A chance to learn from others

- POST REPORT, Kathmandu
A chance to learn from others

Nov 11, 2014-

Infrastructure Summit 2014 organised by the Confederation of Nepalese Industries (CNI) kicked off here on Tuesday. As a prelude to the conference which is the first such event to be held in Nepal, The Kantipur Publications held a round-table discussion with various experts, business captains and planners. They said that Nepal’s development process hinged on how policy-related issues were resolved to provide a better working condition for the private sector and foreign investors. Excerpts: 

Tulasi Prasad Sitaula, Secretary

Ministry of Physical Infrastructure and Transport

Various conferences focusing on hydro and road projects have been held in the past, but this is indeed the first conference representing the overall infrastructure sector. We have learned many things from the past conferences. Talking about this summit, after the CNI first proposed to the government to hold the meeting, we were immediately positive given its importance in the present context, and the government agreed to be a partner with the organizer. The ministry thinks that the whole country will benefit from this summit. As experts from many countries that have made good progress in infrastructure like India and China will share their ideas, we can learn many things from them.

Although the country has a huge potential in the infrastructure sector, we have not been working on it seriously. So we have not been able to show the world how capable we are. To show this potential, we have to organize these types of conferences frequently. Foreign investors have been asking about business opportunities and possibilities in Nepal, and the summit will be the right platform. We definitely will be working on resolving policies that are not favourable to giving momentum to the country’s economic growth. The country needs to invest at least 10 percent of the national budget on infrastructure development, and economic growth should be maintained at 10 percent to achieve the target of graduating Nepal to the status of a developing country by 2022. The event is perhaps very special for this purpose.   

A project bank is one of the issues that we have been talking about for a long time. We are seeking support from the CNI for that. We will be happy to see the leadership of the CNI. Nepali people buy shares of banks even if they haven’t heard the name of the bank. That means the public has enough money to invest in stocks. All we need to do is create an investment environment. What my experience shows is that we don’t have to wait for foreign investors. We should have confidence in ourselves.

The government has launched the build-own-operate-transfer (BOOT) model to attract private players to the infrastructure sector. Initially, it was implemented as a policy but later the BOOT Act was introduced. But nothing has been done so far since the last eight years after it was launched. We have been studying the reasons behind this. Our studies show that the act has not been working mainly due to two reasons -- the process is too complicated and various clauses in the act are unclear. Presently, we have been studying another option to the BOOT Act. It is now in the process of being amended.

Ramesh Gupta, Convener

Industrial Committee, CNI

The development of any country is not possible without infrastructure. It used to take 10 hours to reach Shenzhen from Guangzhou in China. Now, one can reach the destination within an hour. Without infrastructure, there is no development.

This fact is indeed known by all. Our politicians should realize that they cannot fool the people by saying that Nepal is still in the transition phase.

A few years ago, there were only two cement factories, namely Hetauda and Udaypur, both run by the government. No private investor were ready to open a cement plant. Now, there are three to four big cement factories in the country owned by the private sector and more are coming. We will be self-reliant in cement within two years.  

There are some difficulties in terms of infrastructure, mainly road and electricity. The factories are manufacturing cement powered by generators due to extended load-shedding hours. This has resulted in high production costs. The cost of a unit of electricity is Rs 8-9, but one needs to spend Rs 30 per unit by using a generator. In Bhutan, it costs Rs 1 for a unit of electricity.

We can reduce production costs only after uninterrupted electricity is supplied. We are hopeful that two big hydro projects will be completed soon and that they will ease the shortage of power. The summit will play a very important role in creating positive vibes among the authorities concerned.

Bishnu Kumar Agrawal, Convener

Infrastructure Committee, CNI

There are two reasons behind India’s rapid progress. In 1990, they announced the country as a free economy which made a difference in infrastructure development. Similarly, the then prime minister of India Atal Bihari Vajpayee’s economic policy with the plan of investing a huge amount of money in infrastructure played a very crucial role.

The Federation of Indian Chambers of Commerce and Industry (FICCI) has been organising the Indian Infrastructure Summit since 2003. They have made much progress in infrastructure development. Due to the good relationship between the

CNI and the FICCI, the summit became possible. We think that the country’s environment is suitable for the summit.

Indian Prime Minister Narendra Modi’s priority is also investment in infrastructure. Various agreements are being signed in Nepal these days. This is also creating an environment for investment.

The event also aims to make people understand the importance of infrastructure as it plays a very important role in their lives. As various donor agencies and other authorities concerned are taking part in the event, many positive things will come from it.

Khadga Bahadur Bisht, President

Independent Power Producers’ Association, Nepal

We are also partnering with the organiser besides organising various conferences on energy. As many countries treat energy like infrastructure, we are also moving ahead by according priority to the sector. In 1980, China adopted a free market economy. India adopted a free market economy in 1990. Nepal also became a free market economy at the same time. Although the private sector is free to generate electricity, it is not allowed to become involved in its distribution.

There are around a dozen airlines that maintain contact with their customers through their services, but the situation is different with hydro projects as they are not in contact with their customers. The Nepal Electricity Authority (NEA) has been acting as a curtain and preventing that from happening. India has entered the third stage of development, but we are still wallowing in the first stage.  

As the Ministry of Energy is the parent organisation of the NEA, it has not been addressing the private sector. So we are raising the issue that the ministry should not be biased against the private sector. The government has opened the NEA after dismissing committees. And once rejected committees are being re-established these days with the Budhi Gandaki Hydro Project.

Nicholas Pandey, President

Young Community for Nepalese Contractors

If the government can’t invest in infrastructure, we should go for the public-private partnership (PPP) model. We are going to discuss the PPP in the infrastructure sector during the summit. We should find out what sort of modality is suitable for the country.

There will be discussions among experts, government officials and representatives of the private sector. The construction industry is also facing various problems like other sectors. Due to lack of awareness programmes, local residents sometimes try to obstruct the construction process showing various effects. Contractors suffer losses in such situations. We will discuss various issues at the upcoming events.

Birendra Pandey, Vice-president

Young  Community for Nepalese Contractors

One of the important aims of the event is to increase investment in the infrastructure sector, besides informing people about the importance of infrastructure. Lack of awareness has been hampering the development process of hydro and road projects, among others. We hope that this will play a very important role in raising awareness.

The event will also provide information about the status and working environment of the projects in the country. There is also a session on power development agreement (PDA) and power trade agreement (PTA).

 

Published: 12-11-2014 10:15

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