Thaindian News

Kathmandu, Sep 17 (IANS) Yet another Indian investment is in trouble in Nepal after Indian tobacco giant ITC’s joint venture shut down its garments factory and the Manipal Group has begun mulling an exit strategy.

United Telecom Limited (UTL), the first private company to enter Nepal’s telecommunication sector, has been dealt a blow by the Nepal government that has rejected the Indian joint venture’s plea for relief after suffering discrimination during the army-backed regime of deposed king Gyanendra Shah and even after the restoration of democracy.

UTL is a joint venture of Indian public sector undertakings Mahanagar Telephone Nigam Limited, Telecommunications Consultants India Limited, Videsh Sanchar Nigam Limited and Nepali partner Nepal Ventures Pvt. Ltd.

In 2005, two years after UTL began services in Nepal, its office was raided by the army as king Gyanendra seized power and disconnected telephone lines nationwide.

However, even after the state telecom entity’s phone services were allowed to resume, UTL was not allowed to operate in a bid to pave the way for a new private mobile phone services operator, pushed by the king’s son-in-law Raj Bahadur Singh.

The long disruption in services, which was repeated during the king’s turbulent regime, caused UTL to suffer financial loses as well as lose credibility.

Even after the royal regime fell in 2006, UTL’s expansion plans were put on hold deliberately by the government.

The beleaguered Indian joint venture subsequently asked the state telecom regulator to waive its royalty dues, citing the negative impacts it had suffered due to Nepal’s political turbulence.

However, it was on the cards that the appeal would be turned down, especially after the other major private phone services operator associated in the past with the royal son-in-law also began clamouring for the waiver of its own royalty dues.

A telecom committee appointed to look into UTL’s request has now ruled that the Indian JV has to clear its royalty dues worth over NRS 952 million.

If it fails to do so, UTL has been warned its operating licence would be scrapped.

The decision against the Indian JV comes after a series of controversial telecom deals approved by a former Maoist information and telecom minister, Krishna Bahadur Mahara, which, despite objections by a parliamentary committee, have not been revoked or investigated.

The UTL incident was strongly taken up with the earlier Nepal government by Indian External Affairs Minister S.M. Krishna when he visited Nepal in April.

The government was then headed by the communists and the then deputy PM, Bharat Mohan Adhikari, had promised to pay due consideration to the case.

However, with the fall of the communist government and the formation of a new Maoist government, the Indian JV finds its troubles starting once more.

The state move comes ahead of new Prime Minister Baburam Bhattarai’s first official visit to India, supposed to take place after he attends the 66th UN General Assembly in New York this month.

(Sudeshna Sarkar can be contacted at sudeshna.s@ians.in)