Nepal to get new industrial policy under Maoists

October 22nd, 2008 - 5:16 pm ICT by IANS  

Kathmandu, Oct 22 (IANS) Nepal’s new Maoist-led government Wednesday said it would soon unveil a new industrial policy that would not just adjust or reform the strategies of earlier governments but aim at a “breakthrough”.The republic’s first prime minister Pushpa Kamal Dahal ‘Prachanda’, who had pledged an economic revolution in his first address to the nation and whose government has declared its plan to develop 10,000 MW of additional power in the next decade, announced that a new industrial policy was on the anvil while inaugurating a two-day symposium on private-public partnership in the capital.

Prachanda said the new policy was necessary for economic progress of Nepal and would pivot around private-public partnership, which, he said, was the best model for the country.

Prachanda, whose two-month-old government has taken initiative to resume talks with neighbour India on two mega hydropower projects that have been on the backburner for years, also said that the government was focusing on mega projects.

However, local investment was not sufficient to get them off the ground, he said.

During his official visit to India and the US, Prachanda has been urging foreign investors and non-resident Nepalis to increase investment in Nepal.

The declaration about a new industrial policy comes after an India-Nepal meeting on trade in New Delhi.

During the two-day meeting of the India-Nepal Inter-Governmental Committee on Trade, Transit and Cooperation to Control Unauthorised Trade that ended Monday, Indian Commerce secretary G.K. Pillai urged Nepal to create an “investor-friendly and enabling business environment with a view to attracting Indian investments”.

Besides an agreement to conclude the Bilateral Investment Promotion and Protection Agreement, Motor Vehicles Agreement and revised Double Taxation Avoidance Agreement at the earliest, India had raised the problems faced by prominent Indian joint ventures in Nepal.

India is particularly concerned about a controversial decision taken by the previous dispensation of prime minister Girija Prasad Koirala that could unleash chaos.

In July 2008, less than a month before the government ended, then minister for labour and transport management Ramesh Lekhak, who belongs to Koirala’s Nepali Congress party, ordered Indian telecom JV United Telecom Ltd (UTL) - whose Indian promoters are Mahanagar Telephone Nigam Ltd, Telecommunications Consultants India Ltd and Tata Communications Ltd - to absorb nearly 150 third-party contract workers.

Third-party contracting is a worldwide practice. Nepal’s state-owned Nepal Telecom does it, all embassies in Kathmandu have third-party security personnel, as well as leading hotels, call centres and the UN agencies in Nepal.

Lekhak’s decision overturned the recommendation of two government committees and created an unparalleled precedent.

Now the trade unions affiliated to the new ruling parties could start making similar demands.

Investors are also closely watching if the Maoist-led government, which draws much of its support from workers, is going to hike the minimum daily wage substantially.

There are reports that new Labour and Transport Management Minister Lekhraj Bhatt favours a hike but has been stopped by Prachanda.

There are also fresh fears about hydropower projects.

Though it seemed the ice had finally been broken with two Indian companies, the GMR Group and Satluj Jal Vidyut Nigam Ltd, being awarded two much-sought-after hydropower projects, Bhatt Wednesday wrote in a Nepali daily that the government’s main consideration has to be benefits to its own people and not India.

The investors, he wrote in the Naya Patrika daily, would have to spell out their projects for the uplift of the regions where the power projects were based.

He also said that with Nepal to be restructured as a federal republic, it would also have to be thrashed out as to who had a say in the awarding of the power projects, the state where it was located or the union.

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