SANGAM PRASAIN
KATHMANDU, MAR 23 -
The government is in the final stage of endorsing the guidelines for the meetings, incentives, conventions and exhibitions (MICE) incentive packages for the private sector aimed at boosting the Nepal Tourism
Year campaign, a government official said.
The government has also announced a grant of Rs 500,000 to any organiser holding meetings, seminars, workshops or interaction programmes involving at a time more than 100 foreign passport holders entering Nepal by air. The incentive will be provided within seven days of the completion of such programmes on submission of evidence and relevant documents.
According to a Finance Ministry official, a draft of the MICE guidelines has been forwarded to the cabinet for final approval. “The guidelines prepared by the Tourism Ministry have incorporated provisions for submitting a record of the programmes, invitations, visitor figures and copies of IDs and passports of participants, among other evidence, so as to be eligible to receive the incentive,” said Murari Bahadur Karki, joint secretary at the Tourism Ministry.
“The Finance Ministry forwarded the draft to the cabinet last week,” said a Finance Ministry official. The Tourism Ministry had sent the draft to the Finance Ministry a month ago. The government has announced that the incentive programme will run till the end of Nepal Tourism Year.
The government’s readiness to promote MICE tourism has encouraged tourism entrepreneurs. Hoteliers said that they had been receiving more corporate clients these days. International airlines and hotels have reported healthy bookings for the coming peak tourist season. They said that MICE programmes are also increasing compared to past years.
As of now, only Global Asia Tours and Travels has applied for the incentive. Entrepreneurs have criticized the delay in issuing the guidelines as three months have already passed since the announcement.
Mahendra Raj Poudel, managing director of Global Asia, said that it organized an international meet at the Soaltee. According to him, 163 visitors from different countries attended the programme.
Tourism entrepreneurs have said Nepal has a good chance of winning international bids for MICE, a high potential tourism segment, because of its scenic allure and improving political climate. They said that MICE tourism brings high-yield tourists and has no seasonal bottlenecks. Hoteliers said that among the events held under MICE, professional and business meetings accounted for 50 percent; product launches 35 percent, fashion shows 10 percent and other events 5 percent in the previous year. Also, workshops, trainings, interactions and cultural programmes made up most of the domestic MICE events.
In 1998, Nepal received 463,684 visitors with 24 percent of them preferring trekking, mountaineering, rafting and jungle safari as their purpose of visit while 11 percent put down business, official and conference as the purpose.
However, the conflict and deteriorating security situation took a heavy toll on tourist arrival and MICE was affected, tourism entrepreneurs said. MICE tourism was good in 2007 and 2008; it slumped in 2009 due to the global economic crisis but bounced back in 2010.
Tuesday, March 22, 2011
Nepal well positioned to catch MICE
SANGAM PRASAIN
KATHMANDU, MARCH 12, 2010-
Tourism entrepreneurs have said that Nepal has a good chance of winning international bids for MICE (meetings, incentives, conventions and exhibitions), a high potential tourism segment, because of its scenic allures and an improving political climate.
They said that MICE tourism brings high-yield tourists and has no seasonality bottlenecks. At a time when hotel entrepreneurs are worried by low occupancy rates, MICE can be the answer, they added.
In addition to international conventions, resort destinations like Nagarkot, Dhulikhel, and Godavari are hosting domestic conferences which shows that MICE offers good business prospects.
Hoteliers said that among the events held under MICE, professional and business meetings accounted for 50 percent, product launches 35 percent, fashion shows 10 percent and other events 5 percent.
Similarly, workshops, trainings, interactions and cultural programmes made up most of the domestic MICE events.
Nepal Tourism Year 2011 implementation committee coordinator Yogendra Sakya said that international conferences, meetings and sports and adventure activities would be major products during the upcoming national campaign.
“We don’t have a new product immediately, but the focus will be on international events and activities through business perspective plans during 2010 and 2011,” he added.
Marketing manager of the Hotel Yak & Yeti Bharat Joshi said that they expected a 10 percent increase in the MICE segment. In 2009, 130 international programmes were held at the Yak & Yeti. A total of 7,830 persons participated in different conferences, product launches and other activities in 2009 yielding Rs. 40.5 million in revenue. Similarly, there were 725 domestic programmes in which 8,695 persons participated.
In 1998, Nepal received 463,684 visitors with 24 percent of them stating trekking, mountaineering, rafting and jungle safari as their purpose of visit while 11 percent out down business, official and conference purposes.
The conflict and deteriorating security situation took a heavy toll on tourist arrivals and MICE was similarly affected, tourism entrepreneurs said.
Subodh Rana, former president of the Nepal Incentives and Convention Association that collapsed in 2001, said that MICE started recovering after 2007.
MICE tourism was good in 2007 and 2008, however, it slumped in 2009 due to the global economic crisis.
Tourism experts claim that the revenue generated from MICE is almost double that from other tourism segments.
KATHMANDU, MARCH 12, 2010-
Tourism entrepreneurs have said that Nepal has a good chance of winning international bids for MICE (meetings, incentives, conventions and exhibitions), a high potential tourism segment, because of its scenic allures and an improving political climate.
They said that MICE tourism brings high-yield tourists and has no seasonality bottlenecks. At a time when hotel entrepreneurs are worried by low occupancy rates, MICE can be the answer, they added.
In addition to international conventions, resort destinations like Nagarkot, Dhulikhel, and Godavari are hosting domestic conferences which shows that MICE offers good business prospects.
Hoteliers said that among the events held under MICE, professional and business meetings accounted for 50 percent, product launches 35 percent, fashion shows 10 percent and other events 5 percent.
Similarly, workshops, trainings, interactions and cultural programmes made up most of the domestic MICE events.
Nepal Tourism Year 2011 implementation committee coordinator Yogendra Sakya said that international conferences, meetings and sports and adventure activities would be major products during the upcoming national campaign.
“We don’t have a new product immediately, but the focus will be on international events and activities through business perspective plans during 2010 and 2011,” he added.
Marketing manager of the Hotel Yak & Yeti Bharat Joshi said that they expected a 10 percent increase in the MICE segment. In 2009, 130 international programmes were held at the Yak & Yeti. A total of 7,830 persons participated in different conferences, product launches and other activities in 2009 yielding Rs. 40.5 million in revenue. Similarly, there were 725 domestic programmes in which 8,695 persons participated.
In 1998, Nepal received 463,684 visitors with 24 percent of them stating trekking, mountaineering, rafting and jungle safari as their purpose of visit while 11 percent out down business, official and conference purposes.
The conflict and deteriorating security situation took a heavy toll on tourist arrivals and MICE was similarly affected, tourism entrepreneurs said.
Subodh Rana, former president of the Nepal Incentives and Convention Association that collapsed in 2001, said that MICE started recovering after 2007.
MICE tourism was good in 2007 and 2008, however, it slumped in 2009 due to the global economic crisis.
Tourism experts claim that the revenue generated from MICE is almost double that from other tourism segments.
Monday, March 21, 2011
quake-hit japan to be less visible in Nepal
SANGAM PRASAIN
KATHMANDU, MAR 22 -
Nepal’s tourism has suffered a direct hit as a result of the devastating earthquake and tsunami in Japan. Travel trade entrepreneurs say that they are receiving increasing numbers of cancellations from Japanese tourists following the twin disasters. The tourism industry has received more than 1,000 cancellations from Japan so far.
March, April and May are the most popular months for Japanese visitors in Nepal, and the cancellations during the peak season mean business will be hurt bad. Travel traders say Japanese tourists are among the highest spenders in Nepal and they stay over a week.
According to official tourism statistics, Japan is the sixth largest source of air tourists for Nepal after India, China, the US, the UK and France. Nepal hosted 23,272 Japanese tourists in 2010, among whom 20,458 came by air.
“The unexpected cancellation of tours has hit our business,” said Shibesh Shrestha, managing director of C&K Nepal Travels and Tours, whose main clients are Japanese tour groups.
According to him, his agency has received 250 cancellations for March alone. “Although there were few tourists coming from Osaka, there are more cancellations from Tokyo and Hokkaido. All the bookings from Sendai have been cancelled,” said Shrestha.
The cancellations from Japan are expected to affect Nepal’s target of welcoming one million tourists in 2011. The Nepal Tourism Year implementation committee has planned to increase Japanese arrivals by 20 percent. Nepal received 3,755 Japanese tourists in the first two months of 2011 compared to 3,528 in the same period last year.
Along with tour operators, hotels are also seeing cancellation of reservations by Japanese tourists. “We received cancellations of 300 room nights within a week,” said Bharat Joshi, director, sales and marketing at the Hotel Yak & Yeti. He said that all the hotels were receiving cancellations, and that 600 room nights were expected to be cancelled this season.
“Japanese tourists are major customers for hotels spending over US$ 90 per day on accommodation,” Joshi said. He added that cancellations from Japan were expected to result in a drop in the Yak & Yeti’s business by 5 percent.
The Everest Hotel has reported that about 10 percent of its bookings from Japan have been cancelled. The hotel said it could not say if cancellations might increase.
The Radisson Hotel said that cancellations of hotel bookings were likely to be high due to the national grief in Japan. “We have not had such massive cancellations, but there have been some cancellations,” said Abinav Rana, general manager of the hotel.
The Shangri-La Hotel in Kathmandu and the Shangri-La in Pokhara do not have bookings from Japanese guests for March, said general manager Raju Bikram Shah.
Japanese tourists were among the major visitors to Nepal till 2001. However, after the Maoist conflict escalated, arrivals from Japan decreased significantly. Following the peace accord in 2006, the number of Japanese visitors rebounded. In 2007, there were 21,989 Japanese arrivals.
The Nepal Association of Tour Operators (NATO) has projected a 40 percent drop in Japanese tourists this year. The association said that the season for Japanese tourists had started, and that a crisis at the beginning of the season would hurt Nepal’s travel trade industry, particularly trekking and tours. “A Japanese tour group normally consists of 20 to 25 people, which now has fallen to nine to 10 people,” said NATO president Ashok Pokhrel.
KATHMANDU, MAR 22 -
Nepal’s tourism has suffered a direct hit as a result of the devastating earthquake and tsunami in Japan. Travel trade entrepreneurs say that they are receiving increasing numbers of cancellations from Japanese tourists following the twin disasters. The tourism industry has received more than 1,000 cancellations from Japan so far.
March, April and May are the most popular months for Japanese visitors in Nepal, and the cancellations during the peak season mean business will be hurt bad. Travel traders say Japanese tourists are among the highest spenders in Nepal and they stay over a week.
According to official tourism statistics, Japan is the sixth largest source of air tourists for Nepal after India, China, the US, the UK and France. Nepal hosted 23,272 Japanese tourists in 2010, among whom 20,458 came by air.
“The unexpected cancellation of tours has hit our business,” said Shibesh Shrestha, managing director of C&K Nepal Travels and Tours, whose main clients are Japanese tour groups.
According to him, his agency has received 250 cancellations for March alone. “Although there were few tourists coming from Osaka, there are more cancellations from Tokyo and Hokkaido. All the bookings from Sendai have been cancelled,” said Shrestha.
The cancellations from Japan are expected to affect Nepal’s target of welcoming one million tourists in 2011. The Nepal Tourism Year implementation committee has planned to increase Japanese arrivals by 20 percent. Nepal received 3,755 Japanese tourists in the first two months of 2011 compared to 3,528 in the same period last year.
Along with tour operators, hotels are also seeing cancellation of reservations by Japanese tourists. “We received cancellations of 300 room nights within a week,” said Bharat Joshi, director, sales and marketing at the Hotel Yak & Yeti. He said that all the hotels were receiving cancellations, and that 600 room nights were expected to be cancelled this season.
“Japanese tourists are major customers for hotels spending over US$ 90 per day on accommodation,” Joshi said. He added that cancellations from Japan were expected to result in a drop in the Yak & Yeti’s business by 5 percent.
The Everest Hotel has reported that about 10 percent of its bookings from Japan have been cancelled. The hotel said it could not say if cancellations might increase.
The Radisson Hotel said that cancellations of hotel bookings were likely to be high due to the national grief in Japan. “We have not had such massive cancellations, but there have been some cancellations,” said Abinav Rana, general manager of the hotel.
The Shangri-La Hotel in Kathmandu and the Shangri-La in Pokhara do not have bookings from Japanese guests for March, said general manager Raju Bikram Shah.
Japanese tourists were among the major visitors to Nepal till 2001. However, after the Maoist conflict escalated, arrivals from Japan decreased significantly. Following the peace accord in 2006, the number of Japanese visitors rebounded. In 2007, there were 21,989 Japanese arrivals.
The Nepal Association of Tour Operators (NATO) has projected a 40 percent drop in Japanese tourists this year. The association said that the season for Japanese tourists had started, and that a crisis at the beginning of the season would hurt Nepal’s travel trade industry, particularly trekking and tours. “A Japanese tour group normally consists of 20 to 25 people, which now has fallen to nine to 10 people,” said NATO president Ashok Pokhrel.
Saturday, March 19, 2011
Govt rolls back airfare hike in remote areas
SANGAM PRASAIN
KATHMANDU, MAR 18 -
Following criticism from remote people over hefty hike in airfares, the Ministry of Tourism and Civil Aviation (MoTCA) on Friday rolled back the hike in the remote sector.
A tripartite meeting between the Airlines Operators’ Association of Nepal (AOAN), lawmakers from the Karnali Region and tourism ministry under the coordination of Tourism Minister Khadga Bahadur Bishwokarma decided to roll back the hike and resume airlines operations halted in different remote districts.
For the last three weeks, locals in different remote sectors had been obstructing airports and air services demanding a roll back of the airfare hike. The ministry had approved the hiked fare rate on Feb. 16 on the recommendation of the Civil Aviation Authority of Nepal (CAAN). Private air operators had hiked airfares by 13 to 48 percent depending on the air distance. “The meeting has decided to find a solution to the issue within 15 days. However, as per the Friday’s decision, we have agreed to roll back the hike in remote sector—remote hub sector to remote areas,” said Suman Pandey, general secretary of AOAN.
The meeting also decided to form a high-level committee to resolve the issue under the coordination of MoTCA joint-secretary Ranjan Krishna Aryal. Other members of the committee include CAAN Deputy Director General Binod Gautam, Nepal Airlines Corporation Director Gobardan Khadka, and AOAN representatives Umesh Paneru and Pramod Pandey. “The high level committee will find out a solution to the issue. It will identify alternatives to the airfare hike and determine reasonable and affordable airfare for remote areas,” Pandey added.
Air services in four districts of Karnali Region had been affected due to locals’ protest. For the last three weeks, air services in Humla have totally halted. The ministry was forced review the fares after it received several memorandums from remote areas claiming that the current airfare was beyond the reach of the remote people, according to a government official.
Ministry officials say although the fare revised on Feb. 16 was reasonable, it affected remote passengers. As per the AOAN’s request and the provision that airfares should be reviewed every two years, the ministry had assigned CAAN to study technical aspects of the proposed fare hike four months ago. The airfare was reviewed last on Feb. 17, 2006. CAAN had proposed a hike in airfares in line with inflation and other major components.
Under the Nepal Rastra Bank’s inflation rate, other major components for an airfare review include direct fixed cost (aircraft lease cost, insurance, crew training, salary and allowances), direct variable cost (fuel, maintenance, landing, parking and navigation) and indirect operating cost (administration, agency commissions and overheads).
The AOAN had asked for an airfare review citing heavy lease tax, landing charge, parking charge, navigation charge, housing charge and other taxes.
KATHMANDU, MAR 18 -
Following criticism from remote people over hefty hike in airfares, the Ministry of Tourism and Civil Aviation (MoTCA) on Friday rolled back the hike in the remote sector.
A tripartite meeting between the Airlines Operators’ Association of Nepal (AOAN), lawmakers from the Karnali Region and tourism ministry under the coordination of Tourism Minister Khadga Bahadur Bishwokarma decided to roll back the hike and resume airlines operations halted in different remote districts.
For the last three weeks, locals in different remote sectors had been obstructing airports and air services demanding a roll back of the airfare hike. The ministry had approved the hiked fare rate on Feb. 16 on the recommendation of the Civil Aviation Authority of Nepal (CAAN). Private air operators had hiked airfares by 13 to 48 percent depending on the air distance. “The meeting has decided to find a solution to the issue within 15 days. However, as per the Friday’s decision, we have agreed to roll back the hike in remote sector—remote hub sector to remote areas,” said Suman Pandey, general secretary of AOAN.
The meeting also decided to form a high-level committee to resolve the issue under the coordination of MoTCA joint-secretary Ranjan Krishna Aryal. Other members of the committee include CAAN Deputy Director General Binod Gautam, Nepal Airlines Corporation Director Gobardan Khadka, and AOAN representatives Umesh Paneru and Pramod Pandey. “The high level committee will find out a solution to the issue. It will identify alternatives to the airfare hike and determine reasonable and affordable airfare for remote areas,” Pandey added.
Air services in four districts of Karnali Region had been affected due to locals’ protest. For the last three weeks, air services in Humla have totally halted. The ministry was forced review the fares after it received several memorandums from remote areas claiming that the current airfare was beyond the reach of the remote people, according to a government official.
Ministry officials say although the fare revised on Feb. 16 was reasonable, it affected remote passengers. As per the AOAN’s request and the provision that airfares should be reviewed every two years, the ministry had assigned CAAN to study technical aspects of the proposed fare hike four months ago. The airfare was reviewed last on Feb. 17, 2006. CAAN had proposed a hike in airfares in line with inflation and other major components.
Under the Nepal Rastra Bank’s inflation rate, other major components for an airfare review include direct fixed cost (aircraft lease cost, insurance, crew training, salary and allowances), direct variable cost (fuel, maintenance, landing, parking and navigation) and indirect operating cost (administration, agency commissions and overheads).
The AOAN had asked for an airfare review citing heavy lease tax, landing charge, parking charge, navigation charge, housing charge and other taxes.
Thursday, March 17, 2011
Govt to utilise unused railway corridor
SANGAM PRASAIN
KATHMANDU, MAR 18 -
Following the latest agreement with the Indian Oil Corporation to jointly construct the cross-border oil pipeline, the government is considering adopting less-costly approaches for acquiring land for the project.
The government is planning to use its land, which was earlier allocated to a railway corridor, for the Raxual-Amlekhgunj pipeline project. The railway corridor links Amlekhgunj with India’s Raxual via Birgunj. The corridor has so far remained unused.
Nepal Railway owns 400 bighas of land in Birgunj, Amlekhgunj, Raxual, Janakpur, according to Nepal Railway.
“As acquiring land from the public is problematic and costly, we are considering to the use the land allocated for railway,” said Purushottam Ojha, secretary of the Ministry of Commerce and Supplies.
However, the government is unaware about the condition the land and it plans to identify the real status of land soon. The government hopes that it will have to acquire little land from the public for the project if the railway corridor is used for the pipeline project. Of the 41 km pipeline, 39 kilometers lies on the Nepali side of border and the rest falls in India.
The two sides have agreed in principle that Nepal will bear the cost of the pipeline to be built in its territory and India will bear the cost of the project falling in its side.
During the bilateral talks between the Nepal Oil Corporation and Indian Oil Corporation in Mumbai on March 2, the two sides had agreed to form a joint committee to carry out works related to tender calling and procurement of construction materials for the project.
During the talks, the two sides had agreed to implement the project under separate ownership-joint operation model, dropping the previous idea of a joint venture.
The pipeline is expected to reduce transportation cost by 40-50 percent, control leakage and ensure hassle-free transfer and quality of petroleum products.
As per the detailed project report (DPR) compiled by the IOC, the NOC should lay down the pipeline 1.5 meters below the ground. For this, the DPR says NOC will not have to purchase land from individual land owners, but has to take the ‘right of way’ permission. However, owners should be compensated for the use of their land.
Land owners should be restricted from constructing permanent constructions within five meters on the either side of the pipeline alignment. They however, can till their land. However, as the government is planning to use its own land, it should not face many hassles in laying down the pipeline.
“We are not sure when the project will start,” said Secretary Ojha. He, however, said the project will be completed within one year of the beginning of construction work. The estimated cost of the project stands at Rs 1.6 billion, as per a survey carried out of by the IOC.
The IOC had first proposed the cross-border pipeline project in 1995. Following IOC’s proposal, the first MoU for the project was signed between NOC and IOC on September 1996 at junior executive level. In 2004 another agreement was reached at chief executive level.
KATHMANDU, MAR 18 -
Following the latest agreement with the Indian Oil Corporation to jointly construct the cross-border oil pipeline, the government is considering adopting less-costly approaches for acquiring land for the project.
The government is planning to use its land, which was earlier allocated to a railway corridor, for the Raxual-Amlekhgunj pipeline project. The railway corridor links Amlekhgunj with India’s Raxual via Birgunj. The corridor has so far remained unused.
Nepal Railway owns 400 bighas of land in Birgunj, Amlekhgunj, Raxual, Janakpur, according to Nepal Railway.
“As acquiring land from the public is problematic and costly, we are considering to the use the land allocated for railway,” said Purushottam Ojha, secretary of the Ministry of Commerce and Supplies.
However, the government is unaware about the condition the land and it plans to identify the real status of land soon. The government hopes that it will have to acquire little land from the public for the project if the railway corridor is used for the pipeline project. Of the 41 km pipeline, 39 kilometers lies on the Nepali side of border and the rest falls in India.
The two sides have agreed in principle that Nepal will bear the cost of the pipeline to be built in its territory and India will bear the cost of the project falling in its side.
During the bilateral talks between the Nepal Oil Corporation and Indian Oil Corporation in Mumbai on March 2, the two sides had agreed to form a joint committee to carry out works related to tender calling and procurement of construction materials for the project.
During the talks, the two sides had agreed to implement the project under separate ownership-joint operation model, dropping the previous idea of a joint venture.
The pipeline is expected to reduce transportation cost by 40-50 percent, control leakage and ensure hassle-free transfer and quality of petroleum products.
As per the detailed project report (DPR) compiled by the IOC, the NOC should lay down the pipeline 1.5 meters below the ground. For this, the DPR says NOC will not have to purchase land from individual land owners, but has to take the ‘right of way’ permission. However, owners should be compensated for the use of their land.
Land owners should be restricted from constructing permanent constructions within five meters on the either side of the pipeline alignment. They however, can till their land. However, as the government is planning to use its own land, it should not face many hassles in laying down the pipeline.
“We are not sure when the project will start,” said Secretary Ojha. He, however, said the project will be completed within one year of the beginning of construction work. The estimated cost of the project stands at Rs 1.6 billion, as per a survey carried out of by the IOC.
The IOC had first proposed the cross-border pipeline project in 1995. Following IOC’s proposal, the first MoU for the project was signed between NOC and IOC on September 1996 at junior executive level. In 2004 another agreement was reached at chief executive level.
Wednesday, March 2, 2011
NOC given Rs 1b loan to preempt fuel price hike
SANGAM PRASAIN
KATHMANDU, MAR 03 -
The government has once again bailed out cash-strapped Nepal Oil Corporation (NOC) with a loan of Rs 1.13 billion for one month. The credit has forestalled a planned fuel price hike by the state-owned oil monopoly.
Sources said the Ministry of Finance had agreed to provide the loan as asked by NOC. The bail-out is a non-budgetary expenditure of the government. “The decision to provide the loan was made at the political level,” said a senior ministry official. The loan file will be sent to the cabinet by the Ministry of Commerce and Supplies.
With the international oil price spiralling to a new high due to political turmoil in the Middle East and NOC’s losses mounting, it was under extreme pressure to increase fuel prices. It had presented two options to the government — bailing it out with a loan or allowing it to hike prices. The government has accepted the latter fearing a public backlash if prices were raised.
On Feb. 24, NOC sought a loan of Rs 1.30 billion from the government to maintain smooth supply of petroleum products if it was not to be allowed to revise fuel prices.
This is the second time this year that the government has approved a loan for NOC. Earlier, the ministry had provided credit worth Rs 1.30 billion (Rs 800 million from the Employee Provident Fund and Rs 500 million from the Citizen Investment Trust) to the corporation by putting up land belonging to Birgunj Sugar Mill and Sajha Yatayat as collateral. After Indian Oil Corporation (IOC) sent a new price list on March 1, NOC said it was incurring a loss of Rs 7.76 per litre on petrol, Rs 14.27 per litre on diesel, Rs 4.90 per litre on kerosene and Rs. 254.77 per cylinder on LPG. Earlier, its per litre losses on petrol and diesel were Rs 5.60 and Rs 11.31.
Though NOC is making a profit on aviation turbine fuel, its profit margin has declined from Rs 11 to Rs 6 per litre with IOC’s new tariff.
According to NOC, it will be bearing a loss on kerosene from this month with IOC’s new pricing. Earlier, it used to make a profit of Rs 0.80 per litre on kerosene.
NOC said its losses would reach Rs 1.33 billion per month. It had suffered a loss of Rs 740 million and Rs 1.13 billion in January and February respectively. The corporation had last hiked fuel prices on Dec. 6, 2010.
With the international oil price remaining volatile, the government’s latest rescue package may not be enough for NOC. Whether the government will continue the present policy of providing cash to NOC or allow prices to be raised remains a question.
“Allowing NOC to hike prices has now become a political decision in Nepal,” said a senior Finance Ministry official. “We can provide loans to NOC at the cost of the development budget, but that is not the right solution.”
KATHMANDU, MAR 03 -
The government has once again bailed out cash-strapped Nepal Oil Corporation (NOC) with a loan of Rs 1.13 billion for one month. The credit has forestalled a planned fuel price hike by the state-owned oil monopoly.
Sources said the Ministry of Finance had agreed to provide the loan as asked by NOC. The bail-out is a non-budgetary expenditure of the government. “The decision to provide the loan was made at the political level,” said a senior ministry official. The loan file will be sent to the cabinet by the Ministry of Commerce and Supplies.
With the international oil price spiralling to a new high due to political turmoil in the Middle East and NOC’s losses mounting, it was under extreme pressure to increase fuel prices. It had presented two options to the government — bailing it out with a loan or allowing it to hike prices. The government has accepted the latter fearing a public backlash if prices were raised.
On Feb. 24, NOC sought a loan of Rs 1.30 billion from the government to maintain smooth supply of petroleum products if it was not to be allowed to revise fuel prices.
This is the second time this year that the government has approved a loan for NOC. Earlier, the ministry had provided credit worth Rs 1.30 billion (Rs 800 million from the Employee Provident Fund and Rs 500 million from the Citizen Investment Trust) to the corporation by putting up land belonging to Birgunj Sugar Mill and Sajha Yatayat as collateral. After Indian Oil Corporation (IOC) sent a new price list on March 1, NOC said it was incurring a loss of Rs 7.76 per litre on petrol, Rs 14.27 per litre on diesel, Rs 4.90 per litre on kerosene and Rs. 254.77 per cylinder on LPG. Earlier, its per litre losses on petrol and diesel were Rs 5.60 and Rs 11.31.
Though NOC is making a profit on aviation turbine fuel, its profit margin has declined from Rs 11 to Rs 6 per litre with IOC’s new tariff.
According to NOC, it will be bearing a loss on kerosene from this month with IOC’s new pricing. Earlier, it used to make a profit of Rs 0.80 per litre on kerosene.
NOC said its losses would reach Rs 1.33 billion per month. It had suffered a loss of Rs 740 million and Rs 1.13 billion in January and February respectively. The corporation had last hiked fuel prices on Dec. 6, 2010.
With the international oil price remaining volatile, the government’s latest rescue package may not be enough for NOC. Whether the government will continue the present policy of providing cash to NOC or allow prices to be raised remains a question.
“Allowing NOC to hike prices has now become a political decision in Nepal,” said a senior Finance Ministry official. “We can provide loans to NOC at the cost of the development budget, but that is not the right solution.”
Tuesday, March 1, 2011
Casinos get reprieve as PAC decides to hold discussions
SANGAM PRASAIN
KATHMANDU, MAR 02 -
Eight casinos facing possible closure for defaulting on their royalty payments got a temporary reprieve on Tuesday with the parliamentary Public Accounts Committee (PAC) deciding to go for extensive discussions.
PAC’s move came amid growing pressure from casino trade unions who want action against the gambling houses to be delayed.
PAC’s latest stance has raised questions whether the casinos will actually be penalized. Earlier, it had taken a tough position even asking the government to scrap the licenses of those who flout government rules.
Lawmakers were divided into two groups at Tuesday’s meeting, one demanding that the licenses be scrapped immediately and the other suggesting further discussion. Lawmakers like Dhanraj Gurung and Lal Babu Pandit were for an immediate scrapping of the licenses while Deep Kumar Upadhyay, Prakash Chandra Lohani, Prem Bahadur Singh and Narayan Dahal were for holding more discussions.
With four among the eight casinos recommended for action by the Department of Revenue Investigation (DRI) having cleared their outstanding royalties and dues, the Tourism Ministry is in a dilemma whether to take action against all of them or only the four that haven’t paid their dues. Of late, trade unions affiliated to the casinos have intensified their lobbying with government officials and lawmakers to delay action.
Casino Anna has said that it would clear its remaining dues. Casino representatives told PAC that their management would be clearing the dues within a weak. “The new management is committed to clearing the liabilities,” said Hem Bahadur Rawal, representative of Casino Anna. “The government should consider the willingness of the new management.”
The Prime Minister’s Office (PMO) was expected to take action against the eight casinos on Monday. The Tourism Ministry on Feb. 27 had said that it would forward the file to chief secretary Madhav Prasad Ghimire on Feb. 28 for a final decision.
On Dec. 28, 2010, PAC had directed the government to cancel the licenses of all the casinos that failed to clear their dues within 35 days. Based on that directive, the DRI on Feb. 14 had formally requested the Tourism Ministry to take against the eight casinos.
Hoteliers housing the casinos said at Tuesday’s meeting that if the casino operators did not clear their dues, then they would pay them. However, they said that the onus for clearing the dues lies with the casino operators as they have been paying them in the past.
Lawmakers pointed out that the hotels should be made liable for the dues and royalties. “The hotels should not move away from their responsibility,” said lawmaker Prakash Chandra Lohani. Hotel Annapurna’s acting general manager Paras Rana told PAC that the hotel did not hold the operating license of Casino Anna. “The license belongs to Annapurna International that used to operate the hotel in the past,” said Rana.
However, Soaltee Hotel representative said that the government should first auction the properties owned by Nepal Recreation Centre (NRC) to recover unpaid dues.
According to him, if the money thus raised falls short of the payments owed, the hotels would be liable for the rest. Two casinos run by Rakesh Wadhwa’s NRC haven’t made any payments till date despite enormous pressure from the government.
Piyush Bahadur Amatya, chairman of the Fulbari Resort, said that the hotel management was forced to take ownership of the casinos after the casino operators failed to clear government dues and hotel rentals. Amatya asked for more time to clear the dues. As of now, the hotel has paid Rs 13 million to the government.
KATHMANDU, MAR 02 -
Eight casinos facing possible closure for defaulting on their royalty payments got a temporary reprieve on Tuesday with the parliamentary Public Accounts Committee (PAC) deciding to go for extensive discussions.
PAC’s move came amid growing pressure from casino trade unions who want action against the gambling houses to be delayed.
PAC’s latest stance has raised questions whether the casinos will actually be penalized. Earlier, it had taken a tough position even asking the government to scrap the licenses of those who flout government rules.
Lawmakers were divided into two groups at Tuesday’s meeting, one demanding that the licenses be scrapped immediately and the other suggesting further discussion. Lawmakers like Dhanraj Gurung and Lal Babu Pandit were for an immediate scrapping of the licenses while Deep Kumar Upadhyay, Prakash Chandra Lohani, Prem Bahadur Singh and Narayan Dahal were for holding more discussions.
With four among the eight casinos recommended for action by the Department of Revenue Investigation (DRI) having cleared their outstanding royalties and dues, the Tourism Ministry is in a dilemma whether to take action against all of them or only the four that haven’t paid their dues. Of late, trade unions affiliated to the casinos have intensified their lobbying with government officials and lawmakers to delay action.
Casino Anna has said that it would clear its remaining dues. Casino representatives told PAC that their management would be clearing the dues within a weak. “The new management is committed to clearing the liabilities,” said Hem Bahadur Rawal, representative of Casino Anna. “The government should consider the willingness of the new management.”
The Prime Minister’s Office (PMO) was expected to take action against the eight casinos on Monday. The Tourism Ministry on Feb. 27 had said that it would forward the file to chief secretary Madhav Prasad Ghimire on Feb. 28 for a final decision.
On Dec. 28, 2010, PAC had directed the government to cancel the licenses of all the casinos that failed to clear their dues within 35 days. Based on that directive, the DRI on Feb. 14 had formally requested the Tourism Ministry to take against the eight casinos.
Hoteliers housing the casinos said at Tuesday’s meeting that if the casino operators did not clear their dues, then they would pay them. However, they said that the onus for clearing the dues lies with the casino operators as they have been paying them in the past.
Lawmakers pointed out that the hotels should be made liable for the dues and royalties. “The hotels should not move away from their responsibility,” said lawmaker Prakash Chandra Lohani. Hotel Annapurna’s acting general manager Paras Rana told PAC that the hotel did not hold the operating license of Casino Anna. “The license belongs to Annapurna International that used to operate the hotel in the past,” said Rana.
However, Soaltee Hotel representative said that the government should first auction the properties owned by Nepal Recreation Centre (NRC) to recover unpaid dues.
According to him, if the money thus raised falls short of the payments owed, the hotels would be liable for the rest. Two casinos run by Rakesh Wadhwa’s NRC haven’t made any payments till date despite enormous pressure from the government.
Piyush Bahadur Amatya, chairman of the Fulbari Resort, said that the hotel management was forced to take ownership of the casinos after the casino operators failed to clear government dues and hotel rentals. Amatya asked for more time to clear the dues. As of now, the hotel has paid Rs 13 million to the government.
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