Biz News July 2072

  25 min 11 sec to read

Pro Public and Private Sector Policy Formulation Stressed
Economists and private sector actors have stressed on formulating policies that could harness the potential of both the private and the public sector in addressing the concerns of the national economy, that surfaced especially in the aftermath of the earthquake. 
Speakers at a programme organized in Kathmandu in early June said that it is not possible for the government to carry out the reconstruction and recovery tasks on its own and expressed their willingness to partner with the government. While stating that the economy must run smoothly as per global standards at such a critical time, they criticized the government for not introducing plans aimed at uplifting the economy even a month after the disaster. 
Acting president of the Federation of Nepalese Chambers of Commerce and Industry (FNCCI), Pashupati Murarka criticized the government for taking the loss incurred to the private sector lightly. He said that industries had to bear the huge loss as they had to shut down production in the aftermath of the earthquake. While calling on all sectors to take the economic development of the nation seriously, he asserted that the private sector carried out its responsibilities very well and added that it is capable of reconstructing the nation.
Murarka urged the government to provide sufficient funds for reconstruction and added that the demand and supply of construction material will be easy if the reconstruction responsibility is given to the private sector. Stressing on the need to review existing laws due to the present scenario, he said that it was not the time for the private sector to ask for tax waivers and for the government to increase taxes. He said that it was time for entrepreneurs to use the reconstruction and recovery work as an opportunity to develop a new entrepreneurship outlook. 
Speaking at the same programme, Hari Bhakta Sharma, Senior Vice- President of the Confederation of Nepalese Industries (CNI) said that they are ready to work as private sector volunteers following the rules and regulations and complete the task of reconstruction within the specified time provided by the government. He said that they are expecting the government to approach them but remarked that the government’s action has been disappointing so far. 
Kamalesh Kumar Agrawal, General Secretary of Nepal Chamber of Commerce said the economic development of the nation is possible only if the government and private sector work together. Professor Dr. Bishwombher Pyakuryal, a noted economist, backed the views expressed by the FNCCI and CNI officials and added that the private sector had an important and critical role to play in the current situation.
He also said that reconstruction can potentially lead to economic prosperity and development. Along the same lines, Dr Hemanta Dawadi, former Director General of FNCCI pointed out tourism, insurance and housing as sectors with huge potential for economic growth along with small and medium industries. Dawadi called on the government to formulate rational policies and said ‘emotional’ policies should not restrict the future growth of the economy. 
Apartment Residents Left High and Dry
Residents of Park View Horizon Apartments have been left in the lurch due to the negligence of the apartment’s developer, Varun Developers Pvt. Ltd. The apartment was devasted by the April 25 earthquake and was labelled as unsafe to stay in by authorities. 
Former residents have been forced to seek shelter in tents and in the homes of relatives and some still have their belongings in the building. In the aftermath of the quake, Varun Developers had promised to manage alternative accommodation for the victims, but it has so far ignored them. 
In response, the victims have approached the Department of Urban Development and Building Construction (DoUDBD), Kathmandu Valley Urban Development Authority (KVUDA), the PM’s Office and relevant parliamentary committees. But so far, the residents have not received any justice.
MoF Preparing to Increase VAT Threshold
The Ministry of Finance (MoF) is preparing to increase the Value Added Tax (VAT) threshold. The step is being taken following suggestions from the High Level Commission on Tax System Review and various entrepreneurs, confirmed Nawaraj Bhandari, Revenue Secretary. 
“The Ministry is increasing the VAT threshold considering the current situation, instead of following regulations provisioned in the current 18-year old Act,” Bhandari said defending the MoF’s move. 
The 1997 VAT Act requires businessmen and entrepreneurs making business transactions worth Rs 2 million or more in the trade sector and Rs 1 million or more in the service sector, respectively, to register under VAT. Presently, Nepal has 145,000 VAT taxpayers.
Bajaj Auto Provides Rs 160 Million for Quake Relief
Bajaj Auto Ltd., India, one of India's oldest corporate houses working in a diverse range of businesses, has provided Rs 160 million to the India's Prime Minister's Relief Fund as a contribution to support the rehabilitation and rebuilding efforts in Nepal after the massive April 25 earthquake. The aid will be redirected to the Prime Minister's Relief Fund in Nepal.
Moreover, the corporation has also contributed a sum of Rs 8 million to SEWA, an NGO working for the needy and self-employed women workers in Nepal. 
Commenting on the contribution, the company’s President (International Business) Rakesh Sharma said, "Nepal has seen an unprecedented disaster. In this time of distress we stand by our friends in Nepal and this contribution is a small reaffirmation of our commitment to the people of Nepal. Nepal is a very important country for Bajaj Auto ltd. and we have been there for more than 20 years.  We have over 350,000 Bajaj motorcycles on the country’s roads. We are working with our consumers, dealers and technicians towards the quick repair of damaged vehicles so that people can be mobile once again." 
Sharma further stated that the company was also ensuring that immediate relief was provided to the affected people through its official distributor and largest sellers of motorcycles in Nepal, Hansraj Hulaschand & Co. Pvt. Ltd.
Executive Director of Hansraj Hulaschand and Company Pvt. Ltd., Shekhar Golchha said, "We are grateful to Bajaj for its contribution in rebuilding of the nation and also in rehabilitating the affected people. We are honored to be working with Bajaj and it is our pledge to support the organization for its relief projects in Nepal."
ICAN Recommends Government on Reconstruction Management
The Institute of Chartered Accountants of Nepal (ICAN) has presented recommendations to the government on how to properly manage the capital for reconstruction and rehabilitation projects. 
Narendra Bhattarai, President of ICAN, said that the recommendations are aimed at streamlining the reconstruction and rehabilitation process.
Bhattarai added that the report has suggested that the government operate separate projects for relief management, reconstruction and rehabilitation. “The report envisions formulating separate authorities for each component with well-formulated standard operational procedures,” he said. 
The report recommends the formation of expert committees in close coordination with professional bodies like ICAN, the Bar Council, Medical Council, Engineering Council, Bankers Association, etc. to manage resources, manage and check expenditures, and to monitor and evaluate such projects. 
These committees will in turn be coordinated by a central committee, presided by the vice chairman of the National Planning Commission which in turn will be monitored and evaluated by a parliamentary level committee, Bhattarai clarified. 
At the district level, ICAN has suggested forming committees combining technical persons, government officials, political party leaders and community gatekeepers to monitor project expenditures and to monitor and evaluate project activities effectively. 
It also proposes to hand over certain villages to any willing international organization for reconstruction and to constitute special auditing mechanisms to monitor and evaluate their reconstruction activities.
NEPSE Companies Largely Unaffected by Earthquake
A recent report has claimed that only a small number of companies out of the 100 listed on the Nepal Stock Exchange (NEPSE) have been affected by the April 25 Gorkha earthquake. The information was made available in a report compiled by NEPSE, the Securities Board of Nepal, Employees Provident Fund and the Citizens 
Investment Trust.
The report which was submitted to the Ministry of Finance (MoF) in the first week of June is expected to generate investment ideas for a ‘basket fund’ operating under the leadership of the Citizens Investment Trust and. 
Vishal Group Appointed Authorized Dealer of Tata Green Batteries
One of Nepal’s leading business and industrial groups, Vishal group has been appointed the authorized distributor of Tata Green Batteries for the Kathmandu Valley. An agreement to this effect was signed between Vishal Group and TATA AUTOCOMP at the Trade Tower, Thapathali, on June 10. 
Nikunj Agrawal, Director of Vishal Group and Bibek Bijukchhe, CEO of the Automotive Division of Vishal Group and Abhijit Bhattacharya, Territory In-charge for TATA AUTOCOMP and Jai Raj Singh, Zonal Manager of TATA AUTOCOMP were present in the agreement signing ceremony.
With the signing of this agreement, Vishal Group will be the authorized dealer of Tata Green Products such as inverters, solar panels, two wheelers and four wheelers batteries and heavy commercial vehicles batteries. 
Tata Green Batteries is a joint venture between Tata Group India and GS Yuasa Battery (Japan). The batteries are manufactured using Japanese technology and are 90% recyclable.
IFC Investing Rs 380 Million in Agribusiness
International Finance Corporation (IFC) is investing Rs 380 million in Probiotech Industries Pvt. Ltd as part of its effort to help Nepal’s reconstruction by boosting farmers’ income. This is the first time that IFC has invested in Nepal's agribusiness. 
“With IFC’s investment and advice, we look forward to rebuilding this important sector and will adopt the best practices for production efficiency, environmental and social standards, and upgrade the technology,” said Ananda Bagariya, Probiotech’s Managing Director. He said that the IFC investment will assist in improving the food security of 8,000 farmers and food distributors along with increasing their source of income.
Probiotech, a poultry feed industry, is the first to produce chicken feed in the form of pellets. The company plans to increase its production capacity, invest in high margin value added products, produce soy flour nuggets and refined oil and strengthen its distribution system. 
The investment will help to eliminate malnutrition in areas that have lower family income by increasing the availability of quality soybean protein food products, said Patrick Leahy, Head of Industry, Manufacturing, Agribusiness and Services, IFC Asia Pacific. Leahy said the investment is expected to assist Nepal reconstruct its agribusiness sector. 
Ncell launches Ncell Connect- dongles and Wireless Routers
Telecom giant Ncell has launched Ncell connect dongles and wireless routers. The company says the new launches are aimed at catering to its customers’ need for high-speed internet and contributing to post-quake relief and rebuilding works.
The buyers of the devices will also get 500 MB data bonus for free. The company said the devices are available in all Ncell Centers, Ncell Shops and all authorized sales outlets.
These high internet devices allow users to access internet at download speed of up to 21.6 MB per second and upload speed of up to 5.76 MB per second. Wireless routers allow up to 10 simultaneous users with battery backup of up to six hours. The speed of internet on these devices depends on speed available in the given locality and also on the external factors.
The devices need a SIM along with data package to access the internet which enables Ncell subscribers to access internet services anytime, anywhere with Ncell 3G network. The devices are compatible to Windows and iOS.
“Experiences across the world have shown that access to internet can much support relief and rebuilding works, and contribute to better manage post-quake impacts. Hence, respecting the need of the hour and customers demand, we have once again made high speed dongles and wireless routers available to our customers. We believe this will enable our customers to stay connected with the dear ones, businesses and support agencies across the world,” said Milan Sharma, corporate communications expert of Ncell.
The dongles are available at Rs. 2699 (Including taxes), while wireless routers are available at Rs. 5399 (Including taxes). Customers can also get 500 MB data coming with the device transferred to their existing numbers along with the purchase of the device from Ncell Centers.
Involvement of Experts in Reconstruction a Must: Basnyat 
President of the Confederation of Nepalese Industries (CNI), Narendra Basnyat, has said that reconstruction in the post disaster situation is a challenging process which needs the experience and expertise of experts.  He said this while inaugurating a seminar titled, “Reconstructing Nepal: Global Perspective” held on June 3. The seminar was jointly organized by CNI and Miyamoto Global Disaster Relief.
Saying that today’s first priority is to maintain mobility in the business and industrial sectors, Basnyat added CNI has already forwarded its suggestions to the government in order to help make policy changes to facilitate the reconstruction process.
Speaking on the occasion, earthquake expert and chief of the Miyamoto Foundation, Dr H Kit Miyamoto talked about the standard to be maintained during reconstruction.  “It will be wise not to take any reconstruction decision in a hurry,” said Dr Miyamoto.
Sharing his experience of reconstruction work after the earthquakes in Haiti and New Zealand, Dr Miyamoto said that these countries were able to rebuild themselves through proper discussion among all stakeholders.
CNI’s senior vice president, ex-vice presidents, senior industrialists, construction entrepreneurs and engineers were present at the programme.
Nepal Gets First Saline Water Factory
Himalayan Parentals and Formulation Pvt Ltd, Nepal's first saline water factory, is all set to come into operation soon. This Dhanusa-based industry is expected to start production within June, Govinda Kumar Sararf, Chief Executive Officer of the company, informed. 
The factory, constructed in consultation with a Chinese firm and with an investment of Rs 350 milion in equipment imported from India, China and Europe, is built across 4 bighas of land in Ksheereshwornath Municipality of Dhanusha district. 
The company has plans to manufacture the DIO brand, RL brand and another 10 brands of normal saline in the first stage. These products will be manufactured in compliance with World Health Organisation standards and will be manufactured in a testing phase for the first three months. According to the company, it has the capacity to manufacture 50,000 bottles daily.
Hotel Industry Bears Rs 13 Billion Loss
Preliminary reports suggest that Nepal’s hotel industry lost Rs 13 billion in the April 25 Gorkha earthquake and its aftershocks. The Hotel Association Nepal (HAN) report, prepared by compiling data from all the earthquake-affected districts, recorded the loss in terms of physical property. 
Binayak Shah, Secretary General of HAN, said that the figure is based on primary data and hinted that it could change later when further details are reported. The report includes data on damage incurred to non-HAN member hotels as well. 
Shah said that 90 percent of hotels had received a green sticker from the authorities. The tourism department and Ministry of Urban Development’s monitoring team had concluded that most of the large hotels were safe after the earthquake.
In Kathmandu, The Everest Hotel and Annapurna Hotel's casino were the only big properties to get a red sticker. Stating that the smaller hotels that were damaged were facing difficulties in getting back to business, Shah stressed on the need to provide a six months relief package in order to keep the smaller damaged hotels afloat.
Shah said that HAN is planning to make similar recommendations to the government to ensure relief gets to the smaller hotels. 
In a move to revive tourist flow, HAN and the Regional Hotel Association, Pokhara have announced to have allocated 1500 free-of-cost rooms for international celebrities, media personnel and entrepreneurs.
Kathmandu Valley Declared Crisis-Hit Zone
A cabinet meeting on June 14 declared the three districts inside Kathmandu valley- Kathmandu, Bhaktapur and Lalitpur- as crisis-hit zones for 12 months. 
Spokesman for the Ministry of Home Affairs, Laxmi Prasad Dhakal, said that the time has been extended considering the amount of time it will take time to demolish the quake damage buildings in these districts. The government had declared 14 severely earthquake affected districts as crisis-hit zones for a month. “Now as other districts have no problems in managing the quake hit structures, they have been removed from the crisis-hit zone list,” said Dhakal. 
Shesh Ghale Special Envoy
The government has appointed the President of the Non-Resident Nepali Association, Shesh Ghale as its special envoy for collecting donations from the international community for the National Reconstruction Fund. The decision was made at a recent cabinet meeting stating that Ghale will play a crucial role in collecting funds from foreign organizations. Ghale has been active in helping earthquake victims. 
Customs Duty on Silver to Increase 
The Foreign Exchange Management Department (FEMD) of Nepal Rastra Bank (NRB) is mulling to recommend an increase in the customs duty on the import of silver. “We are compelled to increase the customs duty due to the rapid increase seen in the import of silver,” Basudev Adhikari, director of FEMD, said adding that the new rates are not yet decided. Currently, the customs duty rate per Kilogram of silver is Rs 4600.
NRB has also shown indications that it will ease off customs duty rate on the import of gold. “Import duty on gold might decrease but the rate wont be less than that of India,” Adhikari said. In India the customs duty on 10 grams of gold is Rs 5,200 while in Nepal it is Rs 4,800 for the same quantity. Earlier, the customs duty on gold was higher than India’s when import of gold had soared.
Rs 2.4 billion worth of gold, silver, diamond was imported into the country in the first 10 months of the current fiscal year. Of these, silver imports alone amounted to Rs 1.6 billion, followed by gold (Rs 82.8 million)and diamond (Rs 7.9 million). 
Even though the  customs duty on silver in Nepal is higher by Rs 200 than in India, silver is sent into India via Nepal. The reason behind this is unknown, but NRB says it’s investigating the issue. Silver is used as a convenient metal for exchanging Indian currency (IC) in towns bordering India. A trader makes a profit of around five to ten thousand rupees while exchanging silver worth one hundred thousand Indian Rupees. This is the main reason why silver is widely used in the Nepal-India border area.
Ncell Doubles Data Volume for Same Price 
Ncell has started to provide doubled data volume on its existing daily pack. The company made its Ek Ko Dui (two for one) offer on its product so as to make more data available at affordable rates. The company launched the offer during the post-quake rebuilding phase. 
Ncell customers using its Pre-paid and Post-paid services will now get double data on their daily data package at no extra cost.  With the new scheme, a subscriber of 3 MB data package will get 6 MB, 6MB subscriber will get 12 MB, 9 MB subscriber will get 18 MB and a 20 MB subscriber will get 40 MB of data at the existing rate of Rs 6, 9, 12 and 20 respectively.
Insurance Companies Linger Claim Settlement
Insurance companies are accused of lingering in settling claims made by their earthquake-affected customers. The Insurance Board, the sector’s regulatory body, has expressed unhappines at the pace at which Nepali insurance companies were responding to insurance claims. 
Prof. Dr. Fatta Bahadru KC, chairman of the Board said, “We expected that 20 to 25 percent of the claims would be cleared within the last seven weeks. But, ironically only 2.7% of claims were found to be accepted by the insurance companies.” He added that such a performance by insurance companies has not impressed the regulatory board.  Out of 16 companies, only four have cleared 0.05% of the total claims. 
“The companies should be ashamed of themselves,” he said. ”Even though this is a wonderful opportunity for insurance companies to boost their business, they are not able to change their attitude,” said KC. 
As of 12 June, a total of 14,458 claims amounting to over Rs 1.38 billion were filed of which only 1150 claims amounting to Rs 280 million were settled. The payments that insurance companies have cleared so far are minuscule in comparison to the claims made. 
However, insurance companies deny being sluggish in clearing claims. Vijay Bahadur Shah, President of the Nepal Insurers Association, said that they have cleared  payments for more than 1000 claims in just six weeks and added that insurance companies have been providing payments to their customers even during the time of crisis. He said that insurance companies would clear around 90 percent of the claims within the coming 
six months. 
AAN Marks Silver Jubilee
The Advertising Association of Nepal (AAN) has celebrated its silver jubilee by organizing a special programme in which it honoured outstanding advertising agencies which have performed effectively for the past two and a half decades. 
Furthermore, AAN provided financial support to the family of the Late Dinesh Mul, former director of Dina Advertising Agency and long time member of AAN.  Speaking on the occasion, Minister for Information and Communication, Minendra Rijal appreciated the contribution made by the advertising agencies to the economy. 
Chief Secretary Lilamani Poudel said that the government was working on introducing new regulations in advertising to prioritise local adverts over foreign ads.
Rana, Rajkarnikar and Murarka in FNCCI Election Fray
Three candidates are running for the remaining term of the president of the Federation of Nepalese Chambers of Commerce and Industry (FNCCI). Acting President Pashupati Murarka, executive member and former vice-president Bhawani Rana  and former senior vice-president Bhashkar Raj Rajkarnikar registered their nominations on June 27 for the  election that  will be held on July 3 for the remaining one and half years tenure.
The candidacy of Rana was proposed by Gularia Chamber of Commerce. Current vice-presidents duo Kishor Pradhan and Dinesh Shrestha are backing her. Similarly, Murarka whose ’s candidacy was proposed by Lahan Chamber of Commerce is backed by current vice-president Shekhar Golchha. Likewise, the candidacy of Rajkarnikar who had lost the previous election to Pradeep Jung Pandey by 177 votes is proposed by the Advertising Association of Nepal. 
Last month, a special general assembly of FNCCI decided to hold fresh elections after the incumbent FNCCI president Pandey was jailed in connection with a more than three decades old corruption case. 
Some former FNCCI presidents had taken initiatives to elect the new president unanimously but their efforts did not materialize.
Pashmina Sellers Donate Rs 1M to PM’s Relief Fund
Nepal Pashmina Industries Association (NPIA) donated one million rupees to the Prime Minister’s Relief Fund. NPIA President Pushpa Man Shrestha handed over the cheque to Prime Minister Sushil Koirala on Friday (June 15).The amount was collected from pashmina entrepreneurs for the welfare of earthquake victims, Shrestha informed adding that the association is ready to provide additional support to the nation if the need arises. Prior to this, NPIA had distributed various relief materials to earthquake victims.
Poudel Wins Surya Nepal Gokarna Monthly Medal
Sanjay Poudel won the Surya Nepal Gokarna Monthly Medal here at Gokarna Golf Club on Saturday (June 20). Poudel playing with 18 handicap produced a net score of five-under 67 to clinch the title. Ajaya was just a shot behind Paudel and finished as runner-up with four under par 68. Tendi Sherpa won the best gross award with the net score of 83 (11 over). Similarly, Dr. Niranjan Sharma finished third with a score of three-under par 69.
Tendi Sherpa, who won the best gross award on the count back was tied with Shyam Krishna Simkhada. Tendi carded five-over 41 on the back-nine whereas Shyam scored 46 (10 over).
Similarly, in the junior category, Aditi Ghimire won the title with total 140 points. Sam Doublard who stood second in the tournament with 100 points, also bagged the best junior title. Doublard was followed by Arnav Shah and Manyak Dhakal with 60 points each.
The tournament was sponsored by Surya Nepal where a total of 41 players took part. Captain of Gokarna Golf Club, Joseph Nathan gave away the prizes to the winners. 
After the second edition in gross category, Tendi Sherpa is in the first place of the scoreboard with 160 points followed by Brian Fawceet and Vijay Einchaus with 100 points each.
Pemba Wins Opening Edition of Carlsberg Golf Series 2015
Pemba Sherpa drew the first blood in the Carlsberg Golf Series edging Young Man Go to win the opening edition at the Gokarna Forest Golf Resort on June 27. 
Sherpa, playing with 8 handicap, scored 42 points to beat South Korean Young by one point. Pemba, who now leads the nett category with 100 points, scored 22 points on the front nine sinking birdies on the fourth and seventh holes against bogeys on second and sixth. His sole birdie in the back nine came on the 18th hole.
Young was playing with a 15 handicap and scored 20 points on the front nine and 21 in the other half. Go is second in the nett category leaders with 60 points. Tashi Tsering scored 28 points to win the gross category beating Lobsang Tashi by 36 points. Tsering scored four birdies on the third and ninth on the front nine and added two more on the 13th and 15th on back nine.

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