Investment Info @ Infrastructure
Nepal has made good progress in recent years in the development and improvement of basic infrastructure facilities required for an acceleration programme of economic and social development. Efforts are continuing to further improve various facilities required for the development of trade, industry and commerce to bring them in line with modern international standards. The urban centers of kathmandu valley (Kathmandu, patan, Bhaktapur) and pokhara and the industrial towns in the Terai region, Biratnagar, janakpur, Birgunj, butwal, nepalgunj and hetauda offer good facilities for the establishment of medium and large scale industries.
ZONNING OF IONDUSTRIAL LOCATION
His majesty’s Government has specified four zones for the purpose of granting permission of registration of new industries in and out of the municipalities including Kathmandu valley. It is hoped that this zoning of industrial location will facilitate planned, systematic and healthy industrial development by reducing industrial pollution, and over utilization of infrastructure facilities. Likewise, this zoning will also facilitate the balanced economic development of the country through diversification of investment flows in the underdeveloped and less developed areas of the kingdom. These four Zone of industrial location are as follows:
Zone 1 Municipal areas of kathmandu valley.
Zone 2 Outside the municipal area of kathmandu valley.
Zone 3municipal areas of biratnage, Dharan, pokhara, birgunj, Janalepur, Siddarthanagar, Butwal and nepalgunj.
Zone 4 municipal areas other than those mentioned in zone 3.
Industrial development is also being achieved through the development of industrial districts where essential infra-structure facilities including buildings are provided. Eleven industrial districts scattered throughout the country provide satisfactory sites for industrial development. These are in balaju, patan, Bhaktpur, hetauda, pokhara, Dharan, butwal, nepalgunj, Birendranager, Rajbiraj, and Dhakuta.
Technology Park Project has been established under the Ministry of industry for the development and promotion of information technology and services. The proposed park is going go be built in Banepa, 27 Km cast form the capital city of Kathmandu. Currently, the land use planning of the park is underway. The national policy on information technology including cyber laws and related exam policy will be shortly released. The government has recently opened up VSAT, Internet, Pager, Video conferencing and several other related services for private or any other enterprise to facilitate the development of information technology. The purpose of the TP in Nepal is to set up the computer and related high-tech industries which would go a long way in utilizing the educated unemployed manpower existing in the country and enter into a new era of technological enhancement. The TP scheme is a 100% export oriented scheme for the development and export of compute software using data communication links in the formal physical media including the export of professional service.
TRANSPORTATION : (A) AIR TRANSPORTATION
Nepal being landlocked, considerable attention is paid to the development of air transportation to support the growth of trade and the fast expanding tourist industry. Nepal is served by one international airport in Kathmandu and 42 domestic airports some of which are all fair-weather and some fairwater. Kathmandu, the capital is connected by regular air services to London, Frankfurt, Moscow, Dubai, Karachi, new Delhi, Calcutta,, Bombay, Varanasi, Dhaka, Bangkok, Singapore, Lhasa, Thimpu and HonKong. The Royal Nepal Airline-RNAC, operates international flights using Boeing 757 and 727 aircrafts. Other airlines operating through Kathmandu are Indian Arilines, biman Bangladesh Airlines, Thai Airways Intentional Pakistan international; Airways, Singapore Airlines, Druk Air, Dragonair, China South West Airlines Austrian Airlines, Saudi Arabian Airlines etc. Due to the landlocked nature cargo services are operated by some airlines to meet the growing demand for airfreight. The hilly and inaccessible areas and the Terai region are linked by domestic air services operated by RNAC through the 42 domestic airports Emphasis is given to strengthen these service to promote balanced development in trade, commerce and tourism.
(B) ROAD TRANSPORT
Development and expansion of transport facility is the most important prerequisite for the development of a remote and village dominated county like Nepal. The country is linked north Sout and East-West by a system of roads whose total length exceeds 132223 kilometers. Of this length of roads 4073 kilometers are black topped while 3476 kilometers are graveled and 4740 kilometers are fair weather roads. The major highways are the mahendra Rajmarg (East-West highway), the Tribhuvan Rajmarg (Kathmandu-Birjung), the prithivi Rajmarg (Kathmandu-Pokhara), the Siddhartah Rajmarg ( Sunauli-Pokhara) and the arniko highway 9kathmandu-Kodari), other roads such as Banepa-Sindhuli-Bardibas, Mahakali highway, basantapur-Terathum, Katari-okhaldhunga, Gaighat-Diktel, Salyan-musikot, Surket-jumla roads are under construction.
(C) SEA TRANSPORT
although landlocked, Nepal has access to the sea through the port of Calcutta, in India. The port of Calcutta is about 1150 kilometers from the Nepalese border close to Biratnagar. The average transit time through India could be 3 to 8 days. Transfer of fright by containers from Calcutta is becoming increasingly important. This tends to reduce the transit time. Registered clearing agents with good reputation could assist in the smooth and speedy clearance of goods through the port of Calcutta.
TRANSIT FORMALITIES (VIA CALCUTTA)
Nepal bound sea cargo comes through Calcutta, the only sea-port the Government of India has permitted for transit facility to Nepal. After clearance by Indian port and custom authorities in Calcutta, cargo is forwarded by rail/road to the land custom post of the indo-Nepal border. The procedure for clearing and forwarding on Nepal cargo in Calcutta port is explained hereunder: A) Appointment of Clearing Agent: This importer has to appoint and authorizes a clearing agent in Calcutta who should be duly registered with the Indian port and custom authorities. The responsibility of the clearing agent is to clear the cargo from the shipping line, Indian port and custom authorities and to forward is to the relevant land custom post of the Indo-Nepal border. b) Documents for Clearing: The following documents are required for clearing and forwarding the cargo in Calcutta port: i. Invoice of lading ii. Bill of goods iii. Packing and weight list iv. Insurance policy v. Certificate of origin vi. Import license issued by HMG, Nepal, if applicable. vii. Importer’s counter guarantee for clearing agent’s letter of undertaking and in case of government cargo importer’s counter guarantee letter addressed to Nepal transit and Warehousing Co. Ltd. (NTWCL) for issuing undertaking to Calcutta customs. viii. Certified copy of L.C. © procedure for Clearing at port: i. All the documents for clearing should be filed with shipping line, port and custom authorities for clearing and possession of cargo. ii. Cargo is unloaded from ship by the port authorities. If the cargo is in containers and these are not to be forwarded to Indo-Nepal border, then destuffing is done at the cost of the importer. iii. Shipping line give possession of cargo t the importer’s clearing agent after examining all the documents and the original Bill of Lading. iv. The importer’s clearing agent gets the cargo appraised y Indian custom authorities, who open cases and make inspection in accordance with invoice, packing list etc. After satisfactory inspection, custom authorities make endorsement on import license and other papers and do the stripping and sealing of the cases. v. Importer’s clearing agent should obtain transit insurance policy for Indian import duty leviable in favor of Collector of Customs. vi. After completion of these formalities the Custom authorities make Custom Transit Declaration From “CTD which allows movement of Nepal cargo from Calcutta port of the land custom post at Indo-Nepal border. vii. The cargo is loaded to trucks, containers, rail and forwarded to relevant land custom post at indo-Nepal border. viii. Any shortage, damage, pilferage at Calcutta docks and shot delivery by shipping line has to be surveyed by insurance surveyor at Calcutta docks for lodging claims with insurance company. ix. When the consignment reaches Indo-Nepal border the Indian custom pot endorses the CTD form certifying that the cargo has entered Nepal territory. The endorsed CTD form should be returned to Calcutta custom within 30 days. x. The consignment reaches the Nepal customs office at border and the necessary clearance is done by importers or authorized representatives. Warehousing facility: In case of discrepancies in the documents or late documents or by any other reasons pending clearance to avoid high port rent importers/exporter/clearing agents could store their cargoes at NTWCL Warehouse within the Calcutta port premises and Birgunj, Biratnagar Customs area at most economical rate.
Nepal is well endowed with enormous hydro-power resources. This comparatively cheap source of power provides a distinct advantage for Nepal t embark on a programme of rapid industrialization. The present power generating capacity is 288 MW of which 88 percent is accounted for by hydro-power. Plans are underway to implement a major hydro-electric project-Arun III with a total capacity of 402 MW. This will be implemented in 2 stages with the first stage 268 mW project expected to be commissioned in year 2000. In order to meet increasing demand for power in the interim period, steps will be taken to consolidate and strengthen existing generating facilities with a view to increase efficiency in production and distribution of energy. It is also possible that a medium size hydro-electric her major projects on which preliminary studies have been undertaken include the upper Arun hydroelectric project (335 MW) and the west Seti hydro-electric project 9360MW)
The financial system in Nepal consists of the Nepal Rastra Bank (the Central Bank of Nepal), thirteen commercial banks, and two development finance institutions. The Nepal Rastra bank’s main function is to regulate and supervise the banking institutions in Nepal. It issues currency, determines th daily buying and selling rates of foreign currencies and implements monetary policy to secure financial stability and growth in the economy. Industrial, agricultural and commercial credit is provided by five commercial banks operating through braches spread throughout the country and two development finance institutions. Besides providing banking services, commercial banks provide industrial term loans and short term working capital loans to business and industrial enterprises. Nepal bank Ltd. And Rastriya Banijaya Bank are domestic commercial banks with a wide network of branches in the country. There foreign joint venture banks, Nepal Arab Bank, Nepal Indo-Suez Bank and Nepal Grindlays Bank also provide full fledged banking services. The standard Chartered Bank, Citi bank American Express bank and union European de CIC run representative office in Kathmandu. The Nepal industrial Development Corporation and the Agricultural Development Bank extend assistance to investors in industrial and agricultural projects, respectively. Besides rural development banks have also been constituted to provided loans to the project designed to uplift the income generation of rural population. Insurance coverage on business and commerce could be obtained through the Rastriya bema Sansthan or other insurance agencies which operate in Kathmandu.
The Nepalese Telecommunication network is fully digitalized Nepal Telecommunication Corporation (NTC) is, so far, the only service provider in the country. Nepal Telecommunication Corporation has optical fiber link to India and satellite link to other countries of the world. The telecommunication sector has been liberalized and private sector participation in the development and operation of telecommunication sector is opened. The government has established Nepal Telecommunications Authority, an independent regulatory body, to facilitate private sector participation as well as fair competition in this sector. The government further intends to develop this sector to cater for the demand of the Trade, industry, Commerce and Tourism sector in the coming millennium.
The Land Reform Act of 1964 introduced land ceilings of 16.4 hectares in the Terai, 2.7 hectares in the kathmandu valley and 4.1 hectares in the hills others than in the Kathmandu valley. Land for industrial purpose could be purchased form private owners. Land price range from Rs. 500,000 to Rs. 1,000,000 and above per ropani (5476 sq.ft.) in Kathmandu to Rs 5,000 to Rs. 50,000 and above per ropani in the hilly regions. In the Terai price rang from Rs. 40,000 to Rs. 250,000 per ropani.
INDUSTRIAL SUPPORT SERVICES
The Economic services Centre-ESEC, provides a package of non-banking services and helps interested parties to invest in industrial ventures in the county. The center provides assistance in carrying out techno-economic feasibility studies; It also conducts management training programmes of interest to both the public and private sectors. The Nepal industrial Development Corporation-NIDC extends loan to industry guarantees loans raised by industrial enterprises through commercial banks and also participates as an equity investor in technically feasible and economically sound projects. The securities Exchange Centre-SEC, established under the Securities Exchange Act of 1984, promotes the economic welfare of the public through protection of the interests f investors and encourages wider participation of the public in the ownership of business enterprises. It provides and useful mechanism for the mobilization of domestic capital through the issue of shares in public companies and thereby creates opportunities for broad basing the ownership of companies. The Trade promotion Centre-TpC, act as a catalyst to crate, develop and promote the export of Nepalese products international markets. It offers a range of services to exporters including product studies and market surveys, develops systems which will facilitate smooth flow of goods and services and facilitates the participation of Nepalese businessmen in international Trade fairs to promote export development.
HOTELS, HOUSING, EDUCATION AND RECREATION
Kathmandu, the capital of Nepal, is well served with good hotels ranging from 5 star hotels to other categories of hotels, guest houses and motels. A number of restaurants offer a variety of international cuisine. Western style houses with modern conveniences are available in Kathmandu. International schools in Kathmandu provide facilities for the education of expatriate children. Recreational facilities for expatriate personnel are available through international clubs and through some of the five star hotels, Kathmandu also has two golf courses. For the more adventurous, Nepal offers many opportunities for trekking, mountaineering, river rafting and jungle safaris.