Bhairahawa SEZ slated to open by mid-Nov

- POST REPORT, Kathmandu
Bhairahawa SEZ slated to open by mid-Nov

Sep 30, 2014-

Preparations to open the Bhairahawa Special Economic Zone (SEZ) by mid-November are at the final stages, said the Ministry of Industry (MoI).

Though the construction of the Bhairahawa SEZ was completed more than six months ago, it could not come into the operation due to the absence of relevant laws.

A SEZ bill has been awaiting parliamentary approval for the last five years. Due to the delay, a provision has been inserted in the proposed Industrial Enterprise Act which is yet to be endorsed by the Cabinet. However, the government has now planned to make another effort to introduce a separate SEZ Act.

Meanwhile, the government is mulling operating the Bhairahawa SEZ through a directive. The MoI has prepared a Bhairahawa SEZ Operation Directive based on which it will be operated. According to the MoI, the directive will soon be presented to the Cabinet for its go-ahead.

The SEZ Development Committee will inaugurate the administrative and service building by mid-November. The establishment of factories inside the zone will commence once the administration is set.

“We are almost ready to bring the SEZ into operation. The inauguration will happen by mid-November,” said Yam Kumari Khatiwada, joint secretary and spokesperson at the MoI.

With the private sector saying that the unavailability of a concrete legal framework has discouraged investors from moving into the SEZ, Khatiwada said that the factories operating in the SEZ would get a number of facilities and incentives which would be an encouragement to investors.

Meanwhile, the SEZ Development Committee has prepared an operation manual. The government has spent around Rs 520 million on the construction of infrastructure and acquisition of land for the SEZ. The administration block was built with an investment of around Rs 50 million.

The Bhairahawa SEZ is spread over an area of 35 hectares and it has been divided into 68 plots of 2,200 square metres each. It is expected to house over 200 factories.

The government had come up with the plan to operate the SEZ through the SEZ Development Committee after its attempt to introduce a separate act through an ordinance failed. The proposed act has provisioned offering special treatment to factories inside SEZs, including a 100 percent income tax exemption for five years and a 50 percent exemption for another five years.

Production units working inside SEZs will have to export at least 80 percent of their production. The act has provisioned a refund of a specified amount of customs duty, excise duty and value added tax to the exporters.

Meanwhile, the MoI has been mulling acquiring land at Kailali to set up another SEZ there by mid-November. The issue regarding the right of ownership of the acquired land will be finalized by the Cabinet. Similarly, the government will evict people from land that has been encroached upon to operate an SEZ in Simara by mid-December.

Published: 01-10-2014 08:15

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