The government has agreed to reduce rental charge in the Special Economic Zone (Sez) in Bhairahawa.

High rental charge has been blamed for firms’ reluctance to install their production plants in the Sez.

In the last one and half years, the Sez Development Committee called for Expression of Interest (EoI) twice, but only 12 firms have so far expressed interest to relocate their factories to the Sez, according to the Ministry of Industry. The Sez, which was officially opened on November 18, 2014, can accommodate 200 factories.

At a press meet here 

on Wednesday, Industry Minister Som Prasad Pandey said the Finance Ministry has agreed to amend the Sez’s working procedure, reducing the rental fee.  

“As manufacturers have been reluctant to install their plants, citing ‘difficult clauses’, the government has amended working procedure to attract more firms,” said Pandey, expressing belief the Sez would come into operation soon. As per the existing rule, factory owners have to pay Rs150 per square metre in rental fee. The Sez Development Committee had asked the government to reduce the rate substantially to RS20-25 per square metre.

Yam Kumari Khatiwada, spokesperson for the Industry Ministry, hinted at the government’s agreement to reducing the rental charge. She, 

however, did not disclose the revised rate. Spread over 

235 hectares, the overall 

Sez area has been divided into 68 plots, each ranging from 1,468 square metres to 4,500 square metres. 

Based on this fact, a factory needs to pay an average of Rs3.6 million in rent annually as per the existing rate.

In the absence of a Sez Act, the Bhairahawa Sez is currently being operated under the Bhairahawa Sez Operation Standard and Procedure 2014. The Cabinet has passed the Sez Act and has been tabled in the Parliament for its formal endorsement. 

Chandika Prasad Bhatta, executive director of the Sez, said they have forwarded a proposal to the government to review provisions related to rental charge and eligibility of firms to operate in the Sez.

The government identified 17 types of firms eligible to operate in the Sez. 

“As many new types of firms may want to operate inside the Sez, we have requested the government to increase the number, while excluding those barred by the Industrial Business Promotion Act and Foreign Investment and Technology Transfer Act,” he said.

Meanwhile, the government has started the process to set up an industrial zone each in all seven provinces. Pandey said they have already allocated land in five provinces for the purpose, except for province number 4 and 6.

As per the ministry, the government has allotted 500 bigahas of land in Damak of Jhapa; 300 bigahas in Mayurdhap in Hetauda, Makawanpur; 813 bigahas in Motipur, Rupandehi; 525 bigahas in Naubasta of Banke; and 900 bigahas in Daiji of Kanchanpur.