Tuesday, February 13, 2018

NAC lacks pilots to fly Chinese aircraft

Though Nepal Airlines Corporation (NAC) now has 4 Harbin Y 12-e aircraft in its fleet – after it received 2 aircraft today – the national flag carrier has only 3 pilots to command the aircraft.
The airlines need to have 8 pilots to fly according to the schedule, but with only 3 pilots at present, the aircraft seem to remain in the parking lot until the NAC recruits pilots to fly them. Under present circumstances, the new aircraft will remain grounded at the airport.
According to Civil Aviation Authority of Nepal (CAAN) rule, airline companies should have five pilots – 2 captain and 3 co-pilots or 3 captains and 2 co-pilots - per small aircraft.
Two new Chinese aircraft procured by NAC from China landed at the Tribhuvan International Airport (TIA) in Kathmandu today. According to NAC, 2 Harbin Y 12-e aircraft landed at the TIA today afternoon at the interval of half an hour.
The new aircraft will be coming via Dhaka, Bangladesh and will be flown by foreign pilots.
The NAC is looking for senior flying crews for the Y12e. It has also published an advertisement to hire foreign captains.
A team of NAC left for China to take delivery of the 2 remaining Chinese-made Y-12e planes on January 30. CAAN has given the new aircraft 9N-AKU and 9N-AKV call signs, according to the NAC.
The two 17-seater aircraft are a part of grant and loan agreement that Nepal had signed with China's AVIC International Aero-Development to procure 6 aircraft, 2 MA 60s and 4 Harbin Y 12-e aircraft in November 2012. Of them, one MA 60 and one Harbin Y 12-e were grant – by February last year and are conducting domestic flights – while China has arranged concessional loan to purchase on MA 60 and three Harbin Y 12-e aircraft.
The first batch of two Y12e arrived in Kathmandu in 2014, and were intended to serve remote mountain airfields like Lukla, Jomsom, Manang, Simikot, Rara, Jumla and Dolpa. But the aircraft faced regulatory limits, which meant they could only fly to airports with a maximum grade of up to 2 per cent or about 1.2 degrees of slope.
As a result, the Y12e have been only operating on the Pokhara and Simara sectors, pending the issuance of a certificate by the manufacturer clearing them to serve airports with a slope of more than 2 degrees.
The cost of 4 aircraft is $ 35 million, said the NAC that has repaid most of the loans and only around $3.5 million is remaining.
NAC will now have a total of 8 aircraft for domestic destinations, though it lacks enough pilots to fly them. With the new planes, the NAC has planned to fly them to some faraway cities, including Dang in the mid-western region and Janakpur in eastern region and some remote airports.
The national flag carrier plans to increase its share in the domestic sky with new aircraft. The stakeholders, however, fear that the aircraft might turn white elephants due to its high maintenance cost and low productivity.

Wednesday, January 31, 2018

JICA hands over mediation centres for District Courts

Chief Representative of JICA Nepal Office Jun Sakuma and Registrar at Supreme Court Mahanedra Nath Updhayay today signed the minutes of understanding on handing over of buildings of newly constructed Mediation Centres and renovated facilities amidst a function in the Supreme Court.
According to a press note from the JICA, it is providing the technical cooperation project for strengthening the capacity of Court for expeditious and reliable dispute settlement to the Supreme Court of Nepal since September 2013 until March 2018.
JICA took the objective of improving the court’s functions for promoting expeditious and reliable dispute settlement, it reads, adding that one of the outputs of the project is to promote court-related mediation.
The buildings and facilities were constructed under the project and the locations were selected in the model district courts of the project in Kavre, Dang and Dhanusha to accomplish the objectives.
The Mediation Centres were built with prefab structure and is expected to support each District Court to expedite the use of court related mediation and increase the settlement of cases. In Kavre District Court, one meeting hall and three court rooms were also renovated. The total project cost is Rs 22.21 million.

Tuesday, January 30, 2018

Nepal improves budget transparency; still more room for improvement

Nepal has increased its score in Open Budget Index (OBI) and topped the rank in the South Asian region.
According to the Open Budget Survey (OBS) global report launched today, Nepal increased its budget openness score to 52 from 24 in 2015. Freedom Forum – a Civil Society Organisation working in the area of public financial management – conducted the OBS for Nepal as a representative of the International Budget Partnership (IBP).
Nepal's 2017 OBS country summary report stated that Nepal’s score of 52 out of 100 is moderately higher than the global average score of 42. With this Nepal has become the South Asian leader in regard to budget openness score followed by Afghanistan (49), India (48), Pakistan (44), Sri Lanka (44) and Bangladesh (41). The OBS was held in a total of 115 countries around the globe.
"Open budget score for Nepal has changed over the time with 24 in 2015, 44 in 2012, 45 in 2010, 43 in 2008 and 36 in 2006", shared the report. Nepal’s score on the Open Budget Index in 2015 declined sharply to 24 due to the late publication of the Executive’s Budget Proposal, in OBS 2017 the country’s score rose substantially to 52, said Forum's Chief Taranath Dahal, who was involved in the survey.
However, the report reveals that Nepal still provides the public with limited budget information; offers few opportunities for the public to engage in the budget process and the legislature and supreme audit institution in Nepal provide limit oversight of the budget.
Since 2015, Nepal has increased the availability of budget information by publishing the Executive Budget Proposal in a timely manner. However, as in other rounds of budget survey, Nepal has failed to make progress in producing a Pre-Budget Statement and a Citizens Budget.
Each country receives a composite score – out of 100 – that determines its ranking on the Open Budget Index, the world’s only independent and comparative measure of budget transparency. The biennial OBS assesses the country's budget transparency, people's participation in budget process and strengths of budget oversight agencies – the Supreme Audit Institution and Legislature.
Drawing on internationally accepted criteria developed by multilateral organisations, the Open Budget Survey uses 109 equally weighted indicators to measure budget transparency.
These indicators assess whether the central government makes eight key budget documents available to the public online in a timely manner and whether these documents present budget information in a comprehensive and useful way.
According to the report, the Executive’s Budget Proposal was not provided to legislators at least two months before the start of the budget year; legislative committees did not examine and publish reports on their analyses of the Executive’s Budget Proposal online.
To measure public participation, the Open Budget Survey assesses the degree to which the government provides opportunities for the public to engage in budget processes. Such opportunities should be provided throughout the budget cycle by the executive, the legislature, and the supreme audit institution.
The Open Budget Survey also examines the role that legislatures, supreme audit institutions, and independent fiscal institutions play in the budget process and the extent to which they are able to provide effective oversight of the budget. These institutions play a critical role — often enshrined in national constitutions or laws — in planning budgets and overseeing their implementation.
These indicators were revised to better assess the role of formal oversight institutions in ensuring the integrity and accountability in the use of public resources. Therefore, data on the role and effectiveness of oversight institutions in the Open Budget Survey 2017 should not be compared directly to data from earlier editions.
The Open Budget Survey uses internationally accepted criteria developed by multilateral organisations from sources such as the International Monetary Fund (IMF), the Organisation for Economic Co-operation and Development (OECD), the International Organisation of Supreme Audit Institutions (INTOSAI) and the Global Initiative for Fiscal Transparency (GIFT).
Nepal's Legislature-Parliament provided limited oversight during the budget cycle. This score reflects that the legislature provided weak oversight during the planning stage and implementation stage of the budget cycle.
The supreme audit institution provided adequate budget oversight. Under the law, it has full secretion to undertake audits as it sees fit. Moreover, the head of the institution is appointed by the legislature or judiciary and cannot be removed without legislative or judicial approval, which bolsters its independence.
Finally, the supreme audit institution is provided with sufficient resources to fulfill its mandate and its audit processes are reviewed by an independent agency.
Nepal does not have an Independent Fiscal Institution. While IFIs are not yet widespread globally, they are increasingly recognised as an important source of independent, nonpartisan information.
Nepal should prioritise the actions to improve budget transparency that include producing and publishing a Pre-Budget Statement and a Citizens Budget, providing detailed data on macroeconomic forecast as well as data on the financial position of the government in their Executive’s Budget Proposal, increasing the information provided in the In-Year Reports and the Enacted Budget.
To improve public participation in its budget process, Nepal should prioritise actively engaging with individuals or civil society organisations representing vulnerable and underrepresented communities during the formulation and monitoring of the implementation of the national budget, hold legislative hearings on the formulation of the annual budget, during which members of the public or civil society organisations can testify, establish formal mechanisms for the public to participate in relevant audit investigations.
To make budget oversight more effective Nepal should ensure that the Executive’s Budget Proposal is approved by legislators before the start of the budget year, ensure the legislature is consulted prior to shifting funds between administrative units away from what is specified in the Enacted Budget during the budget year and the spending of any unanticipated revenue, consider setting up an Independent Fiscal Institution to further strengthen budget oversight.
With the adoption of a federal governance, a significant share of the budget is now going to the local level government. And hence, adopting budget transparency and people's participation in the budget process and strengthening oversight agencies would promote wise spending of the public money and its subsequent outcomes to transform the people lives.

Monday, January 29, 2018

NRNA to form Special Purpose Vehicle to operate Rs 10 billion Investment Fund

The Non-Resident Nepali Association (NRNA) is planning to form a Special Purpose Vehicle to operate Rs 10 billion Infrastructure Fund.
"We have sought approval from the Securities Board of Nepal (Sebon) to operate NRN Infrastructure Fund of Rs 10 billion," said NRNA President Bhaban Bhatta. "The Fund will have investment from all including government, government entity, private sector, diaspora community and local, though the diaspora community will be given privilege to invest," he added.
Nepali diaspora community has announced to set up an Infrastructure Fund worth Rs 10 billion to finance the infrastructure needs of the country in London last week in the presence of Nepal Rastra Bank (NRB) Governor Dr Chiranjibi Nepal.
"The promoters of the fund will inject the capital to set up the fund," Bhatta said, adding that they are willing to make huge investment in infrastructure sector. "Thus, if Sebon approves us to issue bonds, NRNA will sell it among diaspora community to collect the funds."
On the occasion, portfolio adviser of the NRN Infrastructure Fund Anal Raj Bhattarai said that the Fund is willing to diversify its investment to ensure the regular fixed return for the investors. "The Fund will have investment from government, government entities like Hydroelectric Investment and Development Company and the diaspora community," he said, adding that the Fund also wants to make consortium financing under the leadership of various commercial banks in hydropower projects. "We can bring in billions of rupees from the diaspora community by selling bonds.
He also said that the NRNA office bearers' have asked capital market regulator for its approval to bring in investment. 
Sebon has been drafting the Alternative Investment Regulation Funds Regulations to regulate such funds, equity investment and venture capital
Discussing with the Society of Economic Journalists of Nepal (Sejon) here on Tuesday, he informed that discussions were underway with the government bodies for setting up the fund.
On the occasion, NRNA President Bhatta also listed the newly elected committee's work in the last almost 100 days. The newly elected NRNA committee – in the last three months – has expedited construction of the Laprak Model Settlement in Laprak of Gorkha. The settlement was destroyed by the Gorkha Earthquake of April 25, 2015. A total of 327 houses are being reconstructed in Laprak.
According to him the NRNA is also constructing a park on 32 ropanis land on the bank of the Bagmati river at Shankhamul at an estimated cost of Rs 22.5 million, apart from completing the NRNA headquarters in Baluwater.

Monday, January 22, 2018

Government forms committee to rescue troubled cooperative

The Ministry of Cooperatives and Poverty Alleviation has formed a seven-member management committee – led by Gauri Bahadur Karki – to take over and manage the ‘troubled’ Oriental Cooperatives.
December 14 cabinet meeting had decided to form a committee.
Gauri Bahadur Karki led committee will have Kashi Nath Marasini, Gobinda Bahadur Malla, Dipak Prasad Poudel, Huma Kanta Panthi, Rewati Raman Pokharel and a representative recommended by the Federation of the National Cooperatives as members.
The committee – that has two-year tenure – will compensate the depositors, who lost their savings after the cooperatives went bankrupt around four years ago, said the ministry’s spokesperson Raghuram Bista.
The cooperatives went bankrupt after it disbursed haphazard loans and invested the deposits illegally in real-estate. The real-estate bubble bust sent the cooperatives into bankrupt.

Nepal Emerging Leaders programme 2018 starts

Kathmandu-based Leadership Academy and US-based Kroc School and Kroc Institute for Peace and Justice (IPJ), University of San Diego, have launched a year-long programme aimed at strengthening the leadership capacity of youth leaders from across the country.
Titled ‘Nepali Emerging Leaders Programme 2018, the project will groom some 28 young leaders – 14 men and 14 women – selected from the 14 zones of the country. The participants are aged between 25 and 40 and represent various political parties and organisations from the hills, mountains and the Terai region.
A team comprising seasoned politicians and experts in various sectors will train and mentor the ‘emerging leaders’ of the country for the next one year.
Speaking on the occasion – to launch the year-long programme today – inn Kathmandu, former Prime Minister and one of the mentors, Lokendra Bahadur Chand said that the programme that is aimed at enhancing the leadership capacity of the young emerging leaders from across the country is a good initiative. "There were no such programmes and organisations, when I began my political career," he said, adding that the young leaders who have been selected for the program areme lucky to get such an opportunity. "I hope they will be able to work for the country’s development more effectively after completing the course."
President of Leadership Academy Santosh Shah, on the occasion, expressed hope that the programme will be effective in strengthening the leadership capacity of the youth leaders selected for the programme. "The first phase of training has already been organised and now the second phase of three sessions – one each in the hills, mountains and the plains – will be organised,” Shah added.
Nepali Congress leader and former deputy speaker Chitralekha Yadav, CPN (Maoist Center) lawmaker and former sports minister Kamala Rokka, CPN-UML leader and former lawmaker Ratna Gurung, UN Women Nepal chief Wenny Kusuma, programme officer of IPJ Daniel Orth also addressed the function.

Global FDI slips last year

Global flows of foreign direct investment (FDI) fell by 16 per cent in 2017 to an estimated $1.52 trillion, from a revised $1.81 trillion in 2016, according to the latest UNCTAD Global Investment Trends Monitor.
“FDI recovery continues to be on a bumpy road," said UNCTAD secretary-general Mukhisa Kituyi. “While FDI in developing countries remained at a level similar to the previous year, more investment in sectors that can contribute to the Sustainable Development Goals is still badly needed," he said, adding that promoting FDI for sustainable development remains a challenge.
A slump in FDI flows to developed countries (-27 per cent) was the principal factor behind the global decline. A strong decrease in flows was reported in Europe (-27 per cent ) as well as in North America (-33 per cent ), mainly due to a return to prior levels of inflows in the United Kingdom (UK) and the United States (US) after spikes in 2016. This decline was tempered by an 11 per cent growth in flows to other developed economies, principally Australia.
FDI to developing economies remained stable, at an estimated $653 billion, 2 per cent more than the previous year. The FDI Flows rose marginally in developing Asia and Latin America and the Caribbean, and remained flat in Africa. Developing Asia regained its position as the largest FDI recipient region in the world, followed by the European Union (EU) and North America.
In the world’s transition economies, FDI declined by 17 per cent to an estimated $55 billion, mainly due to a drop in the Russian Federation and lacklustre inflows across most of the Commonwealth of Independent States (CIS).
“The decline of global FDI flows is in stark contrast to other macroeconomic variables, such as GDP and trade growth, which saw substantial improvements in 2017,” said James Zhan, Director of UNCTAD’s Investment Division. “Upward synchronisation of the trends in 2018 is probable, but risks are abundant.”
The UNCTAD Global Investment Trends Monitor also showed that, after three years of growth, cross-border mergers and acquisitions declined in 2017. Their growth had already slowed in 2016, and they went on to contract by 23 per cent in 2017, to $666 billion. However, this still represented the third-highest level since 2007.
Preliminary data on the value of announced greenfield FDI projects show a decline of 32 per cent to $571 billion, or 17 per cent in number of projects, their lowest level since 2003. If confirmed, the drop in greenfield project announcements would be a negative indicator for the longer term. Of particular concern is the near halving of the value of project announcements in developing economies, although the fall in project numbers was limited to 23 per cent.
Higher economic growth projections, trade volumes and commodity prices would normally point to a potential increase in global FDI in 2018. However, elevated geopolitical risks and policy uncertainty could have an impact on the scale and contours of any FDI recovery in 2018. In addition, tax reforms in the United States are likely to significantly affect investment decisions by US multinationals, with consequences for global investment patterns.