Industrial Security Force
Delayed by Cost Controversy
Formation of the long awaited Industrial Security Force is going to be delayed further owing to refusal by the business community to bear its costs and lack of understanding about whom to give the responsibility of managing the Force.
Some years back when Maoists intensified activities against industrial establishments and industrialists, the Federation of Nepalese Chambers of Commerce and Industry had requested the government for formation of an Industrial Security Force. In response a study committee comprising representatives from Nepal Police, Armed Police and Home Ministry was formed. The study recommended that the industrialists also share the cost of maintaining such a special force. But the industrialist refused, arguing that apart from paying the taxes they could not bear any additional burden. The government also appeared reluctant to raise a new force. When criminals from across the border began attacking industrialists at places like Birganj and the illegal activities of YCL aggravated the situation, the industrialists had come to the conclusion that a special security force should be raised immediately even if that entailed sharing the cost by the industrialists. Consequently an FNCCI delegation met the prime minister offering to contribute to the cost. According to the sources at the Prime Minister’s official residence, the Prime Minister had assured them that the required force would be raised soon. According to Home Minister Sitaula the groundwork for the formation of the special force has already begun.
However, questions like whether to put it under the civil or armed police and whether it should be one part of the government or an independent force are still to be decided. Similarly, also being sorted out is the ratio at which the cost of the force is to be shared by the business community.
Excessive demand for BBA course
T U to Revise Affiliation Policy
Applications from colleges have been piling up with the Tribhuvan University for affiliation to conduct the Bachelor of Business Administration (BBA) course. Since the number of such colleges, both in the capital and outside, increased drastically, the T U stopped granting affiliation from last year. More applications have been received from across the country this year also.
Currently 19 colleges have been conducting this 4-year course. The final result of the students of the first batch has been very good. That may have prompted more colleges to apply for affiliation, feels Dr Pushkar Bajracharya, chairman of Business Administration Subject Committee of the T U.
“Therefore, the University is now revising the criteria making them stricter in terms of infrastructure and manpower required “, he said. “If the affiliation is granted generously for teaching a serious subject related to business, the quality may suffer and it may worsen the problem of educated unemployment,” he added.
Nepal Telecom to go Public within next Fiscal
After a long wait, the Privatisation Committee of the Ministry of Finance has decided the procedure to divest 15 percent of the government shares in Nepal Telecom by selling five percent to the employees of the company and 10 percent to the general people.
According to the decisions of the committee, employees in the payroll of the company on mid-April 2004 will be eligible to get the shares. Among those employed after that date, only those will be eligible who are still working with the company. The employees will get the shares at a discount of ten percent on the face value. The allocation of shares to the individual employee will be as per the criteria to be fixed by the company’s management. Shares so received will not be allowed to be sold for three years. After the completion of the three years, only 25 percent of the shares can be sold off. The remaining 75 percent can be sold off only after the retirement of the employee. However, the employees shares cannot be sold until the shares issued for the general people are not listed in the stock exchange.
Out of the ten percent shares to be sold to the general people, five percent will be sold in the first phase within the fiscal year 2007-08 through competitive bidding. The remaining five percent will be sold later in the same year on the basis of the experience of the first issue.
Mt Everest Brewery loses its Shares in Lumbini Bank
Banks have started forfeiting the shares that blacklisted borrowers own in the bank.
As the first instance of this step, Lumbini Bank Ltd. has forfeited 100,000 units of shares that Mt. Everest Brewery (P) Ltd. was holding in the bank as one of the promoter shareholders. According to bank sources, these shares will be sold off by an open bidding process. Nepal Merchant Bank and Finance Company Ltd. is appointed the issue manager for this purpose.
The Nepal Rastra Bank has already granted permission for such sales, say the source. According to them, buyers of these shares will remain promoter shareholders of the bank.
Cosmic & Nepal Air to Take off Again
Thanks to the technical clearance given by International Civil Aviation Organization (ICAO) for Fokker aircraft for two more years, Cosmic Air is preparing to resume operating international flights with its two Fokker aircraft which have remained grounded for the last eight months.
The company has already filed application with the Civil Aviation Authority Nepal for flight schedule. Though the Authority has not provided the schedule, Cosmic Airline’s chairman Capt. R P Pradhan says the flights to Delhi, Varanasi and Dhaka will resume within the next two months. In the domestic sectors, the airline is planning to service only Pokhara and Biratnagar from Kathmandu.
After obtaining ICAO’s clearance, Cosmic has begun the repair and maintenance on the two aircraft.
Until mid-October last year, Cosmic had been operating international and domestic flights with four Fokker craft by offering budget fares. The flights had to be phased out because of technical and financial crises. Two of the craft were taken back by the French company which had provided the craft on lease.
Cosmic was unable both to pay its huge bank debt and pending bills for the fuel. Nepal Rastra Bank has categorised Cosmic Air along with its sister concerns AVCO International, Mystique Himalayan and SOI as very risky accounts for loan recovery.
Meanwhile, Air Nepal that had been operating only international flights and suspended them after a few months of operation, is again poised to resume its services with new Japanese investment and management. Air Nepal used to fly on the Bangkok and Kuala Lumpur sectors.
NRB Governor, Official Facing Corruption Charges
A corruption case has been filed with the Special Court against Nepal Rastra Bank (NRB) Governor Bijaya Nath Bhattarai and Director of NRB’s Banks and Financial Institutions Regulation Department Surendra Man Pradhan by the anti-graft watchdog Commission for Investigation against Abuse of Authority (CIAA) sending the observers guessing on the future of the financial sector reforms initiatives.
According to reports, the case is filed after the Commission investigated a payment by the NRB to the consultants hired for a special study. While the commission has claimed that the NRB records show a payment made to the Sri Lankan subsidiary of international accounting firm KPMG and the firm has not received any such payment, sources at NRB say this claim is baseless. “No such payment is made to KPMG. The contract for the study was made with a US firm IEF Inc. and the payment is made to IEF, which is perfectly according to the contract as well as the rules,” said a high level source at NRB.
NRB source’s claim is substantiated by a statement issued by the Nepal Country Office of the World Bank which provided assistance to finance the study. In the statement, World Bank has hoped for speedy conclusion of the case as it is already in the court.
Bankers and government officials contacted to comment on the case suspect the commission’s step to be politically motivated. Requesting anonymity as the case is now sub judice, they said it may be a strategy to remove Bhattarai who is accused of being loyal to the king. Bhattarai is reported to have refused to comply with Finance Minister Dr. Bhattarai’s request to resign from the governor’s post. The government did not dare sack him as one former Governor removed in that manner was reinstated after some months by the Supreme Court.
Some bankers fear that this step of the commission is likely to benefit the big defaulters on the bank loans against whom the NRB was getting tougher in the recent months.
