Earthquake Affects Power Projects
The April 25 devastating earthquake has shut down ten out of 43 hydropower plants that were generating electricity. According to the Independent Power Producers’ Association Nepal (IPPAN), some nine other plants have suffered minor to major damages. The shut plants are Bhotekoshi (45 MW), Sunkoshi Khola (2.5 MW), Chaku Khola (3.45 MW), Baramchi (4.2 MW) and Spring Khola (9.658 MW). Also, Mid Chaku (1.8 MW), Lower Chaku Khola (1.765 MW), Aankhu Khola-1 (8.4 MW), Mailung Khola (5 MW) and Bhairab Kunda (3 MW) have been closed.
The closure of these plants has halted the production of 85 MW of electricity, said IPPAN General Secretary Kumar Pandey. According to Pandey, the bigger Bhote Koshi project is damaged with its penstock pipe cracked due to falling stones. Aftershocks and landslides have seriously damaged the sub-stations, power houses, head race pipes, switch yards, and transmission lines of different plants. Indrawati-3, Khudi Khola, Hewa Khola, Siwori Khola, Lower Modi-1, Bijayepur-1, Jiri Khola, Upper Hogdi Khola and Radhi Khola are the other hydro projects damaged. Indrawati-3 faces serious damage.
The 4.4 MW Radhi Khola will not be able to operate at its fullest capacity. Repair will take around 30 days and service will be shut for 15 days.
“Some projects that have come into operation now are facing shutdown due to problems,” said Pandey. Most of the closed plants are in Sindhupalchowk. Many projects in the central and western region are damaged and closed, informed IPPAN. The other 24 projects operated by the private sector are safe.
Good News for Nepali Tourism
Nepal is making progress in the tourism sector, according to the Travel and Tourism Competitiveness Report 2015 published by the World Economic Forum. The study that was conducted in 141 countries states that Nepal ranks 102 scoring 3.27 marks. The study has focused on development like commercial environment, infrastructure, rules and regulation and natural and cultural resources. Nepal ranked 112 according to the same report published in 2013.
Nepal ranks 26 worldwide on the basis of competitive pricing. Nepal has beaten countries like Japan, Singapore, Hong Kong, Germany, Switzerland and Norway in this segment. Nepal’s five star hotels are still charging rooms for USD 100. According to the Ministry of Culture Tourism and Civil Aviation, the average expenditure of tourists visiting Nepal is USD 46 per day where previously it was USD 42.
Also Nepal ranks 25 in natural resources. The census of the ministry shows that more tourists come to Nepal for mountaineering and hiking. But an unstable business environment puts Nepal at 133 in this segment. The time to time strikes have contributed to this, said entrepreneurs. Making some progress, in air transport infrastructure Nepal ranks 106. It ranked 121 in 2013.
Marks out of seven were given for the index. Spain ranked number 1 scoring 5.31 marks and France, Germany, USA, UK and Switzerland ranked 2nd, 3rd, 4th, 5th and 6th respectively.
India Simplifies Transit for Relief Supplies
The Government of India has decided to simplify the procedure of transit clearance in order to facilitate relief supplies to Nepal. A press release from the Indian Embassy in Kathmandu said the Central Board of Excise and Customs (CBEC), Ministry of Finance, Government of India, had been told to make such arrangements..
This simplified procedure would be applicable to goods of international relief agencies/ governments as duly authorized by the Government of Nepal or its Embassy/ Consulate General in India. The donor government or agency has been given option to file the Simplified Declaration of Transit in case they do not opt to engage the customs brokers.
Moreover, India has decided that no bond, security or bank guarantee would be required for the transit of relief materials.
Transit of relief cargo has been additionally allowed through airports at Delhi, Lucknow, Varanasi, Patna, Kolkata and Bagdogara. Similarly, cargo in containers can be transshipped to Nepal from the Inland Container Depots (ICDs) at Delhi and Kanpur. In normal situations, the transit of cargo to Nepal was allowed only through the Kolkata and Haldia ports.
Additionally, CBEC has allowed advance filing of CTD and also instructed customs officers for clearance beyond the designated hours of business. The simplified procedure would be applicable via the Land Customs Stations at Raxaul, Jogbani, Sunauli, Panitanki and Nepalgunj Road. The simplified transit procedure would be applicable for six months with an option to extend further on mutual agreement between the governments of India and Nepal.
MetLife Settles 51 Insurance Claims
MetLife Nepal, a branch of multinational insurer MetLife operating in Nepal since 2001, settled 51 death claims resulting from the recent earthquake. The settlement amount had crossed more than Rs 10 million as of May 25.
MetLife says it was the first insurance company in Nepal to settle a claim resulting from the recent earthquake. Chairman of Insurance Board, Dr Fatta Bahadur KC handed over cheques to the beneficiaries of the insured on April 28. Within just two days of the first earthquake, the company had opened a help desk at its Head Office in Pulchowk so that policy holders could promptly submit their claims. Claims are said to be being settled within 24 hours following a simplified settlement process, with the help of its agents.
The company has also donated half a million rupees to the Prime Ministers’ Disaster Relief Fund through the Insurance Board. In addition to this, the MetLife Foundation contributed to International Medical Corps’ Nepal Earthquake Fund to provide relief supplies and life-saving healthcare services and training.
Insurance Claims Rise
The April earthquake has caused a surge in non-life insurance claims. The 16 non-life insurance companies currently operational have received 4000 claims. However, IB Chairman Prof Dr Fatta Bahadur KC said that the claims are not big. According to Chandra Singh Saud, CEO of Nepal Insurance, on an average, each non-life insurance company is likely to face claims amounting to Rs 1 billion. “Companies have just mobilized their surveyors and claims could reach up to Rs one billion or more per company in average,” said Deputy General Manager of Sagarmatha Insurance, Chunky Chhetry. According to him, his company had received more than 700 claims till May 7. The agreements for excess of loss, catastrophe loss etc signed by insurance companies with reinsurers differ from company to company. Saud said fire insurance coverage stands in the billions of rupees as Nepal Insurance alone has provided a fire insurance coverage of Rs 84 billion.
IFC,FMO to Invest USD 6 Million in Hotel Fairfield Marriott
The International Finance Corporation (IFC), the private sector arm of the World Bank Group, will invest USD 3 million in Hotel Fairfield Marriott being constructed in Thamel, Kathmandu, by MS Group, a leading Nepali business house. In addition to its own investment, IFC will mobilize USD 3 million from FMO, the Netherlands-based development bank.
Fairfield Marriott will be a greenfield,3-star hotel. Nepal Hospitality and Hotel Private Limited, the hospitality wing of MS Group, is building the hotel with an investment of more than Rs. 1.22 billion. The hotel will be operated by international chain Marriott under its Fairfield brand.
“The investment will increase Nepal’s capacity in the mid-market hotel segment, create jobs, and promote energy-efficient hotel design,” said a press statement from IFC.
These investments will help build skills of those employed in the sector and contribute to the development of local supply chains.IFC will also help Nepal Hospitality and Hotel adopt green building design and construction principles to implement energy and water-efficiency measures.
Commenting on the development, Gaurav Agarwal, Managing Director of Nepal Hospitality and Hotel, said, “This deal, amidst the recent earthquake, reaffirms that the Nepali private sector, IFC, and FMO are committed towards economic prosperity in Nepal. The 110-room Fairfield Kathmandu, the first internationally-branded, professionally-managed mid-market hotel in Nepal, will stimulate tourism and support the economy. The green building design will serve as a model for replication across the industry.”
"IFC remains committed to supporting Nepal as it rebuilds its tourism industry following the devastating earthquake in April, 2015. Investments that support vital economic industries like tourism, will send a strong signal to international investors that Nepal is poised for growth and is an attractive destination that continues to cater to traveler needs,” said Kyle F. Kelhofer, IFC Country Manager for Bangladesh, Nepal, and Bhutan.
The British College Wins CIMA Global Business Challenge Nepal 2015
The British College cleanly outperformed the other competing colleges in the CIMA Global Business Challenge, Nepal 2015 by coming out as the winner and also bagging the Best Speaker Award. The Challenge was held at the Radisson Hotel on 26th May, 2015. The other colleges in order were Nepal Commerce College, KUSOM and Islington College. This year, there were 148 teams from 37 colleges across Nepal.
The winning undergraduate students from The British College were Angel Sharma, Safalta Shrestha, and Team Leaders Kalpana Pant and Priyanka Puri. Sharma bagged the Best Speaker award. He had received the same Best Speaker award last year (2014) as well.
When asked about the success, Team Leader Pant said, “With this win and success in the Nepal Finals, the motivation and confidence to win the Global Finals has now become stronger and winning the Global Finals would make us all Nepalis proud in spite of the earthquake and the continuing aftershocks.”
CIMA Global Business Challenge is a competition amongst undergraduate students of the world organised by CIMA (Chartered Institute of Management Accountants, UK) in partnership with Barclays Bank. Globally, the competition has grown from eight participating regions in 2009 to 26 regions in 2015.
This year, the Global Finals will be held in Warsaw in Poland in August 2015 with 25 competing countries. The winning team from Nepal, The Doers of The British College, will participate with all expenses paid by CIMA.
Insurance Company Surveyors Mobilized
Surveyors of insurance companies have been mobilized to assess the damage caused to insured properties by the earthquake. According to the Insurance Board (IB), there are 200 surveyors in the country now. “Almost all the surveyors have been mobilized to assess the damage,” said IB Chairman Prof. Dr. Fatta Bahadur KC. “In our association, 125 surveyors are registered. But only 25 of them where active in the past,” said chairman of Nepal Surveyors Association, Surya Joshi, “But now, almost all surveyors in the country have been mobilised.”
Following the earthquake in Nepal, some Indian reinsurance companies, too, have sent their surveyors to assess the damage as many insurance companies have done reinsurance with Indian companies. One such Indian company is the General Insurance Corporation (GIC) which has sent three surveyors to Nepal. The reinsurance agreements between Nepali insurance companies and Indian reinsurance companies also have the Claim Control Clause. As per this clause, the reinsurance companies can mobilize their own surveyors if the claim is bigger than a certain limit.
Qatar Airways Supports Relief Efforts
Qatar Airways Cargo has continued its relief efforts to Nepal, operating a total of 12 freighter services to deliver urgent aid to Kathmandu following the devastating earthquakes that recently hit the country.
The cargo carrier’s first freighter left Doha for Kathmandu within 24 hours of the earthquake and was the first commercial airline to touchdown at Tribhuvan International Airport following the first earthquake.
Qatar Airways Group Chief Executive, Akbar Al Baker said, “Qatar Airways was able to respond rapidly to support the people of Nepal, providing dedicated freighter aircraft to transport much needed relief aid, including medicine, food, water, generators and volunteers, to those in need. The relief aid was supposed to be around 400 tonnes.”
Qatar Airways Cargo worked in conjunction with local and international charities to provide free transportation of food and water filters to support Nepal’s recovery and to provide aid to areas of the country that have no clean water as a result of the disaster. The aid is said to be distributed by local charity groups throughout the capital.