The government’s plan to build a special economic zone (SEZ) in Biratnagar, the country’s eastern business hub, is in limbo due to lack of funds. The announcement to set up the SEZ was made five years ago, but the government has released no money to buy the required land.

Three years ago, the Special Economic Zone Development Committee had conducted a feasibility study to establish the SEZ on 312 bighas of land owned by Salt Trading Corporation. But the scheme hasn’t progressed beyond the drawing board.

“The plan to establish a SEZ in Biratnagar has been included in almost every budget statement for the last few years, but the government has failed to take concrete steps to make it happen,” said Pawan Sarada, president of the Morang Trade Association. “We have been informed that the Industry Ministry has forwarded the file to the Finance Ministry and asked for Rs810 million to buy land, but no headway has been made on this front.”

Meanwhile, confusion over the title to the land has added to the problem. It is not clear whether the potential site for the SEZ belongs to Salt Trading Corporation or Morang Sugar Mill.

The government has recently merged the Industry and Supply ministries. Earlier, Salt Trading Corporation was under the control of the Supply Ministry and Morang Sugar Mill was under the Industry Ministry. “Now both the public entities have come under the Ministry of Industry, Commerce and Supplies, and we are hopeful that it will initiate the development of the SEZ,” said Sarada. “It should take the proposal to construct the SEZ to the Cabinet and get its approval.” 

The local private sector has been demanding the development of the SEZ in the region for quite a long time. “It is very unfortunate that we don’t have a SEZ in Biratnagar, the region that pioneered industrial development,” said Abinash Bohora, central member of the Federation of Nepalese Chambers of Commerce and Industry, an umbrella organization of the country’s private sector. “As the country has got a stable government, it must prioritize the development of a SEZ in the region.”

Meanwhile, the private sector has been asking for the construction of an industrial area in the region apart from the SEZ. “The SEZ prioritizes only export oriented industries, but we are facing difficulties setting up factories as real estate prices have gone up significantly,” said Mukesh Upadhyay, president of the Chamber of Industries Morang.

“For example, if it costs Rs20 million to construct a factory building and set up the plant and machinery, it will cost around Rs100 million to buy the required land. Therefore, we need an industrial area in the region along with the SEZ.”