Nepal keen on NW passage
SANGAM PRASAIN
KATHMANDU, JUL 29 -
Nepal has once again shown interest in lobbying with China and India to bring into operation the air route dubbed Trans-Himalayan 2 connecting Southeast Asia, the Middle East and Europe.
Officials of the Civil Aviation Authority of Nepal (CAAN) said that Minister for Tourism and Civil Aviation Sarat Singh Bhandari had assured them that the government would use diplomatic channels to talk with both neighbours to bring the air route into operation.
If the proposed air route is opened, hundreds of international airlines will use Nepali airspace and help the country to develop as a hub, air revenue will be increased and the air distance between China and Southeast Asia will be significantly reduced benefiting the region as a whole.
CAAN officials added that the proposed route would be the shortest and could establish Nepal as an international transit point. The second international airport that the government has planned to construct in Nijgadh this fiscal
year would be the greatest beneficiary.
The proposed route is more direct, safer, economical and efficient for flights between Europe, the Middle East and East Asia. These routes will reduce the congestion of westbound traffic flows across the Bay of Bengal. The officials said that access to international air space would give Nepal a huge opportunity to develop as a hub like India, the Maldives, Pakistan and Sri Lanka in South Asia. They added that international air accessibility had changed the face of Southeast Asia over the period 1979-97.
Laxman Prasad Bhattarai, spokesperson at the Ministry of Tourism, said that Nepal had been raising the issue at ICAO and other forums, but that nothing had come of it. He added that the proposed route with maximum coverage of Nepal’s air space on long distance international flights could bring great benefits to the country if they could be brought into operation.
CAAN director general Ram Prasad Neupane said that ICAO had suggested lobbying and signing memorandums of understanding with each country linked with the route. He said that Nepal must sign separate air route agreements with China and India to bring the route into operation. “The issue should be raised through diplomatic channels,” he added.
According to CAAN, Nepal has proposed three air routes -- Himalaya 1 (Bankok-Kolkata-Nepalgunj-Indek in Pakistan), Himalaya 2 (Kunming-Kathmandu-Delhi) and Himalaya 3 (Kathmandu-Nepalgunj-Delhi) at different ICAO meetings and other forums.
“The most lucrative route is Himalaya 2 which is a dream as it requires much effort by Nepal to get India and China to agree,” said Pratap Babu Tiwari, deputy director, Air Traffic Management and Air Route Department, CAAN. He added that the International Air Transport Association (IATA) was also interested in the route.
Currently, Nepal has three incoming air routes — Simara, Kakkarbhitta from Paro and the Nonim air route from China. Kathmandu-Mahendra-nagar-Delhi is the outgoing air route for international flights.
Saturday, July 31, 2010
Thursday, July 29, 2010
Paid leave may boost tourism: MoF
SANGAM PRASAIN
KATHMANDU, FEB 28 - The Ministry of Finance (MoF) is preparing bring forth a 'Paid Leave' package for civil servants aiming at promoting domestic tourism.
The government has kept the plan at a priority list.
Finance Secretary Krishna Hari Banskota said that the ministry was discussing the package initiative in order to promote domestic tourism and boost the upcoming Nepal Tourism Year 2011 (NTY-2011).
"It is not possible to implement the model immediately. However, we are mulling over the issue so that it can be launched next year," he said. According to him, firstly resource for the expenditure needs to be managed to implement the package.
Paid Leave in other countries is defined as a feature in some employee agreements that provide a 'resource' of hours that an employee can draw from to take time off from work and take leave to visit an inbound tourist across the country.
The initiative aims at promoting domestic tourism. The packages are implemented in most of the Asian and European countries where the government provides leave to its employees.
The World Tourism Organiation defines tourists as people who "travel to and stay in places outside their usual environment for more than 24 hours and not more than one consecutive year for leisure, business and other purposes not related to the exercise of an activity remunerated from within the place visited". It could be either domestic or international. Under the domestic tourism promotion, paid leave has become a popular global leisure activity.
However, Nepal's tourism policy does not incorporate domestic visitors as tourists, said a travel entrepreneur.
If the paid leave is implemented, about 400,000 civil servants should be incorporated to these packages by the ministry paying them to go for visit. "Thus, this issue will take some time," Banskota added.
Tourism Ministry, Nepal Tourism Board and travel entrepreneurs had been requesting the government for necessary policy and programme of paid leave to promote domestic tourism for the last three years. "If the programme is implemented, it can give boost to the tourism sector even during off seasons," said Prachanda Man Shrestha, chief executive officer of NTB.
Arjun Sharma, president of Nepal Association of Tour and Travel Agents (NATTA) said that the programme could be implemented but executing the programme at one time was difficult. "It should be started from one of the largest profit earning public enterprises," he said.
Madhav Om Shrestha, executive director of Hotel Association of Nepal (HAN) said that they had been requesting the government several times for the paid leave packages and programmes. Government is also positive about providing paid leave to the civil servants, he said.
Monday, July 26, 2010
Cheating goes ‘mobile’ in exam halls
SANGAM PRASAIN
KATHMANDU, JUL 26 -
Using chits or bringing unauthorised items into the exam hall is strictly prohibited. But, what if a student uses a mobile phone, the most high-tech method for cheating?
Modern technology has changed the way how students cheat in examinations. It gives them the opportunity to be less liable to be caught. One big help for them is the mobile internet browsing service.
Lalit Sharma (name changed), a Master’s level student appearing for his second year examinations commended the new technique. “It’s trouble-free way, no need to waste you time making a chit or running frequently to the toilet to see the guess papers and guides,” he said. Just click the question topic and see the answer that comes, he said scoffing at the examination guards. . “It is easy to dodge them,” he added.
Google is the best option for students to get the answers. It responds quickly and the information is better and more reliable than what you get from the teachers, Sharma said.
Prof. Bishwomber Pyakurel, an admirer of mobile internet, said, “Thanks to my cell phone, it took me just two minutes to know the topic being discussed,” he said during one of his discussion programmes held recently. Talking to the Post, he stressed knowledge world should be utilised in the right way. “In developed nations, students are given limited space to answer questions during their examination. So, they do not find internet copying effective,” he said.
Ratna Rajya Campus Chief Gopal Chandra Pokhrel said the trend of using internet mobiles for cheating is growing. “We found several instances at the Bachelor’s level, especially in the Science and Commerce streams,” he said. According to him, such users at the Master’s level are rare as they have limited time to answer a lot of questions. He said that the college direct the examinees not to carry mobile phones adding that even so it is not possible to confiscate the phones.
Today, nearly everyone carries mobile phones. The college issue notices urging the students not to carry mobile phones but the students hardly abide by the rules. “We cannot pressurise them or seize their mobile phones even though we know some of them are into this hi-tech cheating,” Pokhrel said.
SANGAM PRASAIN
KATHMANDU, JUL 26 -
Using chits or bringing unauthorised items into the exam hall is strictly prohibited. But, what if a student uses a mobile phone, the most high-tech method for cheating?
Modern technology has changed the way how students cheat in examinations. It gives them the opportunity to be less liable to be caught. One big help for them is the mobile internet browsing service.
Lalit Sharma (name changed), a Master’s level student appearing for his second year examinations commended the new technique. “It’s trouble-free way, no need to waste you time making a chit or running frequently to the toilet to see the guess papers and guides,” he said. Just click the question topic and see the answer that comes, he said scoffing at the examination guards. . “It is easy to dodge them,” he added.
Google is the best option for students to get the answers. It responds quickly and the information is better and more reliable than what you get from the teachers, Sharma said.
Prof. Bishwomber Pyakurel, an admirer of mobile internet, said, “Thanks to my cell phone, it took me just two minutes to know the topic being discussed,” he said during one of his discussion programmes held recently. Talking to the Post, he stressed knowledge world should be utilised in the right way. “In developed nations, students are given limited space to answer questions during their examination. So, they do not find internet copying effective,” he said.
Ratna Rajya Campus Chief Gopal Chandra Pokhrel said the trend of using internet mobiles for cheating is growing. “We found several instances at the Bachelor’s level, especially in the Science and Commerce streams,” he said. According to him, such users at the Master’s level are rare as they have limited time to answer a lot of questions. He said that the college direct the examinees not to carry mobile phones adding that even so it is not possible to confiscate the phones.
Today, nearly everyone carries mobile phones. The college issue notices urging the students not to carry mobile phones but the students hardly abide by the rules. “We cannot pressurise them or seize their mobile phones even though we know some of them are into this hi-tech cheating,” Pokhrel said.
FY to see 2nd int’l airport birth
SANGAM PRASAIN
KATHMANDU, JUL 26 -
Construction of the country's second international airport is among the projects the Ministry of Tourism and Civil Aviation (MoTCA) has planned for the current fiscal year 2010-11. Eight new projects have been proposed in addition to the projects carried over from the last fiscal.
Implementing leave tourism (paid leave), setting up a new radar at Tribhuvan International Airport (TIA), expanding tourism areas and implementing the Tourism Satellite Account are among the new projects that will be started this fiscal year.
Similarly, integrated lake conservation project, special Mt. Everest cleaning mission and converting Nepal Airlines Corporation (NAC) into a company are its other plans. All these projects have been assessed in the last fiscal year and will be accomplished in the current fiscal, MoTCA said Monday while discussing its annual progress report and new programmes at the parliamentary International Relation and Human Rights Committee.
In a bid to boost domestic tourism and the morale of civil servants, MoTCA has proposed the paid leave tourism concept. A task force has identified potential vacation spots in different parts of the country.
MoTCA has also planned to install a new radar system considering the increase in air traffic at the country's only international airport.
"TIA, which was designed to handle 1,300 passengers per hour, sometimes has to process over 2,000 passengers," said MoTCA secretary Kishore Thapa.
MoTCA has proposed expanding tourist areas to Ilam in the east and Baitadi in the west. Kathmandu, Pokhara, Lumbini, Chitwan and Lukla are the only designated tourist spots presently.
The Tourism Satellite Account will calculate separate credible and comprehensive measurements of tourism value from tourism activities and provide concrete data of tourism contribution to the country's Gross Domestic Product (GDP).
Under the integrated lake conservation project, the ministry will conserve the country's lakes making them a significant product to attract tourists.
The feasibility study for the country's second international airport at Nijgadh will be concluded after seven months. "We are planning to start construction after the study is completed," Thapa said. The contract to do the feasibility study was awarded to LMW, Korea last year. Converting Nepal Airlines Corporation into a company will also be initiated in the current fiscal year.
The ministry is working on the procedures from the last fiscal year. Likewise, MoTCA has proposed opening new peaks for commercial expeditions.
The ministry will also revise the air service agreements (ASAs) signed with European, Middle Eastern and Asia Pacific countries. Nepal currently has ASAs with 35 countries.
Tourism infrastructure development, attracting one million tourists during Nepal Tourism Year 2011 and upgrading the international airport and regional airports are among the projects being carried over from the last fiscal.
The National Planning Commission has a budget ceiling of Rs. 818.7 million (excluding the budget for NTY 2011) for MoTCA for the current fiscal year.
SANGAM PRASAIN
KATHMANDU, JUL 26 -
Construction of the country's second international airport is among the projects the Ministry of Tourism and Civil Aviation (MoTCA) has planned for the current fiscal year 2010-11. Eight new projects have been proposed in addition to the projects carried over from the last fiscal.
Implementing leave tourism (paid leave), setting up a new radar at Tribhuvan International Airport (TIA), expanding tourism areas and implementing the Tourism Satellite Account are among the new projects that will be started this fiscal year.
Similarly, integrated lake conservation project, special Mt. Everest cleaning mission and converting Nepal Airlines Corporation (NAC) into a company are its other plans. All these projects have been assessed in the last fiscal year and will be accomplished in the current fiscal, MoTCA said Monday while discussing its annual progress report and new programmes at the parliamentary International Relation and Human Rights Committee.
In a bid to boost domestic tourism and the morale of civil servants, MoTCA has proposed the paid leave tourism concept. A task force has identified potential vacation spots in different parts of the country.
MoTCA has also planned to install a new radar system considering the increase in air traffic at the country's only international airport.
"TIA, which was designed to handle 1,300 passengers per hour, sometimes has to process over 2,000 passengers," said MoTCA secretary Kishore Thapa.
MoTCA has proposed expanding tourist areas to Ilam in the east and Baitadi in the west. Kathmandu, Pokhara, Lumbini, Chitwan and Lukla are the only designated tourist spots presently.
The Tourism Satellite Account will calculate separate credible and comprehensive measurements of tourism value from tourism activities and provide concrete data of tourism contribution to the country's Gross Domestic Product (GDP).
Under the integrated lake conservation project, the ministry will conserve the country's lakes making them a significant product to attract tourists.
The feasibility study for the country's second international airport at Nijgadh will be concluded after seven months. "We are planning to start construction after the study is completed," Thapa said. The contract to do the feasibility study was awarded to LMW, Korea last year. Converting Nepal Airlines Corporation into a company will also be initiated in the current fiscal year.
The ministry is working on the procedures from the last fiscal year. Likewise, MoTCA has proposed opening new peaks for commercial expeditions.
The ministry will also revise the air service agreements (ASAs) signed with European, Middle Eastern and Asia Pacific countries. Nepal currently has ASAs with 35 countries.
Tourism infrastructure development, attracting one million tourists during Nepal Tourism Year 2011 and upgrading the international airport and regional airports are among the projects being carried over from the last fiscal.
The National Planning Commission has a budget ceiling of Rs. 818.7 million (excluding the budget for NTY 2011) for MoTCA for the current fiscal year.
Saturday, July 24, 2010
Political unrest has hit industry
SANGAM PRASAIN
JUL 15 -
Dinesh Shrestha is managing director of Pacific Commercial Company, authorized dealer of Mahindra two-wheelers in Nepal. Shrestha, who is also an executive committee member of the Federation of Nepalese Chambers of Commerce and Industry, has interests in trading, education, manufacturing and health. Sangam Prasain of The Kathmandu Post talked with Shrestha on the business environment and Pacific's business interest. Excerpts:
The Economic Survey 2009/10 shows a rise in vehicle sales. How has your company that deals in Mahindra scooters performed?
There has been a significant rise in the sale of vehicles from four-wheelers to two-wheelers. With ever increasing population and urbanisation, owning a vehicle has become a necessity. As we don't have an efficient mass transportation system in place, people living in urban areas have no choice but to go for private vehicles. This has increased the demand for two-wheelers in major cities including Kathmandu. Hence, business has been good for every automobile company this fiscal year. In our case, we've sold around 1,500 units of Mahindra scooters in the last eight months.
How many models of Mahindra scooters are available in the market?
We are currently selling the four-stroke 125 cc Mahindra Duro, 124.6 cc Mahindra Flyte and Mahindra Rodeo. Though we've recently started selling Mahindra scooters in Nepal, our market share is between 20-25 percent in the overall scooter segment.
Due to safety features, mileage and pickup, demand for scooters has been increasing gradually. Even then, sales are relatively low compared to motorbikes; but we're optimistic that they will go up.
Your group has recently entered the FMCG sector with snacks. How is the new business going, and what are the new products you are planning to launch?
We have recently launched our FMCG products under the Mum's brand in the Nepali market. Mum's brand is a processed food and snacks from India's Amrapali Group. The response so far has been positive. With snacks and processed foods becoming popular in Nepal, we aim to expand and diversify the existing product line. We want to provide customers the finest taste with the highest quality. As the Amrapali Group has recently started juice production, we'll be launching it in the Nepali market in the near future.
The government has failed to present a complete budget once again. What impact will it have on the private sector?
It shows that the economic agenda has never been a priority for our political parties. This is the second instance that the country has missed a complete budget. When the entire industrial sector is on the brink of collapse and investors are unwilling to invest in the country, a full-fledged budget was the need of the hour.
Entrepreneurs always study the budget before making their business and expansion plans. The delay in the budget will affect the entire industrial and business sector. The private sector has suggested to the government to introduce import substitution measures among other issues to narrow the trade deficit; but with the special budget, we can't think of lessening the trade deficit.
What are the major problems that the private sector is facing and which need to be addressed immediately?
Political instability has made the business climate pessimistic and spread a sense of insecurity. As in the previous years, load-shedding and labour problems have made the cost of doing business expensive. This year, we also faced difficulties in getting loans from banks due to the liquidity crunch. Despite the central bank asking commercial banks to finance the industrial sector, no bank is willing to invest. None of the banks wants to bear losses putting money in industry in this business climate.
SANGAM PRASAIN
JUL 15 -
Dinesh Shrestha is managing director of Pacific Commercial Company, authorized dealer of Mahindra two-wheelers in Nepal. Shrestha, who is also an executive committee member of the Federation of Nepalese Chambers of Commerce and Industry, has interests in trading, education, manufacturing and health. Sangam Prasain of The Kathmandu Post talked with Shrestha on the business environment and Pacific's business interest. Excerpts:
The Economic Survey 2009/10 shows a rise in vehicle sales. How has your company that deals in Mahindra scooters performed?
There has been a significant rise in the sale of vehicles from four-wheelers to two-wheelers. With ever increasing population and urbanisation, owning a vehicle has become a necessity. As we don't have an efficient mass transportation system in place, people living in urban areas have no choice but to go for private vehicles. This has increased the demand for two-wheelers in major cities including Kathmandu. Hence, business has been good for every automobile company this fiscal year. In our case, we've sold around 1,500 units of Mahindra scooters in the last eight months.
How many models of Mahindra scooters are available in the market?
We are currently selling the four-stroke 125 cc Mahindra Duro, 124.6 cc Mahindra Flyte and Mahindra Rodeo. Though we've recently started selling Mahindra scooters in Nepal, our market share is between 20-25 percent in the overall scooter segment.
Due to safety features, mileage and pickup, demand for scooters has been increasing gradually. Even then, sales are relatively low compared to motorbikes; but we're optimistic that they will go up.
Your group has recently entered the FMCG sector with snacks. How is the new business going, and what are the new products you are planning to launch?
We have recently launched our FMCG products under the Mum's brand in the Nepali market. Mum's brand is a processed food and snacks from India's Amrapali Group. The response so far has been positive. With snacks and processed foods becoming popular in Nepal, we aim to expand and diversify the existing product line. We want to provide customers the finest taste with the highest quality. As the Amrapali Group has recently started juice production, we'll be launching it in the Nepali market in the near future.
The government has failed to present a complete budget once again. What impact will it have on the private sector?
It shows that the economic agenda has never been a priority for our political parties. This is the second instance that the country has missed a complete budget. When the entire industrial sector is on the brink of collapse and investors are unwilling to invest in the country, a full-fledged budget was the need of the hour.
Entrepreneurs always study the budget before making their business and expansion plans. The delay in the budget will affect the entire industrial and business sector. The private sector has suggested to the government to introduce import substitution measures among other issues to narrow the trade deficit; but with the special budget, we can't think of lessening the trade deficit.
What are the major problems that the private sector is facing and which need to be addressed immediately?
Political instability has made the business climate pessimistic and spread a sense of insecurity. As in the previous years, load-shedding and labour problems have made the cost of doing business expensive. This year, we also faced difficulties in getting loans from banks due to the liquidity crunch. Despite the central bank asking commercial banks to finance the industrial sector, no bank is willing to invest. None of the banks wants to bear losses putting money in industry in this business climate.
Mega Bank soft launching today
SANGAM PRASAIN
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JUL 23 - The much-hyped Mega Bank is making its soft launch on Friday. With Nepal Rastra Bank giving its operating license on Sunday, Mega Bank has become the 28th commercial bank in the country.
Mega Bank is the first five-star bank in the country, said its top management. Its headquarters at Kantipath has a grand look. The old British Council building has been given a complete makeover.
With a paid-up capital of Rs. 1.63 billion, the bank has been in the news for its largest promoter base. It has 1,219 promoters who have invested from Rs. 1 million to Rs. 10 million.
Mega Bank is beginning operations at a crucial time when the banking system is slowly recovering from a liquidity crunch. Real estate, one of the most attractive lending destinations for banks in recent times, is cooling down.
Chief executive officer Anil Shah said that Mega Bank would primarily focus on three sectors -- corporate banking, small and medium enterprises (SMEs) and micro finance. The bank has a specialised team for each of these three sectors.
According to CEO Shah, Mega Bank will not go for real estate and margin lending in the first quarter of its operation. "We'll not lend to real estate and do margin lending in the first quarter," he said.
Shah has an ambitious plan to open 10 branches in its first year of operation. According to him, Mega Bank will have a presence in areas where there are no other banks.
Mega Bank has identified SMEs as one of the core areas for banking. Shah, who was one of the people behind the retail banking revolution in Nepal, believes an SME revolution in the banking sector is about to come.
Mega Bank, according to Shah, will go to rural Nepal with technology as the backbone. "Our aim is not only collecting deposits from rural areas but also issuing loans," he said.
‘We will focus on rural areas’
How will Mega Bank be different from the existing ones?
Our business model is different. We'll be focusing on small and medium enterprises (SMEs) and micro finance. Our focus will be rural areas that is still out of banking services.
As a new bank, don't you think it's challenging to go rural?
Yes, it is challenging; but on the other hand, there is also great opportunity. We'll show that rural Nepal has the most potential for the banking industry for the next three-five years.
How many branches will Mega Bank open in its first year of operation?
As per our plan, we'll be opening 10 branches within the current fiscal year. In the next five years, our plan is to establish around 50 branches.
SANGAM PRASAIN
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JUL 23 - The much-hyped Mega Bank is making its soft launch on Friday. With Nepal Rastra Bank giving its operating license on Sunday, Mega Bank has become the 28th commercial bank in the country.
Mega Bank is the first five-star bank in the country, said its top management. Its headquarters at Kantipath has a grand look. The old British Council building has been given a complete makeover.
With a paid-up capital of Rs. 1.63 billion, the bank has been in the news for its largest promoter base. It has 1,219 promoters who have invested from Rs. 1 million to Rs. 10 million.
Mega Bank is beginning operations at a crucial time when the banking system is slowly recovering from a liquidity crunch. Real estate, one of the most attractive lending destinations for banks in recent times, is cooling down.
Chief executive officer Anil Shah said that Mega Bank would primarily focus on three sectors -- corporate banking, small and medium enterprises (SMEs) and micro finance. The bank has a specialised team for each of these three sectors.
According to CEO Shah, Mega Bank will not go for real estate and margin lending in the first quarter of its operation. "We'll not lend to real estate and do margin lending in the first quarter," he said.
Shah has an ambitious plan to open 10 branches in its first year of operation. According to him, Mega Bank will have a presence in areas where there are no other banks.
Mega Bank has identified SMEs as one of the core areas for banking. Shah, who was one of the people behind the retail banking revolution in Nepal, believes an SME revolution in the banking sector is about to come.
Mega Bank, according to Shah, will go to rural Nepal with technology as the backbone. "Our aim is not only collecting deposits from rural areas but also issuing loans," he said.
‘We will focus on rural areas’
How will Mega Bank be different from the existing ones?
Our business model is different. We'll be focusing on small and medium enterprises (SMEs) and micro finance. Our focus will be rural areas that is still out of banking services.
As a new bank, don't you think it's challenging to go rural?
Yes, it is challenging; but on the other hand, there is also great opportunity. We'll show that rural Nepal has the most potential for the banking industry for the next three-five years.
How many branches will Mega Bank open in its first year of operation?
As per our plan, we'll be opening 10 branches within the current fiscal year. In the next five years, our plan is to establish around 50 branches.
Wednesday, July 21, 2010
Tourist arrivals stir hotel industry
SANGAM PRASAIN
KATHMANDU, JUL 21 - With increased tourist arrivals and Nepal Tourism Year 2011 approaching, two new three-star hotels and 64 non-star hotels have started operations across the country.
Three-star hotels Opera Hotel and Ratna Hotel have opened in Bhimdatta, Kanchanpur and Biratnagar respectively. The Opera has 30 rooms while the Ratna has 34 rooms. With these entrants, the number of three-star hotels in the country has reached 19.
Opera has an authorised capital of Rs. 20 million, while Ratna has an investment of more than Rs. 10 million. Opera was licenced in Feb. 2010 and Ratna in Sept. 2009. While other hotels need not acquire a separate licence from the authorities, tourist-based ones are required to have one.
The decade-long insurgency and labour unrest had compelled a number of star hotels to shut down. However, the end of the conflict and Nepal Tourism Year have encouraged the travel trade and hospitality sector.
Krishna Subedi, an official at the Industrial Division, Hotel Section, said that Nepal Tourism Year and simplification of regulations concerning the tourism and hospitality sector had stimulated investors.
Madhav Om Shrestha, executive director of the Hotel Association Nepal (HAN), said that investors had become interested in the hospitality and tourism business. “If the law and order situation improves, it won’t take much time for this sector to take off,” he added.
HAN said that it would be organising promotional campaigns for Nepal Tourism Year in China, France, the UK, Germany and other destinations.
According to the Economic Survey 2009/10, the number of star hotels in the country has reached 97 (excluding Opera). There are 10 five-star hotels (eight of them in the capital), two four-star hotels, 19 three-star hotels, 31 two-star hotels and 37 one-star hotels.
Similarly, there are 639 tourist standard hotels out of which 348 are located in the Kathmandu Valley. Non-star hotels number 647. Altogether, the country has 745 hotels with 14,330 rooms and 28,551 beds.
Year Stars Non-Stars
No Beds No Beds
2004 110 10715 886 28392
2005 110 10715 896 28669
2006 105 9763 502 14497
2007 105 9763 512 14897
2008 96 9320 573 16743
2009(updated) 98 9427 647 19124
(Sources: Economic Survey 2009/10 and MoTCA)
SANGAM PRASAIN
KATHMANDU, JUL 21 - With increased tourist arrivals and Nepal Tourism Year 2011 approaching, two new three-star hotels and 64 non-star hotels have started operations across the country.
Three-star hotels Opera Hotel and Ratna Hotel have opened in Bhimdatta, Kanchanpur and Biratnagar respectively. The Opera has 30 rooms while the Ratna has 34 rooms. With these entrants, the number of three-star hotels in the country has reached 19.
Opera has an authorised capital of Rs. 20 million, while Ratna has an investment of more than Rs. 10 million. Opera was licenced in Feb. 2010 and Ratna in Sept. 2009. While other hotels need not acquire a separate licence from the authorities, tourist-based ones are required to have one.
The decade-long insurgency and labour unrest had compelled a number of star hotels to shut down. However, the end of the conflict and Nepal Tourism Year have encouraged the travel trade and hospitality sector.
Krishna Subedi, an official at the Industrial Division, Hotel Section, said that Nepal Tourism Year and simplification of regulations concerning the tourism and hospitality sector had stimulated investors.
Madhav Om Shrestha, executive director of the Hotel Association Nepal (HAN), said that investors had become interested in the hospitality and tourism business. “If the law and order situation improves, it won’t take much time for this sector to take off,” he added.
HAN said that it would be organising promotional campaigns for Nepal Tourism Year in China, France, the UK, Germany and other destinations.
According to the Economic Survey 2009/10, the number of star hotels in the country has reached 97 (excluding Opera). There are 10 five-star hotels (eight of them in the capital), two four-star hotels, 19 three-star hotels, 31 two-star hotels and 37 one-star hotels.
Similarly, there are 639 tourist standard hotels out of which 348 are located in the Kathmandu Valley. Non-star hotels number 647. Altogether, the country has 745 hotels with 14,330 rooms and 28,551 beds.
Year Stars Non-Stars
No Beds No Beds
2004 110 10715 886 28392
2005 110 10715 896 28669
2006 105 9763 502 14497
2007 105 9763 512 14897
2008 96 9320 573 16743
2009(updated) 98 9427 647 19124
(Sources: Economic Survey 2009/10 and MoTCA)
Monday, July 19, 2010
Passenger traffic at TIA up 24pc in Q1
SANGAM PRASAIN
KATHMANDU, JUL 20 - Passenger movement through Kathmandu’s Tribhuvan Intern-ational Airport swelled by 24 percent in the first quarter of 2010 compared to the same period last year.
According to the TIA Civil Aviation Office, the number of air travellers reached 574,078 in the review period compared to 462,965 in the same period last year.
In January 2010, 25 international airlines carried 188,037 passengers compared to 151,384 in January 2009 carried by 18 international airlines.
In February, the number of international passengers was 180,068 (145,601 in 2009), and in March there were 205,973 international travellers (165,980 in 2009).
Inbound and outbound flight movement went up to 4,372 during this first three months
of 2010 against 3,708 in the same period last year.
Qatar Airlines carried 60,789 passengers during the first quarter. Jet Airways took the second place with 57,664 passengers and Nepal Airlines Corporation (NAC) came third with 54,266 passengers.
Gulf Air carried 52,372 passengers to claim the fourth position while Thai Airways International came fifth with 48,382 passengers. Bhola Bikram Thapa, managing director of President Travel & Tours, said the airline business was becoming more and more competitive. With more international airlines linking Nepal, airfares have also decreased significantly.
“The airline business is all about demand and supply; and as per the growing demand, international airlines are seeing higher passenger occupancy and are doing good business,” he added.
Greater passenger movement has made airlines increase their frequency and new airlines to enter the scene, bringing the number of international airlines serving Nepal to 25. While airlines are revelling in the increased number of air travellers, TIA is having a hard time handling the rising number of flights.
TIA general manager Dinesh Shrestha said that the airport had started operating a new parking bay. TIA now has nine parking bays.
“Increased in the airlines number is positive however it is also challenging to handle the traffic,” he said.
He added that new airlines would not be allowed to operate flights and the existing carriers would not be allowed to add flights in the day due to traffic congestion.
“We have requested them to operate during the evening.”
Major int’l airlines’ passengers’ movement
Airlines 2009(Jan-Mar) 2010(Jan-Mar)
Qatar Airlines 42,587 60,789
Jet Airways 39,010 57,664
Nepal Airlines 56,692 54,266
Gulf Air 63,381 52,372
Thai Airways 46,271 48,382
Air India 43,766 45,634
Air Arabia 29,935 40,434
Etihad Airlines 21,256 31,934
Jet Lite 24,811 27,621
Biman Bangladesh 19,089 26,670
Source: TIA
SANGAM PRASAIN
KATHMANDU, JUL 20 - Passenger movement through Kathmandu’s Tribhuvan Intern-ational Airport swelled by 24 percent in the first quarter of 2010 compared to the same period last year.
According to the TIA Civil Aviation Office, the number of air travellers reached 574,078 in the review period compared to 462,965 in the same period last year.
In January 2010, 25 international airlines carried 188,037 passengers compared to 151,384 in January 2009 carried by 18 international airlines.
In February, the number of international passengers was 180,068 (145,601 in 2009), and in March there were 205,973 international travellers (165,980 in 2009).
Inbound and outbound flight movement went up to 4,372 during this first three months
of 2010 against 3,708 in the same period last year.
Qatar Airlines carried 60,789 passengers during the first quarter. Jet Airways took the second place with 57,664 passengers and Nepal Airlines Corporation (NAC) came third with 54,266 passengers.
Gulf Air carried 52,372 passengers to claim the fourth position while Thai Airways International came fifth with 48,382 passengers. Bhola Bikram Thapa, managing director of President Travel & Tours, said the airline business was becoming more and more competitive. With more international airlines linking Nepal, airfares have also decreased significantly.
“The airline business is all about demand and supply; and as per the growing demand, international airlines are seeing higher passenger occupancy and are doing good business,” he added.
Greater passenger movement has made airlines increase their frequency and new airlines to enter the scene, bringing the number of international airlines serving Nepal to 25. While airlines are revelling in the increased number of air travellers, TIA is having a hard time handling the rising number of flights.
TIA general manager Dinesh Shrestha said that the airport had started operating a new parking bay. TIA now has nine parking bays.
“Increased in the airlines number is positive however it is also challenging to handle the traffic,” he said.
He added that new airlines would not be allowed to operate flights and the existing carriers would not be allowed to add flights in the day due to traffic congestion.
“We have requested them to operate during the evening.”
Major int’l airlines’ passengers’ movement
Airlines 2009(Jan-Mar) 2010(Jan-Mar)
Qatar Airlines 42,587 60,789
Jet Airways 39,010 57,664
Nepal Airlines 56,692 54,266
Gulf Air 63,381 52,372
Thai Airways 46,271 48,382
Air India 43,766 45,634
Air Arabia 29,935 40,434
Etihad Airlines 21,256 31,934
Jet Lite 24,811 27,621
Biman Bangladesh 19,089 26,670
Source: TIA
TIA on high alert after al-Qaeda threat to India planes
SANGAM PRASAIN
KATHMANDU, JAN 22 - Security at Tribhuvan International Airport has been beefed up to foil any possible security risks after the Indian government sensitised all Air India planes operating to and from India's neighbouring countries.
The Indian government move followed 'intelligence inputs that terrorist groups with allegiance to al-Qaeda, Lashker-e-Toiba and Jamat-ul-Dawa were planning to hijack an Air India plane, especially operating to or from SAARC countries.
"We are on high alert in view of a possible hijack plot," said Keshav Raj Khanal, Director General at the Civil Aviation Authority of Nepal (CAAN).
The Home Ministry, however, said there was no formal notice issued in this regard. "We have taken the issue seriously in order to avert any untoward incident," said Jay Mukunda Khanal, the Home Ministry spokesman.
India has increased security at its airports and warned its domestic airlines about a possible hijack attempt by Islamic militant groups following Western intelligence reports, according to Indian officials.
The alert to India's civil aviation ministry warned that flights of state-run Air India and other private carriers could be targeted.
In December 1999, Islamic militants had hijacked Indian Airlines Flight 814 from Kathmandu to Kandahar in southern Afghanistan. It ended when New Delhi released four Islamic militants in exchange for 167 passengers and crew.
Chevrolet's Beat and Hyundai’s Sonata
SANGAM PRASAIN
JULY 01 -
Two new car models -- one a sporty hatchback and the other a sedan -- were launched in the Nepali market on Monday. Vijay Motors, sole distributor of General Motors for Nepal, unveiled the much awaited Chevrolet Beat while Laxmi Intercontinental, one of Hyundai's authorised distributors, rolled out the all-new Sonata.
In Nepal's predominantly small car market, the arrival of the Beat, described by the company as being spirited, stylish, aggressive and bold, has given much needed variety to customers.
The 1199 cc DOHC engine Beat is equipped with automatic climate control, integrated centre stack audio with USB and aux-in port, tilt steering and satin silver roof rails. It is available in three trim levels of 1.2, 1.2LS and 1.2LT.
The Beat, known as the best mileage car in its segment, comes with 14-inch wheels that give better ground clearance, highly spacious interior, USB port, auxiliary port and roof rails.
Available in seven colours -- Olympic White, Linen Beige, Caviar Black, Misty Lake, Moroccan Blue, Green Cocktail and Super Red -- the Beat has an anti-lock braking system which is a rare feature in mini-cars.
As part of the launch offer, Vijaya Motors has provided a special 10-day offer on the Beat that includes free basic accessories such as music system, number plate, speaker and carpet; three-year or 45,000 km free maintenance including engine oil and three-year or 100,000 km warranty. The company will also pay the registration fee and road tax for a year under the special offer.
Hyundai's all-new Sonata adopts its new "fluidic sculpture" design language and boasts outstanding performance with segment-leading safety and fuel efficiency.
Available in two different models -- GL and GLS -- the Sonata delivers powerful performance through its 2.0 litre Theta II MPI (multi point injection) petrol engine. The new Sonata has the highest fuel economy in its segment which stands at 10 km per litre.
The Sonata GL has 16-inch alloy wheels, dual airbags, anti-lock braking system, keyless entry, steering audio control, high mount stop lamp, electric outside mirror with folding auxiliary and USB port and air conditioner.
Along with all the features of the GL, the Sonata GLS has some additional features like 17-inch alloy wheels, amplitude selective damper, electronic stability control, driver and passenger power seat, active headrest, leather seats, auto light control, audio display, rear parking assist system, rain sensor, automatic air conditioner and panoramic sunroof.
The Sonata's electronic stability control (ESC) is designed to help keep your vehicle going right where you want it to in slippery conditions.
Chevrolet Beat
1.2 Rs 1.84 million
1.2 LS Rs 1.92 million
1.2 LT Rs 2.10 million
1.2 LT (with options) Rs 2.27 million
Hyundai Sonata
Sonata GL Rs 4.49 million
Sonata GLS Rs 5.09 million
Beat is a gorgeous looking brand new car
Karl Slym
Karl Slym is president and managing director of General Motors India.
Tell us about the Beat.
The Beat is a gorgeous looking brand new car of General Motors India. Even though it was good global car, we made some changes considering road conditions in Nepal and India. Over the last 18 months, we've made some changes on its suspension to have better ground clearance, also on its transmission and its engine calibration.
How has Nepal been for General Motors?
With the Beat, we now have all the brands under the Chevrolet portfolio in Nepal. Now customers can choose from the Spark, Beat, Aveo U-Va, Aveo, Optra, Captiva to Cruze. As of now, we're at No. 5 in Nepal's automobile market and very pleased with our growth. We've introduced three new cars, the Cruze, Capitva and now Beat. Now, we've to make sure these cars are known in Nepal and get growth in Nepal.
When was the Beat launched in India? How has it been faring in the Indian market?
We launched the Beat in India this January at the Delhi Motor Show. It is doing very well. We manufacture it in our Pune plant. Due to growing demand, we are starting a second shift for its production.
Where is General Motors in India?
As in Nepal, we're at No. 5 in India also. But we're the fastest growing name plate in India. This year, till this date, we've grown by over 120 percent, whereas the Indian automobile industry is growing by 40 percent.
This year, we'll double our sales of last year. We've already sold more than 100,000 Sparks in India. Hence, we're the brand that is making noise in India. And, I don't see why there is any reason we can't make the same kind of noise in Nepal.
Sonata pursues a younger and sensuous image
Rupesh Sharma Bhatta
Rupesh Sharma Bhatta is senior manager, Business Development and Planning at Laxmi Intercontinental.
Tell us about the new Sonata.
The Sonata is our premium product in the car segment. The new Sonata pursues a younger and sensuous image in its interior and exterior profiles. Currently, we have two variants of the Sonata, the Sonata GL and the Sonata GLS.
The GL costs Rs 4.49 million while the GLS costs Rs 5.09 million. With the incorporation of state-of-the art technologies, the new Sonata is expected to further elevate the image of the Hyundai brand.
What is the market share of Hyundai in Nepal? When did Laxmi Intercontinental become associated with Hyundai?
Hyundai vehicles have a substantial presence in the Nepali market. Hyundai is one of the leading brands in the small car segment. Laxmi Intercontinental started selling Hyundai vehicles in Nepal from early 2009.
Has Laxmi Intercontinental made a presence across Nepal? How many showrooms do you have?
Currently, we have two showrooms in the Kathmandu Valley and 11 elsewhere in the country. We have a presence in Pokhara, Narayanghat, Butwal, Bhairahawa, Birgunj, Hetauda, Birtamod, Damak, Biratnagar, Dharan and Dang through our dealers.
What other services are you providing to your customers apart from sales?
We provide 12 free servicings for up to three years and a three-year or 60,000 km warranty. We provide after sales service through our service centres at Basundhara and New Baneshwor. Our service centres are equipped with the latest equipment and trained technicians, and we also maintain an adequate inventory of spare parts.
Political unrest has hit industry
SANGAM PRASAIN
JULY 15 -
Dinesh Shrestha is managing director of Pacific Commercial Company, authorized dealer of Mahindra two-wheelers in Nepal. Shrestha, who is also an executive committee member of the Federation of Nepalese Chambers of Commerce and Industry, has interests in trading, education, manufacturing and health. Sangam Prasain of The Kathmandu Post talked with Shrestha on the business environment and Pacific's business interest. Excerpts:
The Economic Survey 2009/10 shows a rise in vehicle sales. How has your company that deals in Mahindra scooters performed?
There has been a significant rise in the sale of vehicles from four-wheelers to two-wheelers. With ever increasing population and urbanisation, owning a vehicle has become a necessity. As we don't have an efficient mass transportation system in place, people living in urban areas have no choice but to go for private vehicles. This has increased the demand for two-wheelers in major cities including Kathmandu. Hence, business has been good for every automobile company this fiscal year. In our case, we've sold around 1,500 units of Mahindra scooters in the last eight months.
How many models of Mahindra scooters are available in the market?
We are currently selling the four-stroke 125 cc Mahindra Duro, 124.6 cc Mahindra Flyte and Mahindra Rodeo. Though we've recently started selling Mahindra scooters in Nepal, our market share is between 20-25 percent in the overall scooter segment.
Due to safety features, mileage and pickup, demand for scooters has been increasing gradually. Even then, sales are relatively low compared to motorbikes; but we're optimistic that they will go up.
Your group has recently entered the FMCG sector with snacks. How is the new business going, and what are the new products you are planning to launch?
We have recently launched our FMCG products under the Mum's brand in the Nepali market. Mum's brand is a processed food and snacks from India's Amrapali Group. The response so far has been positive. With snacks and processed foods becoming popular in Nepal, we aim to expand and diversify the existing product line. We want to provide customers the finest taste with the highest quality. As the Amrapali Group has recently started juice production, we'll be launching it in the Nepali market in the near future.
The government has failed to present a complete budget once again. What impact will it have on the private sector?
It shows that the economic agenda has never been a priority for our political parties. This is the second instance that the country has missed a complete budget. When the entire industrial sector is on the brink of collapse and investors are unwilling to invest in the country, a full-fledged budget was the need of the hour.
Entrepreneurs always study the budget before making their business and expansion plans. The delay in the budget will affect the entire industrial and business sector. The private sector has suggested to the government to introduce import substitution measures among other issues to narrow the trade deficit; but with the special budget, we can't think of lessening the trade deficit.
What are the major problems that the private sector is facing and which need to be addressed immediately?
Political instability has made the business climate pessimistic and spread a sense of insecurity. As in the previous years, load-shedding and labour problems have made the cost of doing business expensive. This year, we also faced difficulties in getting loans from banks due to the liquidity crunch. Despite the central bank asking commercial banks to finance the industrial sector, no bank is willing to invest. None of the banks wants to bear losses putting money in industry in this business climate.
SANGAM PRASAIN
JULY 15 -
Dinesh Shrestha is managing director of Pacific Commercial Company, authorized dealer of Mahindra two-wheelers in Nepal. Shrestha, who is also an executive committee member of the Federation of Nepalese Chambers of Commerce and Industry, has interests in trading, education, manufacturing and health. Sangam Prasain of The Kathmandu Post talked with Shrestha on the business environment and Pacific's business interest. Excerpts:
The Economic Survey 2009/10 shows a rise in vehicle sales. How has your company that deals in Mahindra scooters performed?
There has been a significant rise in the sale of vehicles from four-wheelers to two-wheelers. With ever increasing population and urbanisation, owning a vehicle has become a necessity. As we don't have an efficient mass transportation system in place, people living in urban areas have no choice but to go for private vehicles. This has increased the demand for two-wheelers in major cities including Kathmandu. Hence, business has been good for every automobile company this fiscal year. In our case, we've sold around 1,500 units of Mahindra scooters in the last eight months.
How many models of Mahindra scooters are available in the market?
We are currently selling the four-stroke 125 cc Mahindra Duro, 124.6 cc Mahindra Flyte and Mahindra Rodeo. Though we've recently started selling Mahindra scooters in Nepal, our market share is between 20-25 percent in the overall scooter segment.
Due to safety features, mileage and pickup, demand for scooters has been increasing gradually. Even then, sales are relatively low compared to motorbikes; but we're optimistic that they will go up.
Your group has recently entered the FMCG sector with snacks. How is the new business going, and what are the new products you are planning to launch?
We have recently launched our FMCG products under the Mum's brand in the Nepali market. Mum's brand is a processed food and snacks from India's Amrapali Group. The response so far has been positive. With snacks and processed foods becoming popular in Nepal, we aim to expand and diversify the existing product line. We want to provide customers the finest taste with the highest quality. As the Amrapali Group has recently started juice production, we'll be launching it in the Nepali market in the near future.
The government has failed to present a complete budget once again. What impact will it have on the private sector?
It shows that the economic agenda has never been a priority for our political parties. This is the second instance that the country has missed a complete budget. When the entire industrial sector is on the brink of collapse and investors are unwilling to invest in the country, a full-fledged budget was the need of the hour.
Entrepreneurs always study the budget before making their business and expansion plans. The delay in the budget will affect the entire industrial and business sector. The private sector has suggested to the government to introduce import substitution measures among other issues to narrow the trade deficit; but with the special budget, we can't think of lessening the trade deficit.
What are the major problems that the private sector is facing and which need to be addressed immediately?
Political instability has made the business climate pessimistic and spread a sense of insecurity. As in the previous years, load-shedding and labour problems have made the cost of doing business expensive. This year, we also faced difficulties in getting loans from banks due to the liquidity crunch. Despite the central bank asking commercial banks to finance the industrial sector, no bank is willing to invest. None of the banks wants to bear losses putting money in industry in this business climate.
Sunday, July 18, 2010
Paddy sowing recorded at a meager 40pc
SANGAM PRASAIN
KATHMANDU, JUL 19 - With the rain god being more favourable this year, paddy plantation in the country has been recorded at 40 percent even with the main planting season in the Tarai yet to start.
The preliminary estimate of the Ministry of Agriculture and Cooperatives (MoAC) said that plantation this season had been good compared to the same period last year.
Dr. Hari Dahal, spokesperson at the MoAC, said that paddy plantation in the Tarai had just started, and in response to the current monsoon, the plantation rate would increase in the months of August and September.
Of the total 3.1 million hectares of arable land, paddy plantation occupies over 1.5 million hectares.
The Tarai, which is a major paddy producing region, has 71 percent of the total arable land. Similarly, the hill region has 25 percent and the high hill region a 4 percent share of the total arable land.
This plantation season, paddy plantation in Jhapa has been recorded at 33,600 hectares out of the total 96,161 hectares. Morang has recorded
over 31,000 hectares out of 88,000 hectares and Sunsari has recorded 25 percent out of its total 53,600 hectares, Dahal said.
Similarly, plantation in Siraha has been recorded at 10 percent of its total 70,000 hectares and Sarlahi with 12 percent of its total 68,000 hectares. Plantation in Kapilvastu, Rautahat and Dhanusha has been recorded at 10 percent, 15 percent and 20 percent respectively.
According to the ministry, paddy plantation in the Central Development Region has been recorded at 39 percent, 25 percent in the Eastern Development Region, 49 percent in the Western Development Region, 52 percent in
the Mid-Western Development Region and 48 the percent in Far-Western Development Region.
Plantation has been recorded at cent percent in Rolpa, Dolpa and Humla. The average paddy plantation in the Tarai, hills and high hills has been recorded at 33 percent, 57 percent and 62 percent respectively. The Kathmandu Valley
has recorded 80 percent paddy plantation.
Production of paddy declined by 11 percent last year due to a long drought that delayed paddy planting. Output dropped to 2,716 kg per hectare from 2,907 kg per hectare recorded last year.
Paddy plantation
Region Plantation %
Eastern 25
Central 39
Western 49
Mid-Western 52
Far-Western 48
Wednesday, July 14, 2010
Arrivals up, stay duration down
SANGAM PRASAINKATHMANDU, JUL 15 - Tourist arrivals in Nepal increased by 1.9 percent in 2009, however, their average length of stay has declined.
According to the Economic Survey 2009/10, the average length of stay has gone down from 11.8 days in 2008 to 11.6 days in 2009.
Tourists had started staying longer in the country in 2006 following the comprehensive peace accord ending the Maoist conflict. Since then, however, it has been decreasing constantly.
Tourism entrepreneurs say that tourist stay in Nepal has been affected by political uncertainty, strikes and bandas. Hotels too suffered labour unrest in 2009 forcing visitors to cut short their Nepal tour.
“One of the reasons behind the drop in tourist stay could be the global recession which prompted vacationers to opt for shorter holidays,” said Raju Bikram Shah, general manager of the Shangri-La Hotel.
“We didn’t see a drastic change in tourist stay,” said David Yonjan of Yeti Travels. “The length of stay depends on the tour package.”
Tourist entrepreneurs are hopeful of the length of stay increasing with the number of tourists coming for recreation growing. As per the Economic Survey, 34 percent of the arrivals in 2009 came for recreation compared to 29.6 percent in 2008. Tourism entrepreneurs say that if the political situation remains stable, the trend of taking longer holidays could increase.
“The significant rise in the number of visitors coming for recreation is a result of the increasing options for leisure activities in Nepal,” said Prachanda Man Shrestha, chief executive officer of the Nepal Tourism Board. According to the Economic Survey, there has been a marginal increment in the number of visitors coming for pilgrimage from 9 percent in 2008 to 10.4 percent in 2009. Tourists putting down trekking and mountaineering as their purpose of visit amounted to 20.9 percent in 2009.
Likewise, 4.7 percent came for trade, 7.6 percent for formal visit and 1.4 percent for meetings and seminars.
Declining stay
Year 2009 2008 2007
Days 11.60 11.78 11.96
Purpose of visit
Year 2009 2008 2007
Recreation 34.0 29.6 30.6
Trek/Mountaineering 20.9 21.0 19.20
Pilgrimage 10.4 9.0 10.0
Trade 4.7 4.6 4.6
Formal visit 7.6 8.6 8.6
Meeting/seminar 1.4 1.4 1.4
Other purposes 15.6 19.9 19.5
Undefined purposes 5.0 5.9 6.3
Tuesday, July 13, 2010
'A peanut is not a meal’
SANGAM PRASAINKATHMANDU, JUL 13 -
The business community and economists have pointed out that delay in presenting a full-fledged budget will hinder the country’s economic growth and private sectors’ investment plans.
At an interaction on ‘Delay in Budget and its Impact in Country’s Economy’, organised jointly by Federation of Nepalese Chambers of Commerce and Industry (FNCCI) and Society of Economic Journalists of Nepal (SEJON) on Tuesday, economists said that disturbances in regular budget presentation cycle would ultimately hamstring the overall economy.
At a time when country was looking for a full-fledged budget to address bottlenecks in the economy, the government’s special budget will widen existing trade deficit, constrain revenue mobilisation and hit private sector confidence, said economists. They pointed out that the political leadership had failed to realise the country’s economic agenda and priorities.
“Investors are in a dilemma whether to invest or not as there is no concrete programme and policy of the government in the special budget,” said Kush Kumar Joshi, president of the FNCCI. Joshi said that trade deficit would further widen in the next fiscal year.
“The private sector has demanded stimulus packages to address the growing trade deficit issue, industrial insecurity and load-shedding, all in vain,” added Joshi.
Economist Biswombhar Pyakurel described the advance budget as too meagre. He said that the public distribution system had become a joke. “No political parties is serious about the country’s economic agenda,. This will adversely impact the country’s economy in the long run,” he added. This is the second time in three years that a full-fledged budget has been delayed.
Economist Dilli Raj Khanal said that if the political class fails to address the country’s economic agenda, a crisis would erupt. “There is need for political consensus to address the deepening problem,” said Khanal. Economist Chiranjivi Nepal said that as the country is witnessing a huge balance of payment deficit and decline in foreign currency reserves, delay in full-fledged budget would worsen the economic crisis. “It is unfortunate that no political party is serious about economic issues,” he lamented.
Finance secretary Rameshwor Khanal said that investment would decrease if the economy does not stay stable. “Delay in budget announcement will discourage both domestic and international investors, and without investment we cannot have economic growth,” he said.
He said that the targeted economic growth for the next fiscal could be affected. “The government plan to provide incentives and facilities to production and agriculture sector for import substitution and accomplishing the three-year plans will also be affected,” he said.
Monday, July 12, 2010
Nepal 14th in tourists’ beeline
Nepal ranked No. 14 in foreign visitor arrivals with 87,487 Nepali tourists travelling to India by air in 2009, according to the Indian Tourism Ministry.
Nepali outbound to India was greater than Indian inbound to Nepal last year in terms of air travellers. According to the Nepal Tourism Board (NTB), 86,696 Indian holidaymakers arrived in Nepal by air in 2009. CEO of NTB Prachanda Man Shrestha, however, said that Nepal was not in a deficit position as around 300,000 Indian tourists visit the country overland annually.
Tour operators cited three reasons for the substantial rise in the number of Nepali visitors to India — popularity of pilgrimage destinations, growing trend of using India as a transit point for onward flights to Europe and the US due to cheap tickets, and rising frequency of guardians visiting their children enrolled in Indian schools Sudhir Upadhyay, managing director of Ama Travels whose main business is operating tours to India, said that more medium-class Nepalis were travelling to India as tourists. Earlier, only high-income people used to visit India.
C.N. Pandey, managing director of Samrat Travels & Tours, said political instability had forced large numbers of Nepali students to pursue their studies in India.
Economy Survey 2009/10
"Target bar was set too low, scoffs study"
The Economic survey released on Sunday shows the pace of growth in both the agriculture and non-agriculture sector remained slow.
According to the survey, growth of non-agriculture sector is expected to grow by 5.1 percent. Growth in sub-sectors like mining and quarries, industry, gas and water, construction, hotel and restaurant, financial intermediation, real estate, leasing, and commercial services pushed the growth of non-agriculture sector to 5.1 percent.
In the non-agriculture sector, construction is estimated to grow at 6.6 percent. The sector registered good growth due to rapid construction of homes, residential apartments and office buildings in Kathmandu valley and other urban areas.
Growth of commercial services like real estate, leasing and other services that had nominal growth of 1.8 percent in the previous fiscal year is estimated to grow by 4.9 percent this year.
Among the sectors that recorded lower growth in 2009-10 in comparison to 2008-09 are agriculture and forestry, fisheries, wholesale and retail trade, transport, communication and warehousing, public administration and defense , education, health and social works, and other community, social and personal services.
The growth of agriculture sector that has the biggest weightage in the total gross domestic product (GDP), according to the survey would be limited to 1.2 percent mainly due to decline in production of paddy and maize.
According to the survey, cereal production decreased
to 77,62000 metric tonnes against 81,15000 metric tonnes last fiscal. The production of paddy and maize decreased while production of wheat,
barley and millet witnessed growth. The cultivation area for cereal production also shrank to 3383,000 hectares from 3418,000 hectares.
Among cash crops, the total production grew to 5224,000 metric tonnes this year from 4931000 metric tonnes last year in the expanded cultivation of 458000 hectares of land from 434000 hectares. The production of sugarcane, oilseeds (telahan), potatoes and jute increased while production of tobacco was constant this year .
Among other cash crops, pulses (dalahan), fruits and vegetables all saw a growth and their total production grew to 3968000 metric tonnes from the 3695000 metric tonnes last year.
The country saw growth in production of meat, dairy products, eggs and fish last
year as well. Irrigation facility expanded to additional 13119 hectares of land although the facility was expanded by just 2612 hectares last year.
The manufacturing sector is expected grow by 2.6 percent this year as compared to 1 percent negative growth last year.
The production of noodles increased to 42,000 metric tonnes from 40669MT.
Tea production grew to 16,000MT from 15506MT, liquor production grew to 12,000MT from 11907Mt, cigarettes, shoes, soaps, cements and industrial equipments all saw a growth.
The number of hotels went up to 744 this year from 669 last year. Star hotels grew by just 1 to 97, while non-star hotels grew to 647 from 573.
While the number of hospitals remained unchanged
at 102, the number of health posts went up to 1176 from 676 last year, but the number of sub-health posts decreased to 2617 from 3114 last year.
The number of manpower in the health sector also could not grow much as it reached 92181 from 92010.
The survey also revealed that in total, roads expanded to 20138 km from 19209 km in the road expansion year. Black-topped roads expanded to 6304 km from 5859km.
Gravelled roads expanded to 4832 km from 4717km and fair weather roads expanded to 9002km from 8635 km.
Sectors that saw growth
• Mining and quarrying (from 0.7 percent to 4.2 percent)
• Industry (from -1.0 percent to 2.6 percent)
• Electricity, gas and water (from -0.9 percent to 0.5 percent)
• Construction (from 0.9 percent to 6.6 percent)
• Hotel and restaurant (from 3.0 percent to 8.5 percent)
• Financial intermediation (from 1.5 percent to 1.6percent)
• Real estate, rent, professional services (1.7 percent to 4.8percent)
Sectors whose growth declined
• Agriculture and forestry (from 3.0 to 1.1 percent)
• Fisheries (from 5.7 percent to 5.3 percent)
• Wholesale and retail trade (from 5.9 percent to 5.6 percent)
• Transport and communication (from 7.6 percent to 6.5 percent)
• Public administration and defense (from 7.3 percent to 4.2 percent)
• Education (from 11.3 percent to 6.5 percent)
• Health and social works (from 11.2 to 5.6 percent)
Hefty tax weighs airlines down
SANGAM PRASAIN
KATHMANDU, JUL 11 -
At an interaction on 'Existing Issues of Nepalese Aviation Sector', here on Sunday, the umbrella organisation of private airline companies, the Airlines Operators Association of Nepal (AOAN), said heavy lease tax, landing charge, parking charge,
navigation charge, housing charge and other taxes levied on this sector has affected the efficiency and services, adversely affecting passengers.
The AOAN has suggested the government consider the issue in the upcoming budget so as to make the sector sustainable in the long run and one that would deliver more efficient and competitive services.
It also suggested the Civil Aviation Authority of Nepal (CAAN), the regulatory body which is preparing to revise the existing airfares, make the revision on a “scientific basis.” The airlines have not revised the airfare since 2006. In 2006, the aviation fuel was Rs. 53 per litre, which now costs over Rs. 75 per litre.
The airlines are also suffering from extra Value Added Tax As per the VAT Act 1995, airlines are not allowed to raise the tax from passengers. However, the government imposes VAT on every spare part and other materials imported. “This is totally impractical as per the international theory,” said Yog Raj Kandel, general manager of Simrik Air, presenting a paper on 'Existing Issues of Nepalese Aviation Sector'.
According to him, the government's rigid lease tax has also affected the growth of private airline companies.
No aircraft has been leased for the past 7-8 years because of the 10 percent lease tax levied on leasing an aircraft.
The lease tax was 3 percent before the government revised the Income Tax Act in 2001. The same tax is 1 percent in India. “This clearly shows that the private airline services in Nepal cannot compete with other international airlines,” Kandel said.
Similarly, over 50 percent tax on ground supporting equipment, tools catering equipment and other imported tools has also led to the airlines having to bear a high operating cost. Kishore Thapa, the newly-appointed secretary at the Ministry of Tourism and Civil Aviation (CAAN), said the recommendation made by the AOAN will be discussed.
He said the aviation industry needs to deliver efficient services so as to be awarded tax incentives and other financial packages.
Rameshwar Thapa, president of AOAN, said Nepali private airlines have started cross-border flights, which is boosting the aviation industry.
Biz sector slams special budget
SANGAM PRASAIN
KATHMANDU, JUL 12 -
Economists and business leaders on Monday said that the ‘special budget’ presented on Monday will not address problems the economy is currently facing. They also regretted the fact that the budget, once again, became a prey to political uncertainties.
Economists and business leaders said the ‘special budget’ will affect the investment and employment opportunities in the next fiscal year. It will also hit the government target of reducing poverty, they added.
Until the Appropriation Bill for the next fiscal year is presented in the legislature parliament, the government has to manage expenditure and income through the ‘special budget.’
When will the full-fledged budget come? It all depends on how quickly major political parties resolve the deadlock over the formation of a new government. Former Finance Minister Prakash Chandra Lohani told the Post that the compulsion to bring in the ‘special budget’ shows the major political parties are not serious about the economy.
“Constitution making has been delayed, corruption has increased and now the government fails to present a full-fledged budget. It indicates we’re gradually moving towards a failed state,” Lohani said.
Economist Biswombhar Pyakurel said a recent study of South Asian countries shows Nepal as an example where low political will and instability has marred the economic growth. “If the government fails to expedite development expenditure, economic activities will slow down affecting the poor,” said Pyakurel.
The private sector that was looking for incentives in the export sector through a full-fledged budget is also disappointed with the government presenting the ‘special budget.’ The special budget has failed to address the problems the economy is currently facing. The private sector that contributes 70 percent in investment is worried about the situation that forced the presentation of the ‘special budget.’
The heads of two apex bodies of the Nepali private sector, Kush Kumar Joshi and Binod Kumar Chaudhary lamented that political leadership is yet to realise the grave consequences of not coming up with a full-fledged budget.
Joshi, the president of Federation of Nepalese Chambers of Commerce and Industries, bluntly termed the ‘special budget’ as a move to provide salaries to civil servants. “We cannot term it a budget as it has no policies and programmes,” he told the Post.
“Once again, the country’s development process and economy has taken a backseat,” said Chaudhary, the president of Confederation of Nepalese Industries (CNI). “Economic development can’t be accelerated through a special budget.”
No chill pill, for sure
"Govt presents Rs 110.21 b special budget"
KATHMANDU, JUL 12 -
For the second time in three years, there is a special budget, thanks to political wrangling. The government has managed a way out for regular government expenditure but development and expansion of economy will be hit.
Even Finance Minister Surendra Pandey regretted that the budget was a victim of political tussles.
“It is not a happy situation,” said Pandey on Monday. He presented a special budget of Rs 110.21 billion, tabling the ‘Bill Empowering Government to Withdraw Money from Consolidated Fund’ to carry out regular services in the coming fiscal year.
The bill will give the government authority to incur expenditure up to one-third of the total revised expenditure of the current fiscal year from the consolidated fund until the Appropriation Bill, 2010 is tabled in the Legislature-Parliament.
Of the Rs 110.21 billion, the government proposes Rs 31.40 billion for chargeable expenditure (that does not need parliamentary approval) for the whole fiscal year 2010-11 and Rs 78.81 billion for expenditure appropriated from the consolidated fund which will amount to one-third of the actual expenditure of the current fiscal year.
Economists and business leaders say the special budget will affect investment and employment opportunities in the new fiscal year. With GDP growth declining and major economic indicators including balance of payment bleak, the special budget was not the right prescription. “This is not a budget,” said Kush Kumar Joshi, president of Federation of Nepalese Chambers of Commerce and Industry. “It will reverse economic development.”
Pandey acknowledged, “The economy will suffer if the formation of a government is delayed,” said Pandey.
“A full fledged budget is a must.” Delay in full-fledged budget will have multiple impact on the economy. It will not only hit the growth of revenue collection but also delay investment and expansion plans of the private sector. As no changes can be made in tax structure, revenue collection will be hit.
Also hit will be new employment opportunities that the annual budget would provide through new programmes. “From government expenditure to foreign grants, loans and funds for multi-year contracts, all will be affected,” said Minister Pandey.
Tuesday, July 6, 2010
Import substitution a must, says govt
SANGAM PRASAIN
KATHMANDU, JUL 03 -
Finance Secretary Rameshwor Khanal on Saturday said the measure would substitute imports worth Rs. 25-30 billion. Nepal imports 55,000 tonnes meat annually while import of other agro products is high and which has triggered BOP deficit to some extent.
“We have low competitive edge products compared to neighboring countries. In this situation, substituting import of these products will be viable as we cannot think of exporting products that reduce the ballooning trade gap immediately,” he said.
He said that the government would also take some tough measures on petroleum products (PoL) and hike electricity tariff in the upcoming budget. “We have to take these measures keeping in mind the increasing demand for PoL products as the government will not be able to subsidize the products that account for the huge BOP trade,” Khanal said at a pre-budget discussion organised by Society for Economic Journalists of Nepal (SEJON).
The government will also be harsh on electricity tariff. If the same tariff remains, the Nepal Electricity Authority (NEA), which is reeling under a huge loss, could go bankrupt. “This will affect people for a short time but will be beneficial and sustainable,” he said.
The upcoming budget has also adopted measures to substitute some import based industrial and agro products by prioritising their production and encouraging them in the home country. Among the industrial products, import of cement and dairy products would be substituted by domestic production. Secretary Khanal said that by mid-January there will be an additional 12,000 tonnes cement production in the country, which will help substitute import of cement.
“If one more big dairy processing industry is established, it will help import substitution,” Khanal said adding that the government was committed to provide all facilities regarding roads and electricity in those industries.
The government is planning to bring the advance budget by the next week. “A full-fledged budget will be announced by the national consensus government,” said Khanal quoting the Prime Minister who resigned recently.
Khanal said the development budget will take a slow growth path due to lack of political commitment. Delay in budget will not hamper the monetary policy and other issues related to it, but it will severely impact the development budget.
Garment exports sink to zero
SANGAM PRASAIN
KATHMANDU, JUL 05 -
Statistics of the Garment Association of Nepal (GAN) show that garment exports in the first six months of 2010 recorded a decline of 38.9 percent. According to GAN, exports to the US amounted to US$ 2.19 million during the review period. Exports during the first six months of 2009 were worth US$ 3.59 million.
Exports to the US have been consistently declining since the elimination of quotas in global apparel trading in 2005. The decline in exports to the US in the last four years has pushed Nepal's garment industry to the verge of collapse.
Even though exports to the US had grown by around 25 percent in January 2010, the last five months have been dismal. According to GAN, exports have nosedived by 90 percent during the period 2005 to 2009.
Garment manufacturers are not surprised by this massive decline. "This is not a new story for the garment industry," said GAN past president Kiran Sakha. "Manufacturers and exporters both have lost hope due to the constant labour unrest and bandas that have crippled production."
"This was bound to happen," said trade expert Ratnakar Adhikari. He added that Nepali readymade garments had been losing competitiveness in the US market. "Garment manufacturers and exporters should look to other markets including the EU rather than relying on the US market only," said Adhikari.
With Nepal not being able to get duty-free access for its readymade garments in the US market, the only hope is the Trade and Investment Framework Agreement (TIFA) which Nepal and the US are to sign in the near future. TIFA has provisions that will help Nepal to gain favourable market access in the US.
Team hails itself for scaling Yala Peak
SANGAM PRASAIN
KATHMANDU, JUL 07 - A team of civil servant mountaineers are raring to have a crack at the world's highest peak after scaling the 5,550-m Yala Peak in Langtang as a warm-up exercise.
The team also wants to help make Nepal Tourism Year 2011 a success through the participation of civil servants, said Lilamani Poudel, secretary at the Office of the Prime Minister.
“The Everest expedition by civil servants will help to boost their morale besides helping to gather information regarding mountain tourism,” said Kishore Thapa, secretary at the Ministry of Tourism and Civil Aviation.
The adventurous officials underwent extensive training at the Mountaineering Training Foundation last week under the guidance of seasoned climbers.
The government has allocated Rs. 3 million for the warm-up climb and Rs. 30 million for the Everest expedition.
Ang Tshering Sherpa, immediate past president of the Nepal Mountaineering Association (NMA), said that the country had tremendous potential in mountaineering tourism, and that the Everest expedition would enlighten the government officials on the kind of programmes and policies needed to boost the sector.
Pemba Gyalzen Sherpa, chief instructor to the expedition, said that the performance of the civil servants on Yala Peak had been more encouraging than he had expected.
“I had estimated that 60 percent of the team would be able to get to the top, but everybody made it,” he said. He added that Everest would be much tougher and that success would be determined by weather conditions.
Petrol, diesel dearer, LPG spared
SANGAM PRASAIN
Petrol now costs Rs. 85 per litre and diesel and kerosene both Rs. 65.50 per litre. Prices are lower by Rs. 1.50 per litre in the Tarai. With the hiked rates, NOC will make a monthly profit of Rs. 79.9 million, said deputy managing director Bachhu Kumar Kafle.
He added that NOC makes a profit of Rs. 5 per litre on petrol, Rs. 0.76 on diesel, Rs. 8 on kerosene and Rs. 16 on aviation fuel. However, NOC still incurs a loss of Rs. 130 on a cylinder of LPG, Kafle said. NOC said it would not hike the price of LPG immediately. “The government has provided Rs. 800 million to adjust the price of LPG, and increased profits on gasoline will help offset the losses incurred in cooking gas,” said Purushottam Ojha, secretary at the Ministry of Supplies.
NOC said its losses in the current fiscal had reached Rs. 1.16 billion. The company also has outstanding loans of Rs. 10.74 billion.
With the country crippled by a petroleum shortage for more than a week, NOC hiked the prices saying that the deficit had been caused by India Oil Corporation’s (IOC) move to cut deliveries by 50-60 percent as NOC had fallen behind in its payments.
Kafle said they revised the prices in line with the recent hike made by IOC. The Indian supplier had revised its prices on July 1 resulting in monthly losses of Rs. 100 million to NOC. He added that it had become necessary to raise the rates as fuel was cheaper in Nepal and this was encouraging smuggling to India. “This revision has not been induced by international prices. We have been forced to hike the rates as we were short of cash to import fuel,” Kafle said.
According to NOC, it imported 957,711.91 kl of petroleum products in the first 11 months of the current fiscal including 553,117 kl and 147,189 kl of diesel and petrol respectively, 128,296 tons of LPG and 76,008 kl of aviation fuel.
Revised Rates
Year Petrol Diesel Kerosene
(Rs/Lt) (Rs/Lt) (Rs/Lt)
2003 56 33.50 27
2004 62 41 36
2005 67 46 39
2006 67 52.50 47.65
2007-Oct 73.50 56.25 51.20
2007-Dec 80 56.25 51.20
2008 100 70 65
2008-Dec 85.50 60.50 60.50
2009 77.50 57.50 57.50
2010-Feb 77.50 59 59
2010-Mar 80 61 61
2010-Apr 82 63 63
2010-July 85 65.50 65.50
Source: NOC
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