R&D_NewsBrief_23rdJul

R&D Economic Research & Business

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Date: July 23, 2009

Highlights

• Eager to counter China's strategic inroads into Nepal, India has promised to bolster defense cooperation with the Himalayan country, including resumption of arms supplies which had run into rough weather in recent times.

• UCPN (Maoist) Chairman Puspha Kamal Dahal has strongly objected to the government’s request to New Delhi to resume the supply of arms, which had been put on hold since the February 2005 royal takeover.

• Nepal Police's call for reciprocity in handing back fugitives involved in high-profile crimes goes largely unheard even though the country has had the International Police (Interpol) issue Red Corner Notices (RCNs) against them, local newspaper The Kathmandu Post reported Wednesday.

• Prime Minister Madhav Kumar Nepal has said increasing extremism of the communist groups in the country is likely to derail the rights and freedom enjoyed by Nepali people.

• Prime Minister Madhav Kumar Nepal on Wednesday visited the Narayanhiti museum. He gave his assurance that he would take the initiative to re-open the royal massacre file to unveil the truth.

• A sitting member of the National Human Rights Commission (NHRC) has said that the institution is marred by financial irregularities.

• Owing to serious differences among the ministers, the Administrative Committee of the Cabinet on Wednesday failed to take a decision on the promotion of 22 joint secretaries to the post of secretaries.

• Nepal Rastra Bank (NRB) will hand over the management of Bank of Kathmandu (BoK) back to the bank’s new Board of Directors (BoD) tomorrow after BoK’s special AGM today formed the new board.

• Constituent Assembly (CA) members have requested the government to differentiate between large banks and non-profit micro finance companies regarding tax rates. The government has lumped both types of institutions in the same category for taxation purposes.

• Even though the government has announced a two-year recapitalization plan for Rastriya Banijya Bank (RBB), Finance Minister Surendra Pandey said on Monday that the actual implementation of the plan would depend on the performance of the bank itself.

• Nepal Rastra Bank (NRB) has removed Nepal Cottage and Small Industries Bank and Arun Finance from the list of crisis-ridden banks after new investors


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pumped cash into them to bring up their capital fund and primary capital to the required level.

• Nepal Rastra Bank's (NRB's) decision prohibiting import of construction goods for hydro projects above five MW from India through Letter of Credit (LC) on convertible foreign currency has affected hydropower development.

• Telecommunication service providers, due to increasing competition, are upgrading their services. Nepal Telecom (NT), Spice Nepal Pvt Ltd (SNPL) and United Telecom Ltd (UTL) - the three major telecom service providers - are constantly upgrading their services to capture the market.

• NT has started its new scheme for senior citizens since July 12. Under this scheme, senior citizens aged 60 or above can get an NT pre-paid SIM card for Rs 650 with a free talk time of Rs 500.

• A group of gold and silver traders has come together to buy and sell gold and silver jewelries in an institutional manner and to produce the ornaments in a modern way and make them competitive in the international market.

• The Nepali foreign employment sector is plagued with large-scale fraud and the fiscal year 2008-09 was no exception in this regard. According to data of the Department of Foreign Employment (DoFE), 865 cases of fraud were registered with the department in 2008-09 claiming compensation equivalent to Rs 525.17 million.

• In a startling revelation, it emerges that Koshi Petrochemicals,which made a ´back-door entry´ into the state-controlled petroleum trade and claimed to be producing diesel by processing crude oil, never imported any crude oil.

• The government started a debate on deregulation of the petroleum sector, market operation norms, formation of an independent Petroleum Authority to oversee the sector and benchmarks for pricing and quality, but no substantial headway has been made.

• The prices of vegetables and fruits have skyrocketed due to the short supply of fresh vegetables in market. In a month´s period, prices of some vegetable and fruit items have almost doubled.

• The Nepal Stock Exchange (NEPSE) went down Tuesday by 1.05 points. The sensitive index also fell by 0.24 point. The development bank sector, the only one among the sub-indices to post an increase gained 0.21 point.

• The government has prepared an action plan to achieve its massive revenue collection target of Rs. 176.5 billion for the current fiscal year. The strategy includes broadening the tax net and strengthening the capacity of government agencies responsible for revenue collection, said Krishna Hari Baskota, acting revenue secretary of the Finance Ministry.


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• The number of Nepali migrant workers leaving for labour destinations around the world decreased by 12.80 percent during the last fiscal year due to the worldwide recession.

• Nepali police on Wednesday claimed that a military commander of Terai-based rebel group Terai Madhesh Rastra Mukti Sena (TMRMS) has been shot dead in police firing in Janakpur, some 120 km south of capital Kathmandu.

• A team of Nepali police destroyed around 3,000 chicks smuggled into Nepal from India fearing bird flu (avian influenza), Nepali national news agency RSS reported on Wednesday.

• One of Nepal’s best-known astrologers, a globe-trotter who has attended astrological meets in Britain, Japan, France and Germany, warned that Wednesday’s solar eclipse would cause further unrest in India, Nepal and China.

• The government is preparing to reduce the number of public holidays currently enjoyed by civil servants, as recommended by the Administration Restructuring Commission (ARC). ARC´s recent report has suggested to the government to cut the number of annual public holidays from 41 days to seven days. The ARC report says that the recommendation was made as too many public holidays have a negative impact on the public.

POLITICS:

India promises to resume arms supplies to Nepal

NEW DELHI: Eager to counter China's strategic inroads into Nepal, India has promised to bolster defense cooperation with the Himalayan country, including resumption of arms supplies which had run into rough weather in recent times.

This came after visiting Nepal defence minister Bidya Devi Bhandari, leading a 10-member delegation, held talks with her Indian counterpart A K Antony and other top military brass on Tuesday.

The recruitment of Nepalis in Indian Army's Gorkha Rifles also figured in the talks. The earlier strife engulfing Nepal ensured no recruitment rallies were held for the purpose since September 2006.

It was only in February-March this year that the Indian Army once again began the process, with rallies in Dharan (eastern Nepal) and Pokhara (central Nepal), attracting over 15,000 applicants.

There are over 30,000 Nepali Gorkhas currently serving in Indian Army's seven Gorkha Rifles (Ist, 3rd, 4th, 5th, 8th, 9th and 11th), each of which has five to six battalions, and some paramilitary forces.


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India, of course, had been caught off-balance after the Maoists emerged victorious in Nepal's constituent assembly elections and Pushpa Kamal Dahal `Prachanda' was sworn in as the PM last year.

With the Maoists tilting clearly towards China, India had to then scramble to engage them in à constructive manner'. The situation, of course, is yet to settle down fully in Kathmandu following Prachanda's resignation after failing to sack Nepal Army chief General Rookmangud Katawal in a power struggle with President Ram Baran Yadav.

Source: timesofindia.indiatimes.com Date: July 22, 2009

Indian arms will imperil peace: Dahal

UCPN (Maoist) Chairman Puspha Kamal Dahal has strongly objected to the government’s request to New Delhi to resume the supply of arms, which had been put on hold since the February 2005 royal takeover.

“If Defence Mini-ster Bidhya Bhandari makes a deal with India to resume arms supplies while the peace process is still on, it will effectively imply that the peace process has come to an end,” said Dahal. “This could lead to bloodshed in the country and the current government will be responsible for untoward incidents that could follow.”

The former prime minister said so commenting on the possible resumption of arms supply from New Delhi. During a meeting with her Indian counterpart A.K. Antony and Foreign Minister S.M. Krishna in New Delhi on Tuesday, Bhandrai had asked for resumption of arms assistance to Nepal. The Indian ministers had assured that India was ready to assist Nepal as per the country’s needs.

“I asked them to continue assistance in the military sector in the same way as they are helping us in health and education,” Bhandari told The Post in New Delhi on Tuesday.

Source: www.kantipuronline.com Date: 2009-07-23

Interpol calls from Nepal go unheard: report

Nepal Police's call for reciprocity in handing back fugitives involved in high-profile crimes goes largely unheard even though the country has had the International Police (Interpol) issue Red Corner Notices (RCNs) against them, local newspaper The Kathmandu Post reported Wednesday.

Senior Nepali police officers lament privately and claim to possess credible information that many on the run are currently based in India, with some doing time in Indian jails, according to the report.


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The Interpol has issued red corner notices against at least 25 fraudsters, underworld dons, kidnappers and murderers, lodged by the Nepali authorities.

Interpol's RCN allows the warrant to be circulated worldwide with the request that the wanted person be arrested with a view to extradition. But this has not been truly followed owing to Nepal's lack of extradition treaty with many countries, lament police.

Owing to the lack of extradition treaty, Nepal has not been able to bring home those at large, including Rahul Haldia. He is wanted for the last three years for embezzling fund worth 36 million Nepali rupees (around 450,000 U.S. dollars) from a company named Dabur Nepal. According to police, the former chartered accountant is residing in Alwar, Rajasthan of India.

Sandeep Pathak (also known as Milan Lama), implicated in an attempt to murder Dr. Hemnag Dixit and believed to have been involved in high-profile extortion and abduction cases, has been in police custody in India since October 2007, according to the report.

Indian police have arrested five other Nepalis, namely, Babloo Srivastav (Om Prakash Shrivastav), Rajendra Prasad Sharma, Archana Sharma, Magga Sardar and Rajendra Nikalje Sadashiv. The Interpol has issued red corner notices against them for involvement in the assassination of former member of parliament Mirza Dil Sad Beg. They are in Indian jails as they are also wanted there. All are believed to have nexus with the underworld don Ibrahim. Siddartha Lama, who kidnapped Dr. Upendra Devkota's daughter, is in jail in Darjeeling, the newspaper reported.

Ian Baker, a U.S. citizen, was "in illegal possession of animal parts and other rare artifacts in his rented apartment in the country." "Time and again, the Nepal section of Interpol has written to its U.S. counterpart to send him back, but to no avail -- say police officers," the report said.

Source: news.xinhuanet.com Date: July 22, 2009

PM says communist extremism increasing

Prime Minister Madhav Kumar Nepal has said increasing extremism of the communist groups in the country is likely to derail the rights and freedom enjoyed by Nepali people.

While unveiling the new full-stature statue of the founder of communist party in Nepal, Pushpa Lal Shrestha, in Champadevi on Wednesday, PM Nepal said communism and democracy in Nepal are like synonyms. He further claimed that philosophy propounded by Madan Bhandari (Janatako Bahudaliya Janabad) is the appropriate instrument for unification of communist forces here.


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Nepal also underlined the importance of political unity among the parties at this transitional period, adding that parties must support the current coalition government instead of criticising its activities.

Stating that the government was formed under the spirit of consensus, he alleged those criticising the government to be against democracy and peace.

He repeated his calls for Unified CPN (Maoist) to join the government.

Source: www.nepalnews.com Date: July 22, 2009

PM visits Narayanhiti museum

KATHMANDU: Prime Minister Madhav Kumar Nepal on Wednesday visited the Narayanhiti museum. He gave his assurance that he would take the initiative to re-open the royal massacre file to unveil the truth. He also authorized the reconstruction of the Tribhuwan Sadan, which was destroyed by former King Gyanendra Shah. The PM was accompanied by Home Minister Bhim Rawal, Finance Minister Surendra Pandey and his family members.

Source: www.thehimalayantimes.com Date: July 22, 2009

POLICY:

Corruption slur on NHRC

KATHMANDU, July 23: A sitting member of the National Human Rights Commission (NHRC) has said that the institution is marred by financial irregularities. “Yes, NHRC is marred by financial irregularities,” said Commissioner Dr Leela Pathak in an interview with myrepublica.com.

The former general secretary of Transparency International, Nepal, said the national rights watchdog bought vehicles worth Rs six million in a non-transparent way by violating existing procurement law. She further said she has been isolated in the office and is thus in a difficult position to work at the office. She is considering quitting the office if the situation at NHRC does not improve and Secretary Bishal Khanal resigns.

Source: My Republica

Panel fails to name secretaries


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KATHMANDU, July 22: Owing to serious differences among the ministers, the Administrative Committee of the Cabinet on Wednesday failed to take a decision on the promotion of 22 joint secretaries to the post of secretaries.

The meeting headed by Prime Minister Madhav Kumar Nepal at his official residence in Baluwatar lasted for five hours, but ended inconclusively after the ministers differed over the distribution of the position of secretaries among their favorites.

The secretary promotion committee has recommended 66 joint secretaries as eligible for the promotion, but only 22 such positions are vacant.

"Nepali Congress ministers pressed for the promotion of so many joint secretaries, that the committee could take no decision on the matter," a source said.

Though only 22 positions are vacant, altogether 29 names were proposed in the meeting for promotion. According to a source, the NC proposed names of 16 joint secretaries and the UML proposed 11 names for the promotion. Ministers from Madhes-based parties did not create any obstacle as other members of the committee passed the names of two joint secretaries from their community. "Joint secretaries Ram Swarup Sinha and Nathu Prasad Chaudhary are almost confirmed for the promotion," the source told myrepublica.com.

"We discussed the recommended names and agreed to select the 22 names for promotion only tomorrow," Minister for General Administration Rabindra Shrestha told reporters. He, however, denied that there was any dispute among the committee members over the recommended names. According to him, Thursday´s meeting will take place only after the cabinet meeting.

Minister Prakash Sharan Mahat said that the meeting couldn´t take a decision due to the lack of adequate homework. "We thoroughly looked into the recommended name list and agreed to hold a meeting on Thursday to finalize the names," Mahat said.

According to Mahat, not all of the acting secretaries have possibility of being promoted to the vacant posts. "Though all 66 candidates are qualified, we have to seriously study on how to select only 22 from among them," Mahat told reporters.

"NC´s stand compelled us to defer the meeting," another source who participated in the meeting told myrepublica.com on condition of anonymity.

According to the provision of Civil Service Act, a joint secretary who has served for five years is eligible for the post of secretary. This time, no women candidate has been recommended for the promotion to the post of secretary.

The posts of 22 secretaries have remained vacant for the past two years.


BANKING:


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NRB to roll back curb, hand over mgt to BoK

KATHMANDU: Nepal Rastra Bank (NRB) will hand over the management of Bank of Kathmandu (BoK) back to the bank’s new Board of Directors (BoD) tomorrow after BoK’s special AGM today formed the new board.

“The present management committee appointed by NRB for using the authority of BoD - led by Laxmi Prapanna Niroula as co-ordinator and Ramesh Kumar Pokharel, Prem Prasad Pandey, Murari Basnet as members - will hand over the management to the new BoK board tomorrow,” said an NRB source. “NRB will recall its team,” the source said. BoK today elected four directors from public shareholders - Govinda Regmi, Bishnu Banjade, Narendra Basnyat and Dr Hem Subedi - and unnanimously selected three directors Ramesh Nath Dhungel, Bijaya Krishna Shrestha and Satya Narayan Manandhar from the promoters.

Five contestants from the public - along with former director Balaram Neupane - had filed their candidacy for the four positions as a majority of BoK’s shares is with the public. The promoters hold 42 per cent.

On May 19, NRB had taken over the bank’s management suspending its board and sent a four-member team led by NRB executive director Niroula. This was after the BoK board’s controversial decision to ‘call back’ Radhesh Pant as managing director.

The crisis precipitated after the 313th board meeting of BoK on March 22, which decided to recall Pant from the post of MD. Though the decision was taken by a majority of the board members, Pant was not given a chance to furnish his explanation. Four directors voted against him while two - Sitaram Thapaliya and Sudarshan Poudel - supported him.

The NRB action was a strong signal that the regulatory authority of the monetary market was keeping a hawk’s eye on financial institutions. It is empowered to take over the management of any financial institution under NRB Act 2063 (Section 54) after giving it a seven-day chance to furnish an explanation.

However, NRB revoked its earlier decision to suspend the directors on June 25 and allowed them to contest in the special AGM after the suspended board agreed to work together for the good of the bank, investors and promoters.

Suspended board members, who had moved the Supreme Court against NRB also withdrew the case. NRB had published a Due Deligence Audit report on June 27 and called BoK’s special AGM for today.

Source: www.thehimalayantimes.com Date: 2009-07-22

RBB told to improve performance for recapitalization

KATHMANDU, July 22: Even though the government has announced a two-year recapitalization plan for Rastriya Banijya Bank (RBB), Finance Minister Surendra


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Pandey said on Monday that the actual implementation of the plan would depend on the performance of the bank itself.

“All the public sector entities are faring badly despite injecting of capital and other reform efforts. The government, hence, is no more willing to inject more capital in them. The management and employees at RBB should be aware of it,” said Pandey.

Pandey said this while referring to the need of recapitalizing the bank. The management has pleaded the government to re-inject around Rs 7 billion in the bank.

At the 20th annual general meeting of the bank, Pandey mainly urged the bank to improve its efficiency and step up loans recovery -- the two crucial objectives behind introducing reforms in the bank. He even flayed únionization´ of employees and instructed them to focus on their jobs than in ´politics´.

Following the introduction of reforms, the bank has cut staffs, streamlined its operations and managed to post profits. However, its financial picture still casts a gloomy look.

Janardan Acharya, chief executive officer of the bank said that the bank earned net profit of Rs 2.21 billion in the last fiscal year and managed to post cash recovery of Rs 2.15 billion of its bad loans during the period. “The bank´s performance has improved in a big way, and non-performing loans have dropped to 15 percent of the total loan portfolio,” he added.

Still the financial outlook of the bank cast gloomy look. The bank has negative net worth of some Rs 13 billion. It still has bad loans of Rs 5.40 billion to recover. “The face of the bank still does not look pleasant, but it will change in two years,” assured Acharya.

Acharya stated that the bank would soon dispose shares of Nepal Investment Bank that it owns. “We expect it to fetch around Rs 5 billion. With profits and recovery over the next two years, and of course, implementation of the recapitalization plan, we will turn around its outlook,” he added.

In a bid to give new boost to its operations, RBB management has announced that it will relocate some 12 branches, whose operations were merged with other branches during the conflict period, in their original places.

“We have already automated 110 branches and will computerize the rest soon,” said Acharya, elaborating that the bank would install a large number of automated teller machines (ATMs) over the next few months.

At the program, the bank unveiled a plan to add 18 new ATMs within the three months and install additional 20 ATMs by the end of next six months. RBB presently has 12 ATMs.



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Urge to reduce interest rates

Constituent Assembly (CA) members have requested the government to differentiate between large banks and non-profit micro finance companies regarding tax rates. The government has lumped both types of institutions in the same category for taxation purposes.

The CA members also focused on decreasing the interest rates for these micro finance companies which aim to help the rural public outside the Kathmandu Valley. There are many micro finance companies and cooperatives in the eastern region of the country.

A team of 20 CA members visited the east to do a survey of these micro finance companies and found that the government had kept them under the same tax policy as the larger banks in the country. They were there to study the effects of the micro finance programmes on the lives of the people.

They have also said that the government should motivate the micro finance sector besides promoting it. The government should allow these banks to provide loans to the rural public without collateral, they said.

CA member Shanti Adhikari said that the government should free these micro finance companies from the tax rates. She added that the government should make efforts to manage the micro finance sector and form a finance commission to provide easy accessibility to the rural people.

Similarly, another CA member Bishnu Bik said that people in the past used to put up their lands and houses as collateral and take loans at an interest rate of about 60 percent. "But micro finance companies today should provide loans at 20 percent interest and without collateral which will increase the living standards of the locals in the respective areas," Bik added.


Bank, finance co. off crisis-ridden list

Nepal Rastra Bank (NRB) has removed Nepal Cottage and Small Industries Bank and Arun Finance from the list of crisis-ridden banks after new investors pumped cash into them to bring up their capital fund and primary capital to the required level.

With this move, the suspension on deposit collection and lending by them has also been removed, said central bank officials.

"NRB is also going to strike United Development Bank off the list within a week," said Gopal Kafle, executive director of NRB. "United submitted its documents some days later which is the reason for the delay."

All three financial institutions have met the criteria fixed by the central bank to be removed from their crisis-ridden status, he added.


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A team led by industrialist Laxman Babu Shrestha has invested more than Rs. 550 million in Nepal CSI by purchasing its promoter's shares, said NRB officials. "With the injection of additional capital by the existing promoters, the total paid-up capital of the bank has reached Rs. 700 million,” Kafle said.

"With the capital injection, the primary shares and capital fund has reached 53.48 percent and 54.65 percent respectively," said an NRB official. "That's why we released it from our actions."

The central bank has also issued the direction that the board directors could not charge more than Rs. 1000 as a meeting allowance for each person and the salary of the chief executive officer should not exceed Rs. 75,000 per month, according to the official.

It should increase its paid up capital to one billion rupees for which it should issue ordinary shares by mid-January as per the NRB direction. The bank should also decrease its Non-Performing Loans (NPL) to 10 percent by that time and it need to zero it by mid-July 2010.

Before fresh money poured in, its core capital and capital fund was negative by 30 percent as of mid-July last year, according to NRB. Its non-performing loans stand at 84.47 percent as per the latest figure currently. Dharan-based Arun Finance has increased its capital to Rs. 80 million with fresh investments from a group led by Bashubhakta Shrestha, and the bank has been freed of its money problems. It aims to become a national level finance company which requires a paid-up capital of Rs. 200 million by 2070 B.S. According to NRB officials, the bank has already surpassed its required capital to keep the company positive in terms of capital fund.

The company was declared crisis-ridden on Nov. 23, 2005. Its core capital and capital fund was negative by 52 percent as of mid-April 2007.

United Development Bank has also expanded its paid-up capital to Rs. 60 million which is sufficient to put the bank in a healthy condition as per the NRB definition, said central bank officials. A group led

by Rabindra Bahadur Singh has invested in the bank located in Bara. The bank serves Bara, Parsa and Rautahat districts.

Its capital fund and core capital was negative by 50 percent as of mid-July last year. The regional bank was declared to be crisis-ridden on Dec. 18, 2006.

Kafle said that the central bank has ensured that its old promoters would not have a major say in the bank's operation with their small representation on the board. He added that NRB would always help financial institutions desiring to do better.

Source: www.kantipuronline.com Date: 2009-07-21 NRB’s LC decision affect hydropower dev


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Nepal Rastra Bank's (NRB's) decision prohibiting import of construction goods for hydro projects above five MW from India through Letter of Credit (LC) on convertible foreign currency has affected hydropower development.

NRB's decision has increased project costs by 25 percent from the estimated cost.

Generally, it costs about Rs. 150 million to generate MW. However, the NRB decision to stop issuing LC to domestic developers for projects above five MW is expected to increase the project costs by more than Rs. 30 million for each megawatt.

The foreign exchange department of NRB in March 2006 had decided to allow 'A' class financial sectors to issue LC for promoters with capacity below five MW to import construction goods from India.

According to Bishwa Nath Kandel, executive director of Ankhu Khola Hydro Electricity Project (seven MW), local developers involved in hydropower projects with more than five megawatt capacity have been affected. "Most developers who were in the process of acquiring hydro project construction materials from India have been seriously affected," he said.

The Indian government has provision of exemption of income tax, excise duty and other fees for goods that earn foreign exchange.

In 2008, NRB had decided to issue LC to import 124 different construction materials and equipment. "However, the NRB decision to stop issuing LC to projects above five megawatt has seriously impacted the construction of the hydro projects now," said Kandel.

More than one dozen hydro projects with capacity of about 50 MW have entered power purchase agreement (PPA) after implementing the policy.

"Some projects that are underway or have already finished PPA are likely to be affected due to the NRB decision," said Yagya Prasad Subedi, promoter of the 20 MW Lower Balefi Hydro Project.

"The decision goes against national developers working for hydro development in the country," said Kandel.


BUSINESS & ECONOMY:

Telecom service providers vie for the biggest slice of the pie

KATHMANDU: Telecommunication service providers, due to increasing competition, are upgrading their services. Nepal Telecom (NT), Spice Nepal Pvt Ltd (SNPL) and United Telecom Ltd (UTL) - the three major telecom service providers -


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are constantly upgrading their services to capture the market. They are engaged in bringing latest and most advanced technologies in the market. One of these is Caller Ring Back Tone (CRBT) service that all the three service providers have.

Nepal Telecom (NT) started its Caller Ring Back Tone (CRBT) services in Lumbini, Dhaulagiri, and Gandaki zone from Ashad 1 and now it is available in Bheri Zone too. According to NT spokesperson Surendra Bahadur Thike, the company is also planning to extend CRBT service to Birgunj within two months. Previously, NT’s CRBT service was available within Kathmandu Valley only.

SNPL - the provider of Mero Mobile - started Personalised Ring Back Tone (PRBT) in 2006 and it is available in all regions with Mero Mobile services. UTL started its CRBT service this Baishak (April 16), and is providing service in Banepa, Nepalgunj, Bhairahawa, Biratnagar, Narayanghat, Hetauda, Dharan and Birgunj.

With CRBT, customers of NT, Mero Mobile and UTL can download songs, music and video clips. CRBT is an intermittent audible indication that a dialled telephone number is ringing. A ring back tone is a status indicator that the dialled number is available and that all connections through the appropriate network or networks between the originating and destination devices are either available or will be, and also that the call can be connected if someone answers the call.

The ring back tone generally starts and stops at the same rate as the ringing tone of the called telephone, but generally is out of phase, i.e., staggered in time. Personalized ring back tones recently have become popular, especially in cell phones.

Dozens of music genres and hundreds of selections are commonly available for both the ring back tone and the ringing tone. The service generally is on a subscription basis and carries an additional charge per tone selected. According to NT, except the charges of SMS and Interactive Voice Response (IVR) the charge per CRBT will be Rs 10 while Mero Mobile charges Rs 10 per song excluding taxes and monthly charge of Rs 30 for its PRBT service, said Mero Mobile senior brand manager Sanat Sharma.

Through PRBT service customers can assign different ringtones for different people and for different times, Sharma added. It is now four months that UTL has started its CRBT service in which the charge per song is Rs 12.43 per CRBT, a monthly charge of Rs 37.29 and song selection charge per minute Rs 3.73.

Wooing the elderly

KATHMANDU : NT has started its new scheme for senior citizens since July 12. Under this scheme, senior citizens aged 60 or above can get an NT pre-paid SIM card for Rs 650 with a free talk time of Rs 500. The normal charge of NT SIM is Rs 1135. According to Thike, the scheme is for senior citizens and physically challenged people. Requirements are citizenship certificate with passport size photo or a government valid document mentioning exact age of the senior citizen wanting to get the NT SIM. The scheme is valid for a limited period and is available in Kathmandu and Biratnagar.


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Bullion traders join hands to gain competitive edge

A group of gold and silver traders has come together to buy and sell gold and silver jewelries in an institutional manner and to produce the ornaments in a modern way and make them competitive in the international market, national news agency reports

Eleven traders have opened three gold shops and two silver shops in Pokhara with an investment of Rs 50 million to produce ornaments with guarantee on brand image, quality and weight. They plan to open branches in Tansen of Palpa and Kathmandu as well.

Source: www.nepalnews.com Date: July 21, 2009

DoFE burns midnight oil to curb sector fraud

The Nepali foreign employment sector is plagued with large-scale fraud and the fiscal year 2008-09 was no exception in this regard. According to data of the Department of Foreign Employment (DoFE), 865 cases of fraud were registered with the department in 2008-09 claiming compensation equivalent to Rs 525.17 million.

Of the 865 cases registered with DoFE, 506 (58.49 per cent) pertained to individual fraud and 359 (41.51 per cent) related to organizational fraud. The average number of fraud cases registered with DoFE was 72 per month - 42 individual and 30 organizational - in 2008-09.

DoFE settled 423 cases - 48.90 per cent of the registered cases - last year and arranged for Rs 154.25 million compensation to people cheated by individuals or outsourcing agencies. Though DoFE wants to settle more cases it could not do so due to insufficient proof provided by complainants, said DoFE director Uma Shankar Joshi. “We cannot do anything if we don’t get proof,” he said.

“We are concered over fraud in the foreign employment process but we alone cannot do much,” said Joshi. He urged people to be conscious while dealing with foreign employment agencies. “Ask for payment receipts, take home a copy of the labour contract with you and always deal in the office,” he suggested.

In individual fraud, DoFE managed to settle 312 cases and refunded Rs 127.58 million to the victims whereas 100 cases were solved tthrough negotiations. The department has filed 94 cases with compensation claim of Rs 120.18 million in 2008-09. Fraud in foreign employment process is gradually turning from organizational crime to individual-based. “We are watching the trend and working to minimize the damage,” Joshi said.


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The organisational sector has not become responsible yet. DoFE has registered 359 cases of fraud by outsourcing agencies with compensation claim of Rs 173.25 million. Of the 359 cases, the department has managed to solve 111 cases with compensation equivalent to Rs 26.76 million last year.

DoFE and Foreign Employment Promotion Board (FEPB) are working together to stop unethical and unlawful practices by outsourcing agencies. Both sections have urged the people to help in this. “Without the people’s help we cannot do much,” said Joshi. This year, the budget has also targeted to reduce fraud in foreign employment by improving state mechanisms. “Fraudulent activities related to foreign employment will be strictly controlled in collaboration with the private sector,” the budget has promised.

Facts and figures

Fraud in 2008-09 Individual Organisational Cases registered 506 (Rs 351.91m) 359(Rs 173.25m) Cases solved 312 (Rs 127.58m) 111 (Rs 26.67m) Cases in court 94 (Rs 120.18m) not applicable Case withdraw 100 (Rs 103.42m) not applicable Source: Department of Foreign Employment, 2008-09


Probe smells rat in petro-refinery

KATHMANDU, July 23: In a startling revelation, it emerges that Koshi Petrochemicals,which made a ´back-door entry´ into the state-controlled petroleum trade and claimed to be producing diesel by processing crude oil, never imported any crude oil.

Instead, the company has been distilling light furnace oil - a finished product imported from UAE - for producing diesel, kerosene and mineral turpentine oil (MTO) - something that directly violates regulations governing the sector.

Still worse, officials and experts concerned raise serious questions over the licensing. "How did the company get a license to import crude and market diesel, kerosene and MTO when the government has not yet open up petroleum imports and products like diesel and kerosene are state-controlled?" asked Amrit Nakarmi, an oil expert.

Koshi Petrochemicals, based in Hattimuda -9, Morang, had received a license from the Department of Industry (DoI) on May 20, 2009 to produce diesel, kerosene and MTO by importing crude. It started selling diesel to industries from the very next day, May 21.


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Madhav Koirala, the company´s chief executive officer, told myrepublica.com on May 24 that it produced the fuel out of crude it imported from a Gulf country, but refused to name the supplier.

His statement was met with immediate criticism and disbelief. Petroleum dealers in the region even demanded an investigation into the matter, following which the Ministry of Commerce and Supplies instituted a probe. And members of the probe team said their investigation exposed deeper anomalies in the industry than they had expected. Fishy "Our initial impression was the industry seemed in quite a hurry to get started," a member of the probe told myrepublica.com.

But interestingly, the company, seemingly so eager to get to work, never actually imported crude, according to customs records. In fact, it did not even import furnace oil, its raw material, after getting the license. "Rather, it is sourcing the raw material from Azad Chemicals, a company belonging to Fujima Organization in Biratnagar," said the source.

While use of light furnace oil as a raw material is unauthorized, the uglier part is that probe team members said they sensed the whole intention was fishy because "furnace oil (being a finished product itself) does not give a commercially viable yield."

"And if the promoters -- who are experienced hands in the field -- still went ahead with the unviable project, it raises a host of other unanswered questions," said the source.

These conclusions of the probe ring a warning bell because the country´s petroleum sector, even while a state monopoly, is infamous for anomalies such as fuel adulteration and quantity theft. The government has not yet put in place an effective authority to check these.

Moreover, the company has not yet gotten its product tested and certified by the Department of Standards and Metrology (DoSM), whereas its license stipulates that it do so prior to starting sales.

The probe also found that the company was producing un-dyed kerosene as well but said it has not sold the product so far. "It may be telling the truth. But this calls for serious monitoring because un-dyed kerosene is best for adulteration," said the official.

Source: www.myrepublica.com

Policy Corruption!


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The government started a debate on deregulation of the petroleum sector, market operation norms, formation of an independent Petroleum Authority to oversee the sector and benchmarks for pricing and quality, but no substantial headway has been made.

Petroleum Deregulation Act that the government tabled in parliament about three years ago has been gathering dust even as the government´s policy and program announced a few weeks ago stresses the need for the deregulation.

"So, the decision to license Koshi Petrochemicals simply smells rat," said Nakarmi, the oil expert.

DoI officials refute corruption charges. "The company brought a formal letter from the Department of Commerce stating that ćrude import´ was not in the negative list of tradable items. It also has a no-objection letter from Nepal Oil Corporation (NOC)," said a DoI official requesting anonymity.

Nakarmi, however, ridiculed DoI´s refutation. "Import of finished products is also not in the negative list. Does that mean such products are open for import? And how can a no-objection letter from NOC open up the sector? It is a policy issue and needs a decision by the cabinet and parliament," he said.

Experts like Nakarmi and officials are unanimous that the sector must be deregulated, but caution that this must be done in a proper way.

Source ; My Republica

Veg, fruit prices skyrocket

KATHMANDU, July 23: The prices of vegetables and fruits have skyrocketed due to the short supply of fresh vegetables in market. In a month´s period, prices of some vegetable and fruit items have almost doubled.

According to Binaya Shrestha, planning officer at Kalimati Fruits and Vegetables Market Development Board (KFVMDB), average daily supply of vegetables, fruits, fish and spices combined have dwindled down to around 320 tons. In normal seasons, the supply stands at around 600 to 650 tons a day.

“This is a lean season for vegetable production,” Shrestha said, adding, “Supply of vegetables has also been affected, as most of the farmers are engaged in paddy plantation.

Retail prices of big and small tomatoes have gone up to Rs 50 and Rs 55 per kg respectively from Rs 40 and Rs 35 per kg a month earlier. Red potatoes and white potatoes have also become dearer by Rs 6 and Rs 4 per kg respectively from Rs 30 and Rs 26 a month earlier.


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According to a KFVMDB report, the prices of onion and cabbage have also soared to Rs 28 per kg and Rs 55 per kg respectively from Rs 25 per kg and Rs 40. The prices of carrot and cauliflower (local) have almost doubled to Rs 75 per kg and Rs 58 per kg respectively from Rs 40 and Rs 30 over the period.

Geeta Prasad Acharya, a vegetable wholesaler in Kalimati market, said most of the vegetable farms had stopped supplying vegetables due to low productivity, thanks to long spell of drought. “The supply of vegetables from Tarai has sharply declined and districts surrounding the Kathmandu valley are also supplying the vegetables in lower quantity these days,” said Acharya.

He said potatoes and tomatoes were being supplied from Dhading, Kavre and Makawanpur districts. Only bitter gourds and lady-fingers are coming from Tarai districts, he added.

Price hike is not only limited to vegetables. Popular fruits are also getting dearer these days. The price of apple has almost doubled to Rs 260 per kg from Rs 145 about a month ago. The prices of mango and cucumber have also increased to Rs 95 per kg from Rs 60 per kg.


MARKET:

NEPSE down 1.05pt

The Nepal Stock Exchange (NEPSE) went down Tuesday by 1.05 points. The sensitive index also fell by 0.24 point.

The development bank sector, the only one among the sub-indices to post an increase gained 0.21 point. The hydropower sector dipped on Tuesday as well by 20.01 points followed by the finance sector which dropped 3.69 points and the banking sector which lost 0.35 point.

The share market witnessed a total turnover of Rs. 87.432 million with 136,522 shares.

Among the 20 commercial banks on NEPSE, Everest Bank posted the biggest growth with its stock rising by 25 points.

Similarly, among the 12 development banks , Annapurna Bikas Bank witnessed the highest increase of 25 points.

Likewise, Kaski Finance Company was the highest gainer among finance companies.

The top gainer on NEPSE was Annapurna Bikas Bank with a 5.64 percent rise.


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Similarly, the top loser on Tuesday was Chilime Hydro Power Company which fell by 4.88 percent.

Nepal Bangladesh Bank topped the chart in terms of turnover with Rs. 18.180 million.


Govt scrambles to achieve revenue target of Rs 176b

The government has prepared an action plan to achieve its massive revenue collection target of Rs. 176.5 billion for the current fiscal year.

The strategy includes broadening the tax net and strengthening the capacity of government agencies responsible for revenue collection, said Krishna Hari Baskota, acting revenue secretary of the Finance Ministry.

This year's projected revenue collection is 25 percent higher than last year's target of Rs. 141.72 billion. Baskota said that the ministry had already communicated to the concerned departments under it about the new strategy.

He added that the excise duty on beer would be computed by a machine installed at the brewery instead of the existing method of determining the tax on the basis of stickers stuck to the bottles.

Baskota said that the ministry had directed the Inland Revenue Department to implement the value added tax in a more effective way.

The ministry has also instructed it to bring more professionals under the income tax net as most of them are yet to come under it, he added. The concerned agencies have been told to use stickers with or without glue as per the situation to increase the amount of excise duty collected, he said.

The ministry has also directed the Revenue Investigation Department to mobilise flying squads more effectively.

The government expects to raise a significant amount of revenue by replacing the number plates of motor vehicles with machine readable number plates.

The Department of Transportation said that it would introduce the new number plates from the current fiscal year.

Revenue exceeds target

KATHMANDU: The government surpassed its revenue collection target in the last fiscal year by Rs. 1.24 billion. Revenue amounted to Rs. 142.96 billion compared to its target of Rs. 141.72 billion, said Krishna Hari Baskota, acting revenue secretary of


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the Finance Ministry. It represents a growth of 32.8 percent against the target of 31.7 percent.


Outbound migrant workers dip 13pc

By ramesh shrestha

The number of Nepali migrant workers leaving for labour destinations around the world decreased by 12.80 percent during the last fiscal year due to the worldwide recession. This is the first time departures have fallen in the country's history of foreign employment by double digit, according to officials.

A total of 217,164 individuals left the country for foreign employment during the fiscal year 2008/09, whereas departures numbered 249,051 in 2007/08.

Foreign employment agents said that the main reason behind the fall was the recession that limited employment opportunities in major destinations.

"Malaysia had suspended recruiting Nepali workers because of the economic downturn temporarily, and Israel is still not issuing work permits to Nepalis citing heavy fees and lack of skills," said Tilak Ranabhat, president of the Association of Nepal Foreign Employment Agencies.

He added that the limit set by the Korean government on hiring Nepali jobseekers under the Employment Permit System had also contributed to the decline.

"The outbound number would not have decreased if we had been able to seek new labour destinations considering the impact of the recession," said Ranabhat.

Bed Prakash Lekhak, director of the Department of Foreign Employment (DOFE), said that many manpower agencies had lost confidence in the requests for workers because of the recession.

"They are still afraid of sending workers and entertain only genuine demands," said Lekhak. According to the DOFE, 172,709 jobseekers had flown to 17 various countries through manpower agencies, among whom 169,644 were male and 3,065 female.

Similarly, 44,455 individuals secured jobs in 75 countries through their personal contacts. Of the total leaving for work on their own, 38,808 were male and 5,647 female. The DOFE allows Nepalis to work in 107 countries.

During the last fiscal year, Qatar absorbed 76,175 individuals against 85,442 in 2007/08. Malaysia, the major job market for Nepali migrant workers, took in only 35,070 compared to 50,554 in 2007/08.


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Similarly, the United Arab Emirate took in 31,688 individuals against 45,342 during 2007/08. However, Nepalis leaving for Saudi Arabia, a country less affected by the recession, increased to 48,749 from 42,394 previously.

The government is also considering sending blue collar workers to some developed countries.

"We have received requests for semi-skilled labourers for the service and construction sectors from Ukraine, Cyprus and Poland," said Lekhak.

Fiscal Year No. of Individuals Change in %

1998/99 27,796 258.88

1999/00 35,543 27.87

2000/01 55,025 54.81

2001/02 104,736 90.34

2002/03 105,043 0.29

2003/04 106,660 1.53

2004/05 139,718 30.99

2005/06 165,252 18.27

2006/07 204,533 23.77

2007/08 249,051 21.76

2008/09 217,164 12.80


GENERAL:

Police shoot dead rebel leader in central Nepal

Nepali police on Wednesday claimed that a military commander of Terai-based rebel group Terai Madhesh Rastra Mukti Sena (TMRMS) has been shot dead in police firing in Janakpur, some 120 km south of capital Kathmandu.

According to Nepali national news agency RSS, the armed man RamYadav, popularly called by the name Akash Tyagi, was killed when the militant group and police exchange fire at Bhrampura area, in southern plain of central Nepal where the police team had reached on patrol early in the morning.


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Police said Tyagi died in Bhrampura Chowk after police opened fire. Three other militants have escaped the scene following the incident.

Police recovered letter pads of the militant group, three sets of bombs and other explosives, two bullets, two mobile SIM-cards and a book from the deceased, the report said.

Weapons used by him, mobile phone, letter pads have proved that the deceased has been identified as Tyagi, police claimed. However, the death of Tyagi has not been officially confirmed yet.

Tyagi's outfit was involved in a few terrorist activities including firing bullets on Local Development Officer Krishna Chandra Mishra of Mahottari district, some 130 km south of Kathmandu and Gauri Shankar Sah, businessman of Janakpur. The outfit also claimed responsibility of bomb explosion at Land Revenue Office and Janakpur Railways in Dhanusha, according to local news website myrepublica.com.

Source: news.xinhuanet.com Date: July 22, 2009

3,000 chicks destroyed in west Nepal fearing bird flu

A team of Nepali police destroyed around 3,000 chicks smuggled into Nepal from India fearing bird flu (avian influenza), Nepali national news agency RSS reported on Wednesday.

A team of patrolling police seized the chicks from Everest FeedFactory in Kapilvastu district, some 200 km southwest of capital Kathmandu brought from Gorakhpur of India through secret routes and buried them.

"Acting on a tip-off of locals, we impounded the poultry and destroyed them," report quoted Pipara Chandra Gaire, chief at Armed Police Force in the district as saying.

The import of livestock products, including chickens and eggs, from India has been banned in Nepal following bird flu (avian influenza) outbreak in some Indian cities bordering to Nepal.

District-based poultry entrepreneurs say the quarantine check post has done nothing to control rising cases of poultry import from India, according to the report.

Within the past week alone, police had destroyed chickens imported from India in Bardiya and Banke districts, an indication that there has been no let-up in import of poultry products from India.

Despite several measures to discourage cross-country poultry trade, smugglers have been taking advantage of open border, and are engaged in importing poultry products from the neighboring country, said the report.


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Source: news.xinhuanet.com Date: July 22, 2009 Solar eclipse bodes ill for India, Nepal, China, says soothsayer

Kathmandu, July 22 (IANS) One of Nepal’s best-known astrologers, a globe-trotter who has attended astrological meets in Britain, Japan, France and Germany, warned that Wednesday’s solar eclipse would cause further unrest in India, Nepal and China. Bhoj Raj Upadhyay, who was asked to comment on the century’s longest solar eclipse by Nepal’s private television channels, predicted that in India, the eclipse would foment civil and financial crises as well as religious conflict.

“Sagittarius is India’s sign,” the astrologer said during a three-hour live television programme during the eclipse. During the eclipse, the sun is covered and the harmful influences that were warded off by it become stronger.

“They will increase the turmoil in India.”

As the eclipse travelled to China, where the ascendant sign was Pisces or the fish, Upadhyay said there would be greater accidents and financial crisis.

With Nepal — which falls under the Scorpio sign — being sandwiched between its two giant neighbours, the crises on both sides were bound to affect the nascent republic as well, the soothsayer said.

As if to give credence to his prophecy, trouble erupted in several districts in Nepal.

The Tamang community has called shutdowns in 10 districts where it has a sizeable population, demanding an autonomous state for themselves.

They clashed with police in Chitwan district in southern Nepal Wednesday as security forces sought to open the obstructed highway, leading to the arrest of 26 protesters.

Kathmandu valley headed for fresh woes with residents of a nearby landfill site, where the valley’s garbage is dumped, warning that they would not allow the disposal of garbage since the government had failed to implement welfare measures.

Source: www.thaindian.com

Drastic cut in public holidays recommended

KATHMANDU, July 22: The government is preparing to reduce the number of public holidays currently enjoyed by civil servants, as recommended by the Administration Restructuring Commission (ARC).

ARC´s recent report has suggested to the government to cut the number of annual public holidays from 41 days to seven days.


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The ARC report says that the recommendation was made as too many public holidays have a negative impact on the public.

Established by the then Maoist-led government under the chairmanship of the minister for general administration, ARC has said that the civil service would become effective and transparent if its recommendations are implemented.

ARC has asked the government to follow the English calendar and avoid the use of Bikram Sambat.

“We recommended a heavy cut in public holidays as there are a large number of unnecessary holidays.” said Acting Secretary Yub Raj Bhusal. “Nepal is first among South Asian countries in providing public holidays to civil servants.”

The ARC report will come into implementation once the cabinet endorses it. This is the first time that a commission set up by the government has recommended a massive cut in the number of public holidays. Neighboring India provides only seven public holidays to its government employees.

ARC has suggested public holidays only on New Year´s, Dashain, Deepawali, Buddha Purnima, Republic Day, Maha Nawami and Holi.

The commission has also advised the government to arrange 20 days of casual leave to its staff. “Employees can enjoy casual holidays according to their own needs, interests and culture”, the report said. ARC´s recommendation comes in the wake of the increasing trend of announcing new public holidays after the restoration of Loktantra in 2006.

ARC has also advised the government to scrap the present practice of six working days and recommended two holidays in a week. “Run government offices from Monday to Friday” the report said. It has also suggested increasing office hours from 9:30 a.m. to 5:30 p.m. The commission has advised providing a five-day leave for the wedding of a government employee´s son or daughter. “Provide an additional monthly allowance to staff getting married,” the report said.

Ban officers from trade unions

ARC has recommended that the government ban section officers from joining trade unions. “The government should strictly prohibit section officers from becoming members of trade unions” said the report, adding, “The government should amend the civil service act and implement our suggestions.” If the report is brought into implementation, some 74,00 section officers would be prevented from becoming union members.

• Cut holidays from 41 days to 7 days • Replace Bikram Sambat with English calendar • Provide one month salary allowance to employee on his/her wedding • Arrange two days leave a week


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• Ban section officers from joining unions

Source: www.myrepublica.com Date: 2009-07-22

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