The Special Economic Zone (Sez) Development Committee has signed a memorandum of understanding (MoU) with seven industrial and business firms to establish their factories at the country’s first dedicated area for industrial operation.

The committee has approved the applications of 11 firms to set up manufacturing units at Bhairahawa Sez, and it expects to sign MoUs with the remaining four soon, said Sundar Thapa, under-secretary of the committee. An MoU is a formal agreement made between two or more parties before they sign the final agreement.

After the MoU is signed, all the factories will complete their registration, said Thapa.  “The companies need to make payment to the Sez after the MoU is signed.”

Siddhartha Industrial Group, Jagadamba Synthetics, Hulas, Chetanseel Multipurpose, Arun Khola Multipurpose Cooperatives, Kiran Shoes and one unidentified firm have signed the MoU.

The committee has received proposals from 23 firms to set up factories in the Sez, and 11 of them have received permits in the first phase.

The administrative building of the Bhairahawa Sez was inaugurated in November 2014, a full 11 years after construction was begun. There are three building blocks in the estate. The zone is spread over an area of 35 hectares and has been divided into

68 plots of 2,200 square

metres each.

The Sez is expected to house more than 200 factories. The 23 firms who submitted proposals had asked for 48 plots out of the available 68 plots. Based on the proposal, these factories can be established on 35 plots. Sez will call for expressions of interest from prospective companies for the remaining plots, said Thapa.  

“The expressions of interest will be called only after the agreements with the 11 companies are concluded.” As the Sez failed to attract takers even after repeated calls for applications, the government had sharply reduced the rent for factories last year.

The zone can house 17 kinds of manufacturing industries, including food

and agro products, readymade garments, leather goods

and herbal products, among others.

Last Monday, the Legislative-Parliament approved the Sez Bill 2014 which was welcomed by investors. The bill, tabled by Industry Minister Nabindra Raj Joshi, prohibits

workers from holding any form of protest that may affect production.

“No matter what the prevailing law states, workers inside the Sez will not be allowed to carry out any sort of banda, protest or revolt that may inflict financial loss on production businesses,” states the bill.

The bill, which will become law after the President signs it, has also provisioned better salaries and benefits for the workers and the inclusion

of a workers’ representative in the complaint hearing mechanism.

“We have been receiving lots of inquiries from potential investors for the remaining plots,” said Chandika Prasad Bhatta, executive director of the Sez Development Committee. “We are also expecting foreign investors.”