billion revenue. The country consumes gasoline worth Rs 60 billion every year.

During the meeting, lawmakers said corruption, commissions and irregularities were the reasons behind NOC’s ballooning losses every year. “Rampant irregularities in NOC have compelled consumers to suffer from price hike,” said Adhikari.

Dhan Raj Gurung, lawmaker of Nepali Congress, stressed on the need for forming a separate independent board that would make the fuel prices more transparent and discuss all the alternative measures for price revision and adjustment. “Although, the state-owned oil monopoly is being cash-strapped every passing years, its officials are found to be well-off,” said Keshav Nepal, the UCPN-Maoist lawmaker.

Nepal added that an immediate measure should be introduced to make the corporation more transparent and punish the officials involved in corruption and commissions.

Purushottam Ojha, secretary at the ministry of supplies and the chairman of the NOC, said the government should end the monopoly of NOC in fuel distribution and involve the private sector in this business.

Ojha added that NOC is in the process of developing oil pipeline that will end the rampant fuel adulteration and high transportation cost. Although the oil pipeline project was initiated long time ago, change in its modality has frequently delayed the construction.

“NOC delegations to finalise the oil pipeline modality are departing to India in January,” Ojha said.

Tara Air plane with 22 people aboard missing

SANGAM PRASAIN
KATHMANDU, DEC 15 - An aircraft owned by Tara air has gone missing after it took off from Lamidanda airport in Khotang district on Wednesday.

The 9N-AFX Twin-Otter plane with 22 people onboard—three crew members, 19 passengers—left the airport for the Capital at 3.10 this afternoon, Khotang district DSP Tek Bahadur Tamang informed. One of the passengers is a foreigner.

Most of the passengers were returning from a pilgrimage to famous Hindu shrine of Halesimahadev—temple of lord shiva.

Captain AR Shakya, his assistant Satindra Shrestha, and airhostess AS Gurung, were among the crew members.

The missing passengers have been identified as Ji Sherpa, Ke Sherpa, S Tamang, A Tamang, RT Tamang, TG Lama, KW Lama, P Tamang, KN Lama, ZD Sherpa, LW Sherpa, SB Lama, T Sherpa, Miss TY Sherpa, PW Tamang, TB Tamang, TW Sherpa and a foreigner, whose nationality has not been ascertained yet.

The aircraft lost contact with the air traffic control tower, five minutes after the take-off. DSP Tamang said efforts are underway to locate the missing plane.

According to TIA officials, a flight from Lamidanda to Kathmandu takes around 35 minutes.

Meanwhile, Nepal Army (NA) spokesperson Ramindra Chhetri though a NA plane is ready to take off for the rescue, it has not left due to unfavourable weather.

“A night-vision aircraft is all ready but it has not taken off owing to low visibility,” said Chhetri.

Famous for its rugged and mountainous terrain, Nepal has dubious safety record when it comes to internal aviation.

Less than two months ago, a chopper bound for Mt. Amadablam crashed at the base camp of the mountain in Solukhumbu district. And five months ago, an Agni Air Dornier en route to the Everest region from the capital crashed in Makawanpur, killing everyone onboard.

Aircraft missing with 22 on board

SANGAM PRASAIN
KATHMANDU, DEC 15 -
A Twin Otter aircraft belonging to Tara Air went missing on Wednesday with 22 people on board. The Rescue Coordination Centre at the Tribhuvan International Airport (TIA) suspected that the aircraft crashed in Kunta Devi Village Development Committee in Okhaldhunga district.

Spokesperson at the Ministry of Tourism and Civil Aviation Laxman Prasad Bhattarai said they are yet to confirm if the aircraft that took off from Lamidanda in Khotang district to Kathmandu crashed. According to him, helicopters have been sent to look for the missing aircraft. However, the search mission was cancelled late in the evening due to heavy clouds.

According to the Post’s Khotang correspondent, Deputy Superintendent of Police Tek Bahadur Tamang said the plane did not land in any airport nearby.

The aircraft took off at 03: 08 p.m. and was scheduled to land in Kathmandu at 8: 40 p.m.

Along with Captain Anup Raj Shakya, Co-pilot Sachindra Shrestha and Air Hostess Sudiksha Gurung, there were 18 Bhutanese and one foreigner in the flight, the airline said. The Bhutanese were in Nepal to take part in the SAARC Trade Fair in Kathmandu.

Locals of Okhaldhunga said they heard a loud sound across Musunga Khola. “Police and Army personnel have been sent to comb the area,” chief of the Air Traffic Control (ATC) at the TIA, Kamlesh Lal Karna, quoted the CDO of Okhaldhunga as saying.

ATC officer at the Kathmandu airport, Bhes Raj Adhikari, said the pilot had contacted the tower at around 03: 13 pm as part of its regular reporting and no technical difficulties had been reported then. While the weather in the sector was fair, the ATC declared an emergency when the flight failed to establish contact for almost 30 minutes.

General Manager at the TIA Dinesh Shrestha said the search mission will continue on Thursday morning.

Lawmakers demand transparency in NOC

SANGAM PRASAIN
KATHMANDU, DEC 17 -

Lawmakers on Thursday said the government’s subsidy policy on LP gas was not in favour of consumers and is only benefiting industries.

The government refunds the Value Added Tax (VAT) levied on LP gas purchased for industrial purpose only. Lawmakers said that the consumers, who use a maximum of two-three cylinders per month, should not be compelled to

bear the burden for the facility given to industries.

The government collects Rs 207 per cylinder as tax, of which Rs 149 is collected as VAT. The government had included LP gas in the list of daily essential items.

“VAT levied on LP gas purchased for industrial purpose is refundable, but the government’s opposite tax policy is burdening poor consumers,” said CPN-UML lawmaker Rabindra Adhikari, while discussing the price hike on petroleum products at the Parliament’s Public Account Committee (PAC).

The PAC had summoned Minister for Commerce and Supplies Rajendra and officials from Nepal Oil Corporation (NOC) to justify the recent gasoline price hike.

Minister Mahato also admitted that the government subsidy policy was opposite. “The government should introduce subsidy on LP gas for the consumers as in India,” said Mahato.

He added that the ministry is holding discussions with the finance ministry on the issue. The waiver in VAT will drop the gas price by at least Rs 40 per cylinder, he said. Of the total imported gas, 30 percent is consumed by industries. The country consumes one million gas cylinders every month.

Amid pressure from the

political parties, student

unions and consumer rights activists to revise the petroleum

products price hike, Mahato said the price revision is possible only if the government excuses the tax levied under the head of road maintenance and upgrading or scrap the VAT.

Petroleum products are the government’s largest revenue generating commodities. Last fiscal year, NOC paid Rs 12.41 billion revenue. The country consumes gasoline worth Rs 60 billion every year.

During the meeting, lawmakers said corruption, commissions and irregularities were the reasons behind NOC’s ballooning losses every year. “Rampant irregularities in NOC have compelled consumers to suffer from price hike,” said Adhikari.

Dhan Raj Gurung, lawmaker of Nepali Congress, stressed on the need for forming a separate independent board that would make the fuel prices more transparent and discuss all the alternative measures for price revision and adjustment. “Although, the state-owned oil monopoly is being cash-strapped every passing years, its officials are found to be well-off,” said Keshav Nepal, the UCPN-Maoist lawmaker.

Nepal added that an immediate measure should be introduced to make the corporation more transparent and punish the officials involved in corruption and commissions.

Purushottam Ojha, secretary at the ministry of supplies and the chairman of the NOC, said the government should end the monopoly of NOC in fuel distribution and involve the private sector in this business.

Ojha added that NOC is in the process of developing oil pipeline that will end the rampant fuel adulteration and high transportation cost. Although the oil pipeline project was initiated long time ago, change in its modality has frequently delayed the construction.

“NOC delegations to finalise the oil pipeline modality are departing to India in January,” Ojha said.


What makes petroleum products high in Nepal


Petrol Diesel Kerosene LP gas
Price Rs 52.13 Rs 54.48 Rs 52.49 Rs1077.39
Tax Rs 29.87 Rs 12.42 Rs 2.04 Rs 207
Interest Rs 0.63 Rs 0.52 Rs 0.43 Rs 9.25
Transportation Rs 1.80 Rs 1.80 Rs 1.80 Rs 7.10
Technical loss Rs 1.25 Rs 0.93 Rs 0.85 ------
Dealers commis Rs 3.23 Rs 2.39 Rs 2.75 Rs 213.07

17 Bhutanese out of 22 dead

Tickets booked under Nepali names to ‘evade tax’

SANGAM PRASAIN

KATHMANDU, DEC 17 -

Out of 19 deceased passengers on board the ill-fated Tara Air aircraft, 17 are Bhutanese citizens.

According to Thamel-based Potala Guest House in the Capital, 14 of the deceased Bhutanese were living in the guest house since Dec. 11 and the remaining in Boudha.

One of the passengers was of Tibetan-origin holding US passport. However, identity of one passenger has not been established yet. In the group of 18 Bhutanese, who had planned a pilgrim trip to Khotang’s Halesi, Kin Lay Namghyel cancelled his trip at the

last moment. The victims had booked air tickets from Travel Lights Agency in Putalisadak. Kamala Gurung, managing director of the travel agency, said that a Nepali man came to her office and booked 18 tickets.

“I knew about the tragedy when a Bhutanese came to my office and inquired about the missing aircraft,” Gurung said adding that she then immediately informed Tara Air about

their identities. Gurung said that Nepali travelers do not need any document and they get their ticket booked by Nepali names. Police on Thursday took Gurung under control for an inquiry. Ramesh Kharel, Chief of Hanumandhoka Metropolitan Police Range, said the issue will be discussed with lawyers. “If it is a case of tax evasion action will be taken as per the law,” he said.

Kishore Thapa, Secretary of the Ministry of Tourism and Civil Aviation (MoTCA), said the issue has become serious. MoTCA is forming a committee to probe the duplication of nationality and the tragedy on Friday, he said. “The bodies of deceased Bhutanese will be sent to Bhutan on Friday.” Meanwhile, Binod Giri, aviation safety chief at Civil Aviation Authority, said that authorities have not established the exact reason of the crash. However, government officials in the accident site said the incident occurred after the plane’s right wing clipped the edge of a mountain.

Deceased Bhutanese

Tshewang Rinzin

Dema

Karma

Sandrup

Sangay

Thinley Rinchen

Phub Gyalmo

Kezang Wangmo

Phub Pem

Kuenzang Dorji

Lhazin Wangmo

Sangay Bida

Kelzang

Thering Yanki

Pema Wangmo

Tshering Wangmo

Dorji Bidha

NAC unions warn of stir

SANGAM PRASAIN

KATHMANDU, DEC 15 -

First, the Tourism Ministry decided to allow Air Arabia to operate flights in the Kathmandu-Kuala Lumpur sector under the Fifth Freedom Rights. Then came the parliamentary committee’s directive to scrap that decision. Now, Nepal Airline Corporation (NAC)’s unions have threatened that they will bring Tribhuwan International Airport (TIA) domestic operations to a grinding halt on Wednesday.

The NAC unions’ move comes two days after the parliament’s International Relation and Human Right Committee directed the tourism ministry to revoke the Fifth Freedom Rights given to Air Arabia.

Though the unions have presented four issues to justify their announcement to halt domestic airline operations the move, according to sources, is to pressurise the ministry to honour the parliamentary committee’s directive. “Our decision to halt domestic air operations at the TIA is meant to press the government to resolve the issues that are hampering NAC’s management and its future plans,” said Rajendra Regmi, president of National Employees’ Union at NAC.

The unions have also demanded that the government initiate the aircraft purchase process at the earliest and resolve the dispute between its executive chairman and managing director.

The tourism ministry, despite the committee’s directive, is yet to revoke its decision of granting Fifth Freedom Rights to Air Arabia. However, Tourism Secretary Kishore Thapa said the ministry has received the directive from the committee on Tuesday and also initiated the process to revoke the decision.

As per rules, it is the Civil Aviation Authority of Nepal (CAAN) that can cancel the privilege given to Air Arabia after getting orders from the tourism ministry. However, till Tuesday evening, the CAAN hasn’t received any such order from the ministry, said a CAAN source.

Giving a new twist to the issue, on Tuesday Abdul Wahab Mohamed K Al Roomi, director general of the Department of Civil Aviation, Sharjah, sent a letter to Tourism Minister Sharat Singh Bhandari, seeking his intervention to ensure smooth operation for the approved flights. “We have observed that certain sections of the media are highlighting a possible disruption of Air Arabia’s flight operation. However, given our excellent bilateral relationship between two countries and as per the Air Service Agreement, we hereby request your kind interference of your respectful authority to ensure smooth operation of the approved flights,” read Roomi’s letter. NAC is dead against allowing Air Arabia to operate Kathmandu-Kuala Lumpur sector as it would end the former’s monopoly in this sector. Currently, Kathmandu-Kuala Lumpur sector is the main lucrative route for the national flag carrier.

With the continuous surge in the number of Malaysia-bound migrant workers, the NAC doesn’t want any competitor in this sector. Air Arabia’s agent in Nepal argues that NAC hasn’t been able to cater to all passengers and there is space for one more airline in this sector.

Given NAC’s state of affairs, Air Arabia’s presence in the sector would surely hurt NAC’s market share. Further, Air Arabia has fixed the airfare much cheaper than that of NAC. As of now, Air Arabia has already sold around 600 tickets for Kathmandu-Kuala Lumpur flights. “We’ve not received any letter from the government stating that the permission given to us has been revoked,” said Rabi Singh of City Express, General Sales Agent of Air Arabia. “Hence, our flights will run as per schedule.”

PM denies meddling

KATHMANDU: Prime Minister Madhav Kumar Nepal on Tuesday said he did not exert any pressure on the Commission for the Investigation of Abuse of Authority (CIAA) regarding the plane purchase deal of Nepal Airlines Corporation (NAC). Stating that he did not try to influence the purchase deal by calling the CIAA secretary, the prime minister said, “My only concern was how the aircraft could be purchased on time and in a transparent manner.” The Public Accounts Committee had summoned the prime minister on his alleged pressure on the CIAA to slow down its probe into NAC’s aircraft purchase deal. (PR)

MoTCA to rescind, Air Arabia m’sia route

The ministry will issue the notice shortly to the airline, mentioning that the decision taken by the constitutional body cannot be ignored

SANGAM PRASAIN

KATHMANDU, DEC 14 -

The Ministry of Tourism and Civil Aviation (MoTCA) will issue a ‘notice of revocation’ to Sharjah-based Air Arabia that was allowed to operate flights in the Kathmandu-Kuala Lumpur airspace by the ministry on Dec. 2 under the Fifth Freedom Traffic Rights.

A day after the Parliament’s International Relation and Human Rights Committee directed MoTCA to revoke the decision, ministry secretary Kishore Thapa said it will issue the notice shortly to the airline, mentioning that the decision taken by the constitutional body cannot be ignored.

“We were waiting for the letter from the committee regarding this decision. The letter will be forwarded to the airline as soon as we receive the directive,” said Thapa.

Air Arabia was set to start service in this sector from Dec. 16. However, following pressure from the Nepal Airlines Corporation (NAC) and lawmakers, the committee took the decision to this effect. It said its decision was based on the ‘violation of Nepal Airlines Act-1962’. “We (the MoTCA) cannot overrule the decision made by the constitutional body. However, we will not be liable alone for any possible problems in this issue. The government will also have to suffer if any problem arises,” added Thapa.

The committee had also directed the ministry to amend the existing Air Service Agreement (ASA) to safeguard the country’s interests. Secretary Thapa said such a legal process needs an extensive discussion and the ministry will discuss the matter with the Ministry of Foreign Affairs and the Ministry of Home Affairs.

Even if the committee had not revoked the ministry’s decision, NAC still had another alternative to stop Air Arabia from operating. An international airline is required to sign an agreement with NAC to land at the Tribhuvan International Airport.

An agent of Air Arabia in Nepal said the government overlooked the woes of Nepali passengers who are compelled to fly to Malaysia through India and Bangladesh in the absence of NAC aircraft. “Permission to Air Arabia operation could have made things easier for those Nepali migrant workers.”

On Sunday, the committee meeting chaired by Padma Lal Bishwokarma concluded that the ministry violated the NAC act by allowing Air Arabia to operate Kathmandu-Kuala Lumpur flights. The committee said that it would hurt the national carrier’s business in the most lucrative sector.

The Kathmandu-Kuala Lumpur sector has emerged as the one of the most lucrative sectors for NAC over the last two years. NAC earns Rs. 8 million from a single flight, thanks largely to Nepali migrant workers.

With the continuous surge in the number of Malaysia-bound migrant workers, the NAC does not want to share this sector with other airlines. Air Arabia had also targeted migrant worker passengers.

According to the ministry, the decision was taken considering the lack of sufficient flights in this sector. The ministry was of the view that allowing Air Arabia in this route would bring in more tourists during Nepal Tourism Year-2011.

Reduced import raises, LP gas shortage fears

SANGAM PRASAIN

KATHMANDU, DEC 14 -

A number of gas bottling companies are facing a shortage of LP gas as Nepal Oil Corporation (NOC) has been receiving less than half of its quota from Indian Oil Corporation (IOC).

The bottlers said that gas shipments from Haldiya had resumed after a week while imports from Barauni had been slashed by 50 percent.

The Nepal LP Gas Industry Association (NLPGIA), the umbrella organization of

bottlers, said that NOC

had slashed imports by over 40 percent.

“There is little in stock after NOC slashed the regular quota, however, if the corporation does not fulfil the regular quota, a gas shortage is likely to cripple the country soon,” said Suresh Prajapati, general secretary of the NLPGIA.

The association said that although bottlers did not have adequate gas to supply to the market, they were relieved with the recent strike called against the price hike of petroleum products, as the dealers did not supply gas in the market.

According to the association, IOC has started forwarding the price of LP gas fortnightly as per the international price that has compelled NOC to cut imports as the price of gas in the international market was surging everyday and NOC was unable to make payments.

For the last 10 days, bottlers have been getting about 5 bullets (1,250 cylinders) from Barauni. The reduction in imports has forced three bottling companies to shut down, Prajapati said.

Gas sellers said that last month they received only 9,000 tons. The country’s monthly requirement of LP gas is 12,000 to 13,000 tons in the summer while in the winter, demand crosses 18,000 tons. Increased load-shedding has also push up demand in the winter.

“Now, the winter has started and consumption of gas will climb, however, if the issue is not sorted out, the country is likely to face a gas shortage soon,” Prajapati said. Until Oct. 13, gas bottlers have received only 50-55 percent of the regular supply.

However, NOC said that there would be no shortage of gas. “Although, shipments were down slightly in the last month and the first half of this month, the situation is improving,” said NOC spokesperson Mukunda Dhungel.

Dhungel said that trucks are being loaded and imports would ease within three-four days.

Meanwhile, the Gas Dealers Federation Nepal said that they have planned to continue a phase-wise agitation against the price hike on gas. “Our meeting scheduled for Wednesday will decide the next phase of the protest if the government does not heed to the demand to roll back prices,” said president Gyaneshwor Aryal. The dealers did not sell gas on Dec. 12.

Tourist arrivals up, expenditure down

POST REPORT
KATHAMANDU, DEC 13 -

The good news is that the country is witnessing a significant rise in tourist arrivals. The bad news is, foreign exchange earning from travel trade is declining.

During the first three months of the current fiscal year, foreign tourist expenditure plunged by 33.4 percent to Rs 4.72 billion from Rs 7.09 billion during the same period last year. The country saw the number of tourists increase by 24.3 percent, 20.6 percent and 12 percent in August, September and October, respectively, according to the Ministry of Tourism and Civil Aviation. While analysing the annual income figures, a meagre

growth of 0.63 percent was recorded in earnings from foreign tourists

in FY 2009-10. The income in

2009-10 stood at Rs 28.13 billion, whereas it was Rs 27.95 billion in the previous year.

The figure which includes the income from tourists every month in its report on macro-economic situation of the country has surprised the Nepal Rastra Bank (NRB) also.

“We are surprised at the figure that has come at a time when the country is receiving an increasing number of tourists,” said Yubaraj Khatiwada, governor of NRB. It is disappointing for the central bank which has been working hard to reduce the Balance of Payment (BoP) deficit. The BoP deficit has gone up in recent months against the expectation of the central bank. The BoP deficit rose to Rs 6.8 billion as of mid-October from around

Rs 4.36 billon as of mid-September. The governor was not sure

whether it was due to the shortened length of stay of tourists or

the country’s failure to receive high spending tourists.

An NRB official also suspected that the companies involved

in foreign exchange business

might not given the correct data on income from tourists. “They may have classified the income from tourists in other categories while reporting to the central bank,” said a senior NRB official.

For Ashok Pokharel, president of Nepal Association of Tour Operator, the figure is not surprising. “Low income from tourists is a result of the flawed policy of those who are launching promotional activities. “There is no component of earning in the promotion of Nepal Tourism Year-2011,” he said. “The promotional activities are just focused

on how to achieve the target of bringing one million tourists during the tourism year.”

He stressed on the need for programmes that would lengthen the stay of tourists, encourage them to spend more and attract high end tourists. Big hotels are, however, not feeling hit. “Our income has grown with the increased charge and the trend of their stay in the country has remained the same,” said Bharat Joshi, sales and marketing manager of Hotel Yak and Yeti.

The figure presented in the Economic Survey-2010 also gives a glimpse of why income from

tourists is witnessing a decline. The stay of tourists and their per day expenditure both have gone down as of mid-January 2010 as compared to mid-January 2009, according

to survey. The length of stay went down to 11.6 days from 11.78 days and the per day expenditure fell to US$ 36.88 from US$ 48.68.

The size of the income from tourists as compared to the gross domestic product also went down to 2.4 percent in FY 2009-10 from 2.8 percent in the previous year, according to the report.

MoTCA told to nix Air Arabia’s M’asia flights

SANGAM PRASAIN

KATHAMNDU, DEC 13 - The parliament’s International Relation and Human Rights Committee on Sunday directed the Ministry of Tourism and Civil Aviation (MoTCA) to revoke its decision of awarding the Kathmandu-Kuala Lumpur sector to Sharjah-based Air Arabia under the fifth freedom rights. With this decision, Air Arabia’s plan to start the Sharjah-Kathmandu-Kuala Lumpur sector has suffered a setback.

The committee’s decision comes amid pressure from Nepal Airlines Corporation (NAC) and lawmakers.

MoTCA on Dec. 2 had allowed Air Arabia to operate six flights per week in the Kathmandu-Kuala Lumpur sector under the fifth freedom rights. The fifth freedom rights allow an airline to carry passengers from its own country to another country through a third country.

NAC Act-1962 has provisioned that the government should get the consent of the NAC before finalising, renewing and amending Air Service Agreement (ASA) with any country, said the committee.

“We came to the conclusion that the ministry violated the act by allowing Air Arabia to operate the Kathmandu-Kuala Lumpur flights under the fifth freedom rights without the consent of NAC,” said Padma Lal Bishwokarma, chairman of the committee.

The Committee also directed the ministry to amend the existing ASA to safeguard the country’s interests. “The ASA should be amended to ensure that the government of Nepal has its own reservation rights on any lucrative air points

that are not transferable to other country’s airlines under the Fifth Freedom Traffic Rights,” said the committee. It also directed the ministry to find other alternative measures to resolve the issue.

The issue of Air Arabia started after UAE’s Department of Civil Aviation wrote a letter on Sept. 28 to the MoTCA seeking its consent to give Kathmandu-Kuala Lumpur- Kathmandu sector to Air Arabia under the fifth freedom rights. UAE’s General Civil Aviation Authority (CAAN) forwarded a letter to the Civil Aviation Authority of Nepal on the same issue on Nov. 23. MoTCA made the decision to grant this route to Air Arabia on Dec. 2.

However, the NAC opposed the ministry’s decision saying it would hurt its business in the most lucrative sector. The Kathmandu-Kuala Lumpur sector has emerged as the one of the most lucrative sectors for NAC over the last two years. NAC earns Rs. 8 million from a single flight, thanks largely to Nepali migrant workers.

With the continuous surge in the number of Malaysia-bound migrant workers, the NAC doesn’t want to share this sector with other airlines. Air Arabia had also targeted migrant worker passengers.

Air Arabia was set to start service in this sector from Dec. 16. The airline had begun selling tickets through its two official agents in Kathmandu.

Despite the committee’s decision, the ministry and the CAAN are adamant that they have not done anything wrong. They had claimed that their decision was based on the weak performance of NAC that currently has only one Boeing.

According to the ministry, the decision was taken considering the lack of sufficient flights in this sector. The ministry was of the view that allowing Air Arabia in this route would bring in more tourists during Nepal Tourism Year-2011.

Tourism Minister Sharat Singh Bhandari defended the ministry’s decision in the committee’s meeting on Sunday.

“We took this decision to better air connectivity between Nepal and Malaysia considering the NAC’s present status and Nepal Tourism Year 2011,” said Bhandari. He added that if Air Arabia is not allowed the permission under the fifth freedom rights, it would be a violation of ASA.

Pressure to roll back hike mounts

* Minister, NOC GM say not possible

SANGAM PRASAIN

KATHMANDU, DEC 09 -
A hike in prices of petroleum products has always been a sensitive issue. Like in the past, the recent hike by Nepal Oil Corporation (NOC) has invited criticism from all quarters. Political parties, student unions, consumer forums and entrepreneurs dealing in petroleum products are not very comfortable with the recent price hike.

Pressure is mounting on NOC to review the hike. A meeting of Finance and Labour Committee of the Parliament on Thursday asked the state-owned oil monopoly to rethink the price hike.

The main opposition, UCPN (Maoist), has even threatened to launch street protests if the government doesn’t roll back the hike. Rastriya Prajatantra Party (Nepal) picketed the NOC and padlocked its office on Wednesday.

Gas Dealers’ Federation Nepal has announced that it would halt the sales and supply of LPG on Sunday.

NOC had raised the prices of all major petroleum products on Monday, which made petrol, diesel and kerosene dearer by Rs 3 each and liquefied petroleum gas (LPG) by Rs 75 per cylinder (weighing 14.2 kgs).

The Finance Committee’s meeting directed the NOC to resolve the price hike issue through all alternative measures. The lawmakers criticised the NOC’s act of justifying the price hike by showing massive losses every time rather than reforming the institution.

Commerce and Supplies Minister Rajendra Mahato and NOC General Manager Digamber Jha have remained firm against the price hike. Mahato said the gasoline prices were increased in line with the international market and said there will be no roll back. Jha, at the Finance Committee meeting on Thursday, said there were no alternatives to increasing the fuel prices to narrow down the existing loss and ensure smooth supply.

With the Indian Oil Corporation (IOC), the sole Indian supplier of gasoline to Nepal, increasing export rates and the new budget doubling road maintenance fee on petrol and diesel import, the NOC was under sheer pressure to jack up the fuel prices. These two things, according to NOC, increased its losses.

However, NOC has been maintaining that it could roll back the price if the government provides an immediate grant of Rs 400 million. The corporation has blamed the government for the price hike as it increased the road maintenance fee. It also said the government hasn’t waived the Value Added Tax (VAT) on LPG despite its repeated pleas.

Except for a few instances, the government has never withdrawn the fuel price hike. Will it do so this time? The government hasn’t shown any indication so far.

Petroleum dealers and entrepreneurs accuse the political parties of waking up only after price hike decisions. They say the parties do nothing to transform NOC to a transparent and professional institution. “Political parties launching agitations only after NOC hikes the fuel prices is not reasonable,” said an official at the Nepal Petroleum Dealers’ Association (NPDA). “None of these parties show any interest in the institutional reform of the NOC.”

Institutional reform of the NOC has also been recommended by many committees formed in the past. A similar matter was raised by the Finance Committee on Thursday as well, when it asked the NOC to reform its internal management. It also asked the NOC to adopt scientific price adjustment measures in future before deciding on a price hike.

However, suggestions from these committees have rarely been implemented. Corruption, mismanagement and leakages have been the main reason behind the sorry state of NOC.

A report prepared by former Vice-Chairman of National Planning Commission Shankar Sharma stated that the NOC could save a substantial amount by controlling administrative overhead costs, technical losses and shrinkage. “Until and unless the irregularities in NOC are monitored, the corporation would not run healthy,” said an NPDA official.

Arrivals reach all-time high

The highest arrival record of 1999 was broken on December 9

SANGAM PRASAIN
KATHMANDU, DEC 11 -

Tourist arrivals have bounced back in 2010 breaking all past records. Arrivals by air in the second week of December 2010 have surpassed the ever-highest number of 421, 243 recorded in 1999.

The country received 421,902 tourists in 2010 until Dec. 9, according to the tourist arrival statistics provided by Tribhuvan International Airport, Immigration Office. The highest arrivals record made in 1999 was exceeded on Dec. 9.

The second week of December saw about 1, 000 tourist arrivals daily. Travel trade entrepreneurs said that if the tourist inflow continues at the current rate, Nepal might well receive over 450,000 air tourists in 2010. However, they said tourist arrivals would drop in the third week of December due to Christmas. In the first 11 months, the country received 412,446 visitors. The figure was 378,712 in the same period last year. The country had witnessed record arrivals of 491,504 tourists (land and air) in 1999 on the back of the Visit Nepal Year 1998 promotional campaign. It was a steady slide thereafter.

Tourism entrepreneurs said three factors—increased air capacity, confidence build-up in tourist generating markets and the political commitment and investors encouraging investment in travel trade sector—boosted arrivals. “Looking at the recent arrivals trend, we can estimate that there will be over 600,000 tourists by both surface and air at the end of 2010,” said Prachanda Man Shrestha, chief executive officer of the Nepal Tourism Board.

The country has targeted attracting a million tourists in 2011. Of the total target, 700,000 have been estimated to arrive by air and the remaining by surface transportation.

Shrestha said that things were going in a positive direction. Prevailing peace has boosted the tour and travel operators’ confidence in the international market, as a result, they had been referring visitors for Nepal. Likewise, over two dozen international airlines connectivity has also made the things happen. However, the only setback in the tourism sector here is the ongoing issue of the national flag carrier. “Due to hitches in Nepal

Airlines’ fleet expansion, it has become hard to make attractive tour

packages and also reduce the airfare rendering competition with international carriers.”

Soaring tourist arrivals have brought smiles to the faces of travel entrepreneurs and hotel operators. “Things are looking very promising,” said Abinav Rana, general manager of the Radisson Hotel.

According to Rana, room occupancy of the hotels has bounced back. He said hotel occupancy in the last three month was encouraging. Hoteliers said that the last three-month period saw all the star properties being booked.

“Increased arrivals had a positive impact on hotels and the arrivals were result oriented this year,” he added. Prevailing peace in the country after many years and the Nepal Tourism Year 2011 hype has spurred visitor arrivals, Rana added. After some decades, the hospitality sector has revived with investors injecting massive investments in hotels.

The existing hotels have begun refurnishing their rooms and upgrading their services. All sorts of businesses, from handicraft, restaurants and hotels to trekking have experienced a significant growth this year. “Business of all the tourism sectors has increased,” said Arjun Prasad Sharma, president of the Nepal Association of Tour and Travel Agents (NATTA).

He, however, said that the only hindrance in the tourism sector would be Nepal Airlines’ weak performance and connectivity. There are two dozen international airlines connecting Nepal, which is encouraging.

However, visitors arriving here have the issue of high travel cost. The government should think of expanding the fleet of Nepal Airlines in order to discourage monopoly by international airlines, Sharma said. Entrepreneurs said that if NAC had not been mired in controversy, things would have been even better.


Visitor Arrivals by Air

Year Tourists

1998 398,008

1999 421,243

2000 376,914

2001 299,514

2002 218,660

2003 275,438

2004 297,335

2005 277,346

2006 283,819

2007 360,713

2008 374,661

2009 378,712

2010-Dec. 9 421, 902

Rice, maize output grows by 11pc

SANGAM PRASAIN

KATHMANDU, DEC 07 -
Production of rice and maize, the major food grains of the country, saw a robust 11 percent growth this year. It has been estimated that the growth in production of the food grains will propel the country’s economy growth and help avert food deficit.

According to the Ministry of Agriculture and Cooperatives food grains production report released on Tuesday, the country produced an additional 436,000 tons of rice and 200,000 tons of maize this year as compared to last year’s production. The production has been attributed to early monsoon and regular rainfall in major food producing districts. This year’s total rice output amounted to 4.46 million tons, while that of maize amounted 2.67 million tons.

Maize production this year has made a new record. Output of the second largest food grain after rice hit a whooping 2.67 million tons, which is equivalent to Rs. 44.65 billion.

The encouraging output, according to economists, is estimated to help meet the government envisaged 4.5 percent economic growth in the current fiscal year and avoid food deficit to some extent. However, they said the government’s food distribution channel should be more effective.

“At the time when the entire economic indicators are in a poor state, encouraging rice and maize production remains vital to propel the economic growth,” said economist Bishwambor Pyakurel.

Drop in food grains production last year had resulted in shortage of 316,465 metric tons of food, affecting over 1.6 million people. Rice and maize production had dropped by 11 and 4 percent respectively last year. Fall in the production of these major food grains had constrained the agriculture growth rate to 1 percent and the impact was largely reflected in the country’s overall economic growth.

The government has targeted to increase the economic growth rate to 4 percent in this fiscal from 3 percent last year. “Increased food grain production will at least raise the country’s Gross Domestic Product (GDP) by 0.5 percent,” said Pyakurel.

Pyakurel added that prevailing doubt about whether the country will achieve the 4 percent growth has been cleared with the agriculture production status. Agriculture sector contributes about 23 percent in the country’s total GDP. Major food grains’ production has a direct impact on the country’s GDP.

Puskar Bajracharya, a member at National Planning Commission, estimates that the GDP might increase by 1 to 2 percent. “We were uncertain about whether the country would meet the projected 4 percent economic growth rate this year when budget was delayed; however, now it seems possible,” added Bajracharya.

This additional rice and maize output is likely to play a key role in decreasing food deficit. However, economists express skepticism about government’s distribution policy.

“Unless the government adopts effective food distribution policy, districts reeling under food crisis will not get respite,” Bajracharya said, adding that the increased production could stabilise the market, but it cannot bring the price down.

“Early monsoon and continuous rainfall this year has boosted production,” said Hari Dahal spokesperson for the Agriculture Ministry. Dahal added that increased productivity in major districts also contributed to increase production.

“If paddy had been planted in all districts, an additional 178,000 tons of rice would have been produced,” Dahal said.

NAC unions warn of stir

FIFTH FREEDOM RIGHTS ROW
SANGAM PRASAIN

KATHMANDU, DEC 08 -

Trade unions of Nepal Airlines Corporation warned on Tuesday that they would shut down Tribhuvan International Airport if the government did not revoke its decision to allow Air Arabia to operate Kathmandu-Kuala Lumpur flights.

The unified trade union committee said that the Slot Committee meeting of the Civil Aviation Authority of Nepal (CAAN) had made an unilateral decision to grant Fifth Freedom rights to the carrier. The right allows an airline to pick up passengers at one destination and continue to another destination

The union said that the move was legal but against the national interest. “Selling NAC’s air route reflects an intention to make the national flag carrier go bankrupt and feed vested interests,” said Rajendra Regmi, president of the Nepal National Employees Union, central committee, NAC.

He added that although the country was celebrating Nepal Tourism Year 2011, NAC had been compelled to wage war against the government. “The government should be responsible for all the happenings,” Regmi said.

The Kathmandu-Kuala Lumpur route is one of the lucrative sectors for NAC that earns Rs. 8 million on a single flight. A NAC official said that the carrier had been incurring losses for three years on the route and that it only started generating profits from 2008.

Air Arabia is scheduled to launch its service to Malaysia from its hub in Sharjah on Dec. 16. The airline has already started selling tickets for the flight directly from its two official agents in Kathmandu.

The Ministry of Tourism and Civil Aviation and CAAN had awarded the route considering the weak performance of NAC which now has a single Boeing to serve all its international destinations. The ministry and CAAN had aimed to fill the gap on the eve of Nepal Tourism Year.

NAC had also operated flights on the Kathmandu-Bangkok-Singapore route under Fifth Freedom rights some 15 years ago, but it had to pay a royalty to Thai Airways, said NAC deputy managing director Raju Bahadur K.C. But NAC will not receive any royalty from Air Arabia, he added.

The union said that the parliamentary International Relation and Human Rights Committee had called NAC to discuss the issue. The union said that the committee had told it that any protest by NAC could harm diplomatic relations and the objectives of the Air Service Agreement (ASA) signed between the two countries. Nepal has signed ASAs with almost 36 countries and all of them allow Fifth Freedom rights.

Recently, the Commission for Investigation of Abuse of Authority (CIAA) had summoned the Ministry of Tourism and Civil Aviation secretary Kishor Thapa, joint secretary Ranjan Krishna Aryal and NAC chairman Sugat Ratna Kansakar over the issue of allowing Air Arabia to operate flights. The unions at NAC had filed cases against them.

Tourism bodies for win-win situation

Airlines fix uniform fares

SANGAM PRASAIN
KATHMANDU, DEC 06 -
Three tourism associations have decided to adopt a win-win situation in response to the move by the Airlines Operators Association of Nepal (AOAN) to fix uniform fares and commission rates for travel agents for long-haul routes.

A joint meeting of the Nepal Association of Tour Operators (NATO), the Trekking Agents Association of Nepal (TAAN) and the Nepal Association of Tour and Travel Agents (NATTA) on Monday discussed a new modality that will be presented to the AOAN.

“We have decided on a ‘win-win’ situation, but considering that Nepal Tourism Year is approaching, we have decided to wait until December-end,” one of the association members said.

“We have asked the AOAN to postpone the decision until December-end,” said NATTA treasurer C.N. Pandey who represented the association at the meeting.

He added that the meeting had endorsed a proposal to be submitted to AOAN soon. The association is mulling publishing seasonal airfares and revising some of the decisions made by the AOAN for a win-win situation. NATO president Ashok Pokhrel said that the AOAN’s move to stop the practice of charging excessive commission by travel agents from customers was a positive one. However, implementing the decision immediately could create problems for all the agencies operating here.

“We have asked that the old provision be continued until the end of 2010 as the agencies had already submitted the quotations for their tours at the old rates,” he said.

A change in the commission rate and airfares in this situation will result in massive losses to tour and travel operators, he added.

Domestic airlines have fixed uniform fares and commission rates for travel agents for long-haul routes, which they said was an effort to make the aviation industry sustainable and ensure healthy competition.

From Dec. 1, Buddha Air, Yeti Airlines, Guna Air and Agni Air have been charging the same fares for flights between Kathmandu and Pokhara, Biratnagar, Bhairahawa, Nepalgunj, Bhadrapur and Dhangadhi. The fares have been adjusted to match Buddha Air’s tariff. The differences in ticket prices range from Rs 50 to Rs 300.

Similarly, the commission for travel agents has been fixed at its upper limit. Travel agents get a commission of up to 12 percent. However, the commission on Buddha Air’s tickets has been fixed at 7 percent and the commission on Yeti Airlines tickets at 11 percent.

“The uniformity in fares and commission will not be sustainable in the current scenario where airline passenger movement has been swelling every passing year,” a tour operator said.

The move by the airlines reflects cartelling when the country has a free market economy, said a travel agent. Pokhrel said that it was their business; and that if it looks like cartelling, it was the government’s job to stop it.

Fuel prices go up for the fifth time this year

SANGAM PRASAIN
KATHMANDU, DEC 06 -
Nepal Oil Corporation (NOC) has hiked petroleum prices for the fifth time this year. The state-owned monopoly jacked up the prices of petrol, diesel and kerosene by Rs 3 per litre each effective from Monday. Similarly, liquefied petroleum gas (LPG) has become dearer by Rs 75 per cylinder.

Petrol now costs Rs. 88 per litre, diesel Rs 68.50 per litre, kerosene Rs 68.50 per litre and LPG Rs 1,325 per cylinder.

NOC said that a rise in international prices and increased road maintenance and upgrading charges levied on petrol and diesel by the government had forced it to raise the rates. The government recently doubled the road maintenance and upgrading charge on petrol to Rs 4 per litre and on diesel to Rs 2 per litre. NOC managing director Digambar Jha said that the international price of crude oil was US$ 74 per barrel in July when NOC last revised fuel prices. “The price has risen to US$ 90 in the last five months.”

Similarly, the price of LPG in the international market was US$ 590 per ton in September which soared to US$ 783 in December, Jha added.

The price hike means NOC will collect monthly profits of Rs 30 million from petrol, Rs 110 million from kerosene and Rs 30 million from aviation fuel. However, the corporation will be incurring monthly losses of Rs 200 million on LPG and Rs 140 million on diesel. “In total, we will be losing Rs 170 million each month,” Jha said. NOC said the government’s decision to double the road maintenance charge had added Rs 28.44 and Rs 11.56 to the price of a litre of petrol and diesel respectively. The government will now be taking in Rs 180 million each month as road maintenance charge. Similarly, the government will be collecting Rs 149 on each cylinder of LPG.

Prem Lal Maharjan, chairperson of the National Consumers Forum, said that the government’s decision to double the road maintenance charge was not reasonable. “The government is fuelling inflation when consumers are already suffering from double-digit price rises,” he added.

“Everyone knows about the condition of the roads. The government is collecting Rs 20 million each day in the name of road maintenance, but it has been doing nothing,” Maharjan said. “The hefty tax levied on LPG shows how the government is increasing the burden on the people.”




Year Petrol Diesel Kerosene LPg
(Rs/Lt) (Rs/Lt) (Rs/Lt)
2003 56 33.50 27 700
2004 62 41 36 750
2005 67 46 39 900
2006 67 52.50 47.65 ----
2007-Oct 73.50 56.25 51.20 1,100
2007-Dec 80 56.25 51.20 -----
2008 100 70 65 1,200
2008-Dec 85.50 60.50 60.50 -----
2009 77.50 57.50 57.50
2010-Feb 77.50 59 59 1,250
2010-Mar 80 61 61 -----
2010-Apr 82 63 63 -----
2010-July 85 65.50 65.50 -----
2010-Dec 88 68.50 68.50 1,325

Domestic Airlines fix uniform fares for long-distance routes

SANGAM PRASAIN

KATHMANDU, DEC 06 -

Domestic airlines have fixed uniform fares and commission rates for travel agents for long-haul routes. The carriers said the move was an effort to make the aviation industry sustainable and ensure healthy competition.

From Dec. 1, Buddha Air, Yeti Airlines, Guna Air and Agni Air have been charging the same fares for flights between Kathmandu and Pokhara, Biratnagar, Bhaira-hawa, Nepalgunj, Bhadrapur and Dhangadhi. The fares have been adjusted to match Buddha Air’s tariff. The differences in ticket prices range from Rs 50 to Rs 300.

Similarly, the commission

for travel agents has been fixed

at its upper limit. Travel agents

get a commission of up to 12 percent. However, the commission

on Buddha Air’s tickets has

been fixed at 7 percent and the commission on Yeti Airlines tickets at 11 percent.

“The uniformity move has been taken to stop uncontrolled overcharging by travel agents when tickets are scarce,” said Rupesh Joshi, senior marketing manager of Buddha Air.

Meanwhile, travellers fear that the standardised airfare policy will mean the end of competition among airlines regarding fares.

“The flat airfare provision will stop the fare war, but it will encourage airlines to upgrade their services,” said Binay Shakya, manager of Yeti Airlines.

He added that overcharging by travel agents would be stopped while carriers would be encouraged to provide improved services. “Fliers will now select the airline that provides the best service as the fares are the same for all,” Shakya said.

Guna Air marketing manager Prajwal Thapa said that

uniformity in airfares would

result in greater punctuality,

more efficient service and healthy competition.

“We are thinking of making domestic airlines sustainable. Fleet expansion could lead to unhealthy competition in terms of airfare among carriers with small and large fleets,” said Yog Raj Kandel, member of the Airlines Operators Association of Nepal (AOAN).


From Kathmandu Revised Yeti’s Past Guna Past Agni Past

Pokhara 2,780 2,700 2,660 2,660
Biratnagar 4,160 4,100 4,000 4,000
Bhairahawa 3,585 3,485 3,285 3,385
Nepalgunj 5,335 5,035 ------ ------
Bhadrapur 4,800 4,750 ------ 4,650
Dhangadi 7,560 7,560 ------ ------

Swelling arrivals spur investment in resorts

SANGAM PRASAIN
KATHMANDU, DEC 03 -
Increased tourist arrivals and hopes of lasting peace coming to the country have inspired investors to build new resorts. Sukute Beach Adventure Camp in Sindhupalchok, Balthali Village Resort in Kavre and Kinnari Resort in Naldunga, Kavre have obtained operating licenses from the Tourism Ministry’s Industrial Division.

Nirajan Ghimire, section officer at the division, said that the applications of another three resorts -- Narayani Resort, Chitwan, Pristine Paradise Tent Resort, Dhulikhel and Two River Lodge, Melamchi -- were being processed.

There has been a significant rise in the registration of new hotels since 2009, but there have been few resorts. According to the Tourism Ministry, registrations of new hotels exceeded 1,100 in 2009-10.

The resort sector, worst hit during the decade-long conflict, has been making a slow recovery. “Hotels can be erected anywhere in the city or suburbs, but a resort property requires a scenic setting like near lakes and rivers or on hills and mountains,” said Arun Shrestha, executive director of Dhulikhel Mountain Resort. He said resorts are spread over a larger area and contain all the facilities found in hotels. Moreover, a resort has to provide recreational opportunities like golf, spa, amusement park and sports.

Resort operators said they were more vulnerable during the conflict period because of their isolated and far-flung locations. “Travel traders are upbeat that the situation is improving, and swelling arrivals in recent times have encouraged investment in resorts,” said Shrestha.

He claimed that some small hotels and restaurants were calling themselves resorts even though they did not fulfil the requirements. The government should consider this before issuing the operating certificate, he added. Nepal received 412,446 tourists by air during the period January-November, the highest since 1999.

36 get home stay permits

SANGAM PRASAIN

KATHMANDU, DEC 03 -
The Industry Division of the Ministry of Tourism and Civil Aviation has issued operating permits to 36 home stay houses since Aug. 17 when registration became mandatory.

According to a Tourism Ministry official, most of the home stay houses are located outside the Kathmandu Valley.

With the tourism market growing and Nepal Tourism Year 2011 approaching, home stay operators are hoping that a larger number of tourists will participate in the programme. Under the scheme, foreign visitors will be provided accommodation and food in private residences equipped with tourist standard facilities.

According to the Industry Division, Kapan Home Stay in Kapan, Newa Home Stay in Tahachal, Swayambhu Home Stay in Swayambhu and Ichangu Home Stay in Ichangu are the home stay houses that have obtained operating certificates in the Kathmandu Valley.

Chitwan, Kavre and Kaski are the other places where the home stay programme is being implemented, said Niranjan Ghimire, section officer at the Industry Division. He added that the division was planning to issue notices to those operating home stay houses illegally. “We will not allow home stay to be operated illegally.”

Home stay houses began proliferating after the private sector floated a proposal to host tourists in private houses expecting a shortage of hotel accommodation with the projected rise in arrivals during NTY 2011.

The Tourism Ministry has allocated Rs 30 million to regulate home stay and make it sustainable. Under the programme, the ministry in coordination with the Nepal Tourism Board is preparing a manual for capacity building and providing training to home stay operators. Under the home stay guidelines, anybody who has a home with at least four rooms can use the empty rooms to accommodate tourists. The household should be able to give a taste of the local culture and food.

Tourist arrival by air touches an all-time high

SANGAM PRASAIN

KATHMANDU, DEC 01 -
As many as 412,446 tourists visited Nepal by air in the last 11 months, revealed a Nepal Tourism Board (NTB) data. This is the first instance that the country received such a huge number of tourists since 1999.

Annual figures in the last eleven years have never been as high. Around 421,243 tourists had visited Nepal by air in 1999. However, the total number of tourists by the end of November was only 387,747.

Although the year 1999 saw an all-time high number of air visitors, tourism entrepreneurs say the year 2010 will set yet another record surpassing the 1999 records. It means that at least 9,000 tourists must visit Nepal by air in December to overcome the 11-year-old record. Last December, the country had received 31,396 air tourists.

“We are expecting that tourists’ movement will set a new record this year,” said Aditya Baral, spokesperson for NTB. Arrivals by air in November reached 48,331, 21.5 percent more than that in the same month last year. Total number of air arrivals till November last year was 347, 316. According to NTB, in November, South Asian region posted a growth of 55.5 percent, with Bangladesh-80.7 percent, India-52.9 percent, Pakistan-6.6 percent and Sri Lanka-44.2 percent.

Visitor arrivals from Asia (other than South Asia) also saw a growth of 8.8 percent, with Japan-14.5 percent, Malaysia-16.4 percent, and South Korea-44.9 percent and Thailand-154.3 percent.

However, arrivals from China and Singapore registered negative growths of 3.8 percent and 5.5 percent respectively.

Europe registered an overall growth of 8.6 percent. Arrivals from France, Germany, Italy, Netherl-ands, Russia, Spain, Sweden, and the UK upped by 8.3 percent, 25.7 percent, 3.2 percent, 9.1 percent, 1.5 percent, 16.8 percent 13.4 percent, and 4.9 percent respectively. Arrivals from Australia and New Zealand upped by 10.8 percent and 30.2 percent respectively. Similarly, the USA and Canada have registered growth of 39.2 percent and 31.5 percent respectively.

Nepal had marked 1998 as Visit Nepal Year to disseminate positive image of Nepal for tourism. With this move, the year 1999 witnessed the highest visitors. However, the numbers started decreasing gradually after 1999. Due to the decade-long conflict, tourist arrivals saw ups and downs.

“The political commitment made by the parties not to launch strikes in 2011 is the positive message,” said Baral. NTB’s promotion in the international level, private sector’s participation and marketing for NTY-2011 and increased international airlines movement has boosted arrivals in Nepal.

With the growth in tourist arrivals, international airlines have launched new services in Nepal. Only 12 international airlines had been providing service during the conflict, where as the number of airlines has doubled now.





Visitor Arrivals by Air

Year Tourists

1998 398,008

1999 421,243

2000 376,914

2001 299,514

2002 218,660

2003 275,438

2004 297,335

2005 277,346

2006 283,819

2007 360,713

2008 374,661

2009 378,712

2010 412,446

Source: Ministry of Tourism and Civil Aviation

Release of budget revitalises NTY campaign

SANGAM PRASAIN
KATHMANDU, NOV 26 -
The budget has finally come out allowing the government and the private sector to start work on programmes to promote Nepal Tourism Year 2011. A line-up of actions is to be tabled at a meeting scheduled to be held on Sunday, a government official said.

“We have been allocated Rs 230 million for the promotion of NTY, and budgeting has to be done,” said Tourism Ministry spokesperson Laxman Prasad Bhattarai.

Although the NTY 2011 implementing committee and the government had planned to launch a massive campaign at the domestic and international levels, they had been hamstrung by a delay in the budget. “Now that the budget has been issued, the money will be spent on national and international promotion, capacity building and inaugurating the much-waited day on Jan. 14,” Bhattarai said.

The government has decided to launch advertising and promotional activities to make the NTY 2011 campaign a success and attract one million tourists in 2011, “We could not start international promotion without the budget. The budget may have been late, but it has brought cheer,” said Ranjit Acharya, member of the NTY 2011 promotion committee. According to him, a large chunk of the budget will be spent on international promotion.

The NTY 2011 promotion committee plans to focus on India and China. In India, NTY will be promoted through television and print advertisements. However, considering the high costs of conducting a publicity campaign in China, the committee has planned to do it through public relations, online and web-based programmes. News conferences, brochures and official websites will be used to attract Chinese visitors.

Apart from the neighbouring markets, NTY has targeted Thailand, Malaysia and Singapore in East Asia, Acharya said. In Europe, promotional campaigns will be launched in Germany, the UK, Switzerland and Denmark. “In the US, we are planning to do SMS and online campaigning,” he added. Likewise, the committee also plans to go to Qatar and Dubai.

“It is important to have coordination and communication with private stakeholders for a proactive and professional approach. In this regard, the private sector will focus on the trade aspect,” Acharya said.

Tourism on the Road to Recovery

SANGAM PRASAIN
KATHMANDU, NOV. 25

Nepal's tourism industry is recovering from a six-year slump following the ceasefire and the start of the peace process. According to the preliminary figures released by the Pacific Asia Travel Association (PATA), South Asia recorded a 3 percent decline in arrivals in 2009. However, arrivals rebounded strongly for Nepal during the period resulting in full-year gains of 1 percent.

Similarly, the preliminary data of the Ministry of Tourism and Civil Aviation for 2009 shows that arrivals increased by 1.1 percent compared to the previous year.

Last year, tourist arrivals numbered 509,752 including 378,712 by air and 131,040 by land. In 2008, arrivals stood at 500,277 including 374,661 by air and 125,616 by land.

Tourism entrepreneurs said that the gradual growth was a sign that tourism was getting better with an improvement in the political situation.

According to the International Trade Centre (ITC), Geneva, tourism earned Nepal US$ 352 million in 2008.

The ITC has identified tourism as a potential growth sector. The prospects are likely to expand with the Nepal Tourism Year 2011 campaign. The ambitious promotion plans to double tourist arrivals during 2011. Tourism entrepreneurs are hopeful that India and China will be a potential market to meet the envisaged goal.

The NTY implementation committee has projected that the southern and northern neighbours will contribute 40 percent of the arrivals out of the targeted one million.

"We are aiming for 265,000 visitors from India and 100,000 from China," said Yogendra Sakya, coordinator of the NTY implementation committee.

"The Chinese are attracted to Nepal for business opportunities," Shakya said. Pilgrimage is a chief lure for Indian tourists.

"We don't have new products presently, however, the focus will be on international events and activities," he said.

Apart from mountaineering and trekking, golf, cricket and other sports and adventure activities are expected to pull in young visitors.

The pledge made recently by 19 political parties not to organize bandas or strikes during 2011 is another encouraging development for NTY.

"This has removed the obstruction to marketing our products," said Prachanda Man Shrestha, chief executive officer of the Nepal Tourism Board.

"With the commitment made by the political parties, there will be a substantial improvement in the travel advisories about Nepal," he added. "We can assure international visitors that Nepal is a safe destination to visit through the travel advisories."

Where fruits reap no benefit for growers

SANGAM PRASAIN
KATHMANDU, NOV 25 -

Nepal produces 250,000 tons of oranges annually, but only 10 percent of this output reaches the market due to inadequate transportation facilities, poor market access and dismal export performance.

According to the Ministry of Agriculture and Cooperatives, only 23,000 tons are shipped to buyers while the rest ends up as food for livestock. A ministry official said that although demand has not expanded and orange farmers are yet to learn how to get better prices, recent data shows that orange growers have been enlarging the area under cultivation.

Orange output amounted to 260,054 tons in the fiscal year 2009-10. The area under cultivation has increased to 23,098 hectares from 6,250 hectares in the last 10 years. Similarly, output increased to 260,854 tons from 66,654 tons during the same period, the ministry’s data showed.

Agriculture Ministry spokesperson Hari Dahal said that poor exports and supply in the domestic market due to inadequate transport facilities had prevented orange growers from reaping benefits.

The country exported 830 tons of oranges and 10,656 tons of orange juice in 2009-10. Orange is grown in over 54 districts, particularly in the hilly areas. Orange accounts for 25 percent of the total fruit production. Apart from poor transport facilities, ineffective collection, inadequate cold storage facilities, poor market access and low prices have prevented producers from getting the real value of their production, Dahal said.

Although the area under cultivation and productivity have increased in the last decade, the benefit for farmers has not grown proportionately. Orange production has overtaken mango production, which was at the top position. “In terms of value, oranges worth Rs. 10 billion are produced annually,” Dahal added.

Considering the increasing interest of farmers towards orange cultivation, the country could produce oranges worth Rs. 20 billion in a couple of years. However, the government should bring an appropriate incentives package to boost output, he said.

The Western Development Region is the largest producer of oranges accounting for 40 percent of the total output. Syangja is the largest orange producing district with a total output of 11,732 tons in 2009-10. Lamjung stood second with 10,814 tons followed by Tanahu (9,631 tons), Salyan (8,598 tons), Kavre (7,565 tons), Gorkha (7,011 tons), Dhading (6,341 tons), Terhathum (7,193 tons) and Dhankuta (95,935 tons).

Lukla No 8 in world’s 10 most thrilling airports

SANGAM PRASAIN
KATHMANDU, NOV 24 -

Lukla Airport, the gateway to the Everest region, has been ranked eighth among the world’s top 10 stunning and inspirational airport approaches by PrivateFly.com.

The private jet-booking agency based in St. Albans, Hertfordshire has suggested its 10 recommended airports to adventure lovers as “A View to a Thrill”.

The surrounding terrain, thin air, highly changeable weather and the airport’s short, sloping runway make it one of the most challenging landings in the world. History Channel’s Most Extreme Airports programme has ranked Lukla as the most dangerous airport in the world.

Lukla is a 35-minute flight from Kathmandu. It is the busiest domestic airport in the country, handling more than 50 flights daily during the tourist season. Only short take off and landing (STOL) airplanes can land at Lukla.

The runway is 351 m long and rises over 30 m from the bottom to the top, giving it an angle of about 10 degrees. The airport lies at an elevation of 2,800 m.

It was built in the 1960s with the support of Sir Edmund Hillary.

In January 2008, the airport was renamed Tenzing-Hillary Airport in honour of the first Everest summitters.

PrivateFly.com has named Sion Airport in Switzerland the perfect touchdown at Europe’s most stunning airport. St. Maarten-Princess Juliana Airport in the Netherlands was placed third.

St. Barts in the Caribbean, Gibraltar, St. Gallen-Altenrhein in Switzerland, Madeira Funchal in Portugal and London City airport come after Lukla as the most thrilling and adventurous airports.

Gasoline prices expected to increase

SANGAM PRASAIN
KATHMANDU, NOV 23 -

The budget has increased the charge levied on petrol and diesel under the road maintenance and upgrading head which means that Nepal Oil Corporation (NOC) will soon pass the additional burden to consumers.

The budget has hiked the road maintenance and upgrading charge on petrol to Rs. 4 per litre from Rs. 2 and to Rs 2 per litre on diesel from Rs 1, according to an NOC official.

The government has raised these charges as revenue from petrol and diesel for maintenance and upgrading of roads. With the increment, NOC will have to pay Rs 28.44 on a litre of petrol and Rs 11.56 on a litre of diesel as revenue.

NOC general manager Digambar Jha said that the hike in road maintenance and upgrading charges by the new budget has resulted in losses amounting to more than double to NOC.

“The move has compelled us to seek a revision of the existing price structure of petrol and diesel,” said Jha.

The hike has compelled NOC to bear additional expenses of Rs 32 million on petrol and Rs 65 million on diesel each month. The fresh hike will compel NOC to incur a loss of Rs 3.25 on a litre of diesel. The profit on petrol has dropped to Rs. 1 per litre.

The state-owned monopoly had increased the price of petrol by Rs 3 per litre and diesel by Rs 2.50 per litre on July 6. Since then, NOC had been enjoying a profit of Rs 5 per litre on petrol and Rs 0.76 on diesel. “We were optimistic that the new budget would consider the value added tax (VAT) on LP gas. Instead, the budget added a greater on NOC,” Jha added. It loses Rs 144 on each cylinder of gas.

NOC had been requesting the government for a VAT reduction on LP gas for a long time.

The country consumes 16 million litres of petrol monthly while diesel consumption amounts to 60 million litres.

“NOC’s total losses will climb to Rs 187 million per month from the existing Rs 90 million,” the NOC said.

Jha said that the government decision to hike the fuel price was not reasonable. “The increment on diesel will push up transport fares which will adversely affect the market price.”

Petroleum is the government’s largest revenue earning commodity. In the last fiscal year, the government raised Rs 12. 82 billion as revenue from NOC.