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Date: May 11, 2010

Highlights

Millions of rupees worth of Indian currency (IC) has been flowing out from

Nepal's border districts to India with people depositing money in Indian banks

and buying insurance policies with Indian companies. The massive outflow

has resulted in a shortage of IC to the dismay of traders.

Heavily dependent on the Indian market for purchasing daily essentials,

people along the Nepal-India border are reeling under the shortage of Indian

currency (IC). Reports from various districts bordering India suggest that they

are not getting IC even to go for treatment in India. In some towns, money

changing companies have shut shop due to the IC shortage.

The stalled Community Managed Irrigated Agriculture Sector Project

(CMIASP) is set to get the rolling ball after the Asian Development Bank

(ADB) relaxed some “tough conditions” that hindred its implementation

process. The government had launched the project in 2006 with the ADB loan

of $200 million (Rs. 14 billion) in 35 districts of eastern and central regions.

The total project cost is $380 million.

Spice Nepal, which re-branded Mero Mobile as Ncell on March 12, has come

up with new plans to expand its customer network and services for corporate

clients. Thereafter, Ncell recently introduced a new corporate offer - closed

user groups (CUGs), targeting the corporate and business segment, which

according to Ncell has received very good response from the market and

existing customers.

Gold dealers have been forced to pull down their shutters earlier than usual at

7 p.m. because of lack of security. In the past, trading in gold used to continue

even after 8 p.m.

Nepal Oil Corporation (NOC) has sought Rs 1 billion in loans from the

government to beef up stock of petroleum products, citing political deadlock

and Maoist´s strike threat that could hit supplies in the days to come.

The country's sole secondary on Monday gained 5.75 points to close at 418.77

points. In today's trading session, except the hydropower and insurance, the

indices of all trading groups moved up.

Controversy over the procedure to appoint six labor attaches to different labor

destinations took a new turn on Monday after Commission for the

Investigation of Abuse of Authority (CIAA) took the appointment files under

its control for necessary investigation.

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The big three parties - UCPN (Maoist), Nepali Congress and CPN-UML -

could not sit for fresh round of talks on Monday as the Maoist standing

committee meeting continued till late evening. NC Vice President Ram

Chandra Poudel had requested Maoist Chairman Pushpa Kamal Dahal on

Sunday evening and Monday morning to sit for fresh round of talks.

The Unified Communist Party of Nepal-Maoist (UCPN-M) has decided to be

open about a party leader other than party Chairman Pushpa Kamal Dahal

becoming the next prime minister if the ruling parties agree to a national

consensus government.

The UCPN (Maoist) disrupted the parliament session on Tuesday alleging that

the government suppressed demonstrations held nationwide last week.

Prime Minister Madhav Kumar Nepal on Monday reiterated his commitment

to press freedom and that to creating an environment for the development of

media. He made this vow during a meeting with a delegation of National

Photo Journalists’ Forum (NPJF) at his office in Singha Durbar.

District Development Committee (DDC) Nuwakot has protested the directives

of the Department of Electricity Development (DoED) to use electricity

royalty exclusively in rural electrification project. DDC officials say the move

will affect the development projects being run with the money collected as the

charge for energy use.

Nearly four years after the commencement of the peace process, the political

parties have started serious discussions on the integration and rehabilitation of

Maoist combatants, though the issue is now intricately linked with government

formation.

Impractical taxation policy for gold traders has decreased the gold transaction

volume, blamed the traders. Tej Ratna Shakya, president of Nepal Gold and

Silver Dealers’ Association of Nepal (NEGOSIDA) said that the government

taxation policy is not practical for the traders.

Tourism Crisis Management Committee is actively coming up with plans to

support and facilitate tourists during bandh and strike programmes.

Ten political parties including Unified CPN (Maoist), Madhesi Janadhikar

Forum (MJF) and eight other fringe parties have called for Prime Minister

Madhav Kumar Nepal's immediate resignation to make way for the formation

of a national unity government, Monday.

Unified CPN (Maoist) vice-chairman Dr. Baburam Bhattarai said that the

Constituent Assembly's (CA) term which expires on May 28 will not be

extended till the government makes way for a national government headed by

them.

Foreign diplomats have expressed dissatisfaction at the failure of the

government to take stronger initiative to resolve the current political crisis.

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Stating that the four-year-old peace process was still fragile, European and US

diplomats based in Kathmandu on Monday strongly urged the government not

to close the field offices of the Office of the High Commissioner for Human

Rights (OHCHR). They also urged the government to be flexible while

negotiating with the Maoists, who, they said, had offered a window of

opportunity by withdrawing their strike on Friday.

Some slogans chanted against UCPN (Maoist) Chairman Pushpa Kamal Dahal

have been recorded at the parliamentary meeting on Monday.

BANKING:

Depositors rush to Indian banks

Millions of rupees worth of Indian currency (IC) has been flowing out from Nepal's

border districts to India with people depositing money in Indian banks and buying

insurance policies with Indian companies. The massive outflow has resulted in a

shortage of IC to the dismay of traders.

Many local people and traders have purchased policies from the Life Insurance

Corporation of India. According to bank sources, Nepalis have deposits of Indian Rs.

850 million in the State Bank of India, Rs. 550 million in United Commercial Bank

and Rs. 450 million in the Central Bank of India in the bordering Indian town of

Jogbani. Insurance agents say Nepalis are being lured to Indian insurance companies

because they offer more attractive policies than Nepali companies. The premiums

have to be paid in IC.

Rajesh Sharma, an agent of an Indian insurance company in Biratnagar, said people

have purchased insurance policies for Indian Rs. 50,000 to Rs. 10 million.

There are more than 400 agents of Indian insurance companies like the Life Insurance

Corporation of India, Birla and Max in Biratnagar and surrounding markets. They go

door-to-door on a monthly or quarterly basis to collect premiums from their

customers, said Sharma.

Employees of the State Bank of India, United Commercial Bank and the Central Bank

of India based in bordering Jogbani are working as agents of various insurance

companies. According to Debu Giri, an agent of American Life Insurance Company,

Indian insurance companies collect more than Rs. 10 million in premiums quarterly

from Biratnagar alone.

Economist P.K. Jha said the trend had led to the transfer of millions of rupees in

Indian currency on a monthly basis. "It is unfortunate that the Indian rupees purchased

by selling US dollars goes back to India," he complained.

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According to him, Nepalis have deposits worth Indian Rs. 28-30 billion in various

Indian banks based in Forbesganj, Raxaul and Delhi. Depositors are attracted to

Indian banks as they offer higher interest rates. These Indian banks were offering an

annual interest rate of 7 percent on savings and 12 percent on fixed deposits when

Nepali banks were paying just 4 percent on savings and 9 percent on fixed deposits.

A director of NIC Bank Tulasi Ram Agrawal said that Nepali depositors could not be

lured back to Nepali banks even by offering higher interest rates because of the

political instability in the country.

In the eastern region, IC provided by Nepal Rastra Bank is being used for illegal

transactions. Traders say the IC that the Biratnagar branch of the central bank

provides through its two dozen exchange counters reaches the border points

immediately.

Nepal Rastra Bank's Biratnagar branch releases more than Indian Rs. 900,000 to its

exchange counters. Sources claim that the IC is taken to Indian border towns like

Jogbani, Sikti, Kursakatta, Kasat, Kuwadi and Fulbadia.

Illegal traders need IC to pay their Indian suppliers in cash as they lack official

purchase documents. Goods worth more than Rs. 2 million are smuggled through

Rangeli, Diania, Jhurkia, Betauna, and Aamgachi daily.

Senior vice president of the Morang Merchant Association and a director of NIC

Bank Agrawal said that genuine entrepreneurs were having a hard time obtaining IC

despite strenuous efforts.

Chief manager of the Biratnagar branch of Nepal Rastra Bank Dr. Bhuwanes Prasad

Pant said that the central bank would investigate where the money provided to the

exchange counters was going.

http://www.ekantipur.com/the-kathmandu-post/2010/05/10/business/depositors-rush-

to-indian-banks/208145/

IC crunch beats liquidity crisis

Heavily dependent on the Indian market for purchasing daily essentials, people along

the Nepal-India border are reeling under the shortage of Indian currency (IC).

Reports from various districts bordering India suggest that they are not getting IC

even to go for treatment in India. In some towns, money changing companies have

shut shop due to the IC shortage.

People are compelled to pay as much as Rs. 170 against IRs 100. Understandably,

unscrupulous elements are taking advantage of such a situation by depositing Nepali

currency in Nepali banks and going on to withdraw that amount immediately from

Indian banks in cold IC cash in order to sell the Indian banknotes at a premium in the

Nepali black market.

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Bankers also have admitted to such a tendency on the part of some depositors. “Banks

have nullified the ATM cards of some customers who are into suspicious withdrawals

frequently from ATMs,” said Sashin Joshi, president of Nepal Bankers’ Association

(NBA).

Nepal Investment Bank Limited (NIBL) which has one of the highest ATM

cardholders’ base, stated it cancelled the ATM cards of many of its customers who

were wont to withdraw huge amounts in cash IC frequently right after depositing

money in Nepali currency.

“With the stringent measure taken by the bank, the withdrawal of IC cash from Indian

ATM counters has come down to Rs. 4 million from around Rs. 30 million just a

month ago,” said Prithvi Bahadur Pandey, chief executive officer of NIBL.

Bankers have implemented the policy that they would not permit the withdrawal of

more than IRs 25,000 from Indian ATM counters in a single day as per the decision of

NBA. Earlier, some banks were allowing withdrawals up to Rs. 100,000 a day.

A banker said that some banks had also issued seven to eight ATM cards for a single

account.

After Nepal Rastra Bank (NRB) tightened the screws on IC cash transactions, the

market witnessed a shortage of Indian currency especially in the border areas. “NRB

took this measure to discourage people’s tendency to deposit money in Indian banks

and purchase insurance policies of Indian companies,” said a senior NRB official.

“Because of the cash transaction, the risk of capital flight was a distinct possibility.”

This tendency has also been attributed to the rising demand for IC banknotes that

triggered the shortage in the market.

NRB has already banned purchasing Indian insurance policy and depositing money in

Indian banks. Both NRB and other banks maintained that there was no shortage of IC.

“Genuine importers can get the required amount of IC through TT/draft and other

document based measures,” said the NRB official. Until April 16, NRB had reserves

of IRs 720 million.

o People in border districts can’t go to India for medical treatment

o Money changing firms have shut shop

o People paying NRs. 170 against IRs. 100

o Unscrupulous elements depositing NRs in Nepali banks and

withdrawing Indian currency from Indian banks

o People depositing cash in Indian banks and purchasing insurance

policies of Indian companies

o NRB bans purchasing Indian insurance policies, depositing money in

Indian banks

o

http://www.ekantipur.com/the-kathmandu-post/2010/05/10/top-story/ic-crunch-beats-

liquidity-crisis/208116/

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ADB project to roll

The stalled Community Managed Irrigated Agriculture Sector Project (CMIASP) is

set to get the rolling ball after the Asian Development Bank (ADB) relaxed some

“tough conditions” that hindred its implementation process.

The government had launched the project in 2006 with the ADB loan of $200 million

(Rs. 14 billion) in 35 districts of eastern and central regions. The total project cost is

$380 million.

A mid-term review team from the Manila-based central office of ADB on a field visit

here from April 7-20 visited the projects sites and revived the earlier set conditions for

the implementation of CMIASP.

Interestingly, the government was about to list CMIASP as a “failed project”.

CMIASP chief Nabin Mangal Joshi said the tough conditions set by the donor dealt a

heavy blow to the project. Now the terms have been softened and the project is ready

to roll, he said.

“Earlier, the ADB had to agree even minor components of the project for its

implementation and the process took a long time than expected,” he said.

The ADB head office used to endorse the designs of sub-projects and contracts, but

now the Kathmandu-based CMIASP office will look into these issues, he said.

http://www.ekantipur.com/the-kathmandu-post/2010/05/10/nation/adb-project-to-

roll/208128/

BUSINESS & ECONOMY:

Spice to scale up Ncell ladder

Spice Nepal, which re-branded Mero Mobile as Ncell on March 12, has come up with

new plans to expand its customer network and services for corporate clients.

Thereafter, Ncell recently introduced a new corporate offer - closed user groups

(CUGs), targeting the corporate and business segment, which according to Ncell has

received very good response from the market and existing customers.

"The offer has been successful in attracting the corporate segment," said Mansur

Khamidov, chief commercial officer of Ncell. "It allows customers to make as many

calls as they want at just 60 paisa per minute within their group."

Under the CUG scheme, any Ncell number can be added to the CUG with an approval

letter from the contract owner. Special on-net tariff of Rs.1.60, special data package,

competitive rate for international SMS at Rs.5 and special international call rate

starting from Rs. 4 to the United States, Rs. 5 to countries like India, China, Hong

Kong, Singapore and Thailand and up to Rs. 6 for making calls to Malaysia and South

Korea, are some of the features the corporate offer holds.

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It costs Rs. 600 to subscribe to the corporate offer, wherein the subscriber also gets

free talk-time worth Rs. 300. The offer is the first of its kind in Nepal and one that

allows the subscriber to make calls at a cheaper rate.

Overwhelmed by the response, Ncell is also planning to roll out more attractive and

suitable offerings to the corporate and business segment based on demand. It is

working to offer 3G, special dedicated key account manager for each corporate client,

bulk SMS service and Blackberry service.

A playing it close to the chest Khamidov said, he would not like to comment on the

issue right now. "However, whenever there is a new service we will make an official

announcement," he added.

Ncell has been trying to collect the requirements from the corporate segment to create

services based on their demand. "We are flexible about providing world class services

based on the requirement of the corporate sector clientele," said Khamidov.

http://www.ekantipur.com/the-kathmandu-post/2010/05/10/business/spice-to-scale-

up-ncell-ladder/208141/

Early night for gold shops

Gold dealers have been forced to pull down their shutters earlier than usual at 7 p.m.

because of lack of security. In the past, trading in gold used to continue even after 8

p.m.

Bijoy Raj Baraily, proprietor of New Jaya Laxmi Jewellery Home, said, "Though the

wedding season is on, we are compelled to close our shops as early as before 7 p.m."

He added that increased incidents of abduction and murder of entrepreneurs had

compelled gold dealers to shut their shops early for fear of their property and lives.

Manish Pradhan, proprietor of Asri Jewellers, said that the security situation of the

country was deteriorating day by day bringing evening business to a complete close.

However, Pawan Agrawal, proprietor of Jai Matadi Gold Palace, suggested that

traders should "adjust" to the situation instead of crying for "more security" from the

government. He said, "The gold business is not the only one suffering insecurity, the

whole country is teetering on the brink of uncertainty." Tej Ratna Shakya, president of

the Nepal Gold and Silver Dealers Association, accepted that gold traders feared for

their security as gold was a precious metal and it was not safe to run their businesses

after dark.

He said, "The government's security arrangement cannot be trusted as shops that have

been robbed have not received their property back even though the culprits have been

arrested."

http://www.ekantipur.com/the-kathmandu-post/2010/05/10/business/early-night-for-

gold-shops/208143/

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NOC seeks Rs 1b loans from govt

Nepal Oil Corporation (NOC) has sought Rs 1 billion in loans from the government to

beef up stock of petroleum products, citing political deadlock and Maoist´s strike

threat that could hit supplies in the days to come.

Digambhar Jha, NOC chief, who forwarded a letter to this connection to Ministry of

Commerce and Supplies on Monday, said NOC´s storage tanks across the country

have less than two-thirds fuel in stock at present.

Given its recent deteriorating fund flow, NOC has said that it would not be able to

replenish stock from its own resources.

"When we were making profits, we served interests and loans. But we have continued

to operate with net loss for the last four months," Jha told Republica.

NOC has argued that loan was needed for building up strategic stock so that it could

continue to maintain supplies in case political fiasco continued and unfortunate

mishaps struck the country.

The request from NOC comes at a time when it still has loans of over Rs 7 billion to

repay to the government. It had taken those loans to finance imports over the span of

four years when government´s continued apathy to adjust domestic oil prices in line

with import rates turned it bankrupt.

NOC said it has just about 18,000 kiloliters (KL) of diesel in stock, which is far less

than its storage capacity of 42,370 KL. Likewise, its nationwide petrol stock stands at

3,030 KL, which is about 60 percent of its total storage capacity. Its kerosene stock

stands at 11,800 KL, which is three-fourths of its storage capacity, and aviation fuel

stock stands less than two-thirds of its capacity.

Stock of fuel at Thankot, the main supply outlet for the Kathmandu Valley, stands

much lower than our national average stock, Jha said.

"We have continued to serve loans whenever we could. But to prepare for possible

adverse situation, we still have no option but to turn to government for finances," he

said, referring to recent rise in loss figures of petroleum import monopolist.

The government has continued to adjust prices of oil over the last four months, when

international crude prices started to jump. However, it has preferred to left prices of

liquefied petroleum gas (LPG) untouched. This single product accounts for more than

two-thirds of the total loss of NOC.

The latest import rates and fund flow estimates of NOC show it will suffer a loss of

Rs 190 million -- from its estimated loss of Rs 310 million in the month of May --

from LPG business alone.

"Our loss figure on diesel too has jumped to Rs 4.10 per liter this month from about

Rs 3 of April," Jha said.

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Meanwhile, NOC has reported a loss in its profit margin from aviation fuel to Rs 8

per liter from Rs 15 of the past and kerosene to Rs 4 per liter from Rs 7 of April.

Due resurfaces with IOC

As NOC imported more fuel than what it actually paid to the Indian Oil Corporation

(IOC), its outstanding due to its sole supplier of fuel has surfaced yet again. "As at

April end, we have some Rs 340 million in outstanding account to settle to the IOC,"

said Jha.

He said rise in volume of consumption and NOC´s downturn fund flow over the last

few months were behind the reemergence of the situation.

http://www.myrepublica.com/portal/index.php?action=news_details&news_id=18461

MARKET:

NEPSE gains 5.75 pts

The country's sole secondary on Monday gained 5.75 points to close at 418.77 points.

In today's trading session, except the hydropower and insurance, the indices of all

trading groups moved up.

The hydropower lost 3.65 points to rest at 643.45 points while the insurance went

down by 0.12 points to finish at 552.7 points.

The commercial banks, heavyweight in NEPSE, gained the most as it went up by 9.06

to reach to 377.59 points.

The group categorised as others saw a growth of 3.53 points to end at 516.99 points,

finance gained 1.05 points to end at 411.88 points and development banks gained 0.46

points to incline to 425.83 points.

The sensitive index, which measures the performance of Grade A companies, gained

1.77 points to close at 102.67 points.

The NEPSE today traded 46.122 units of shares amounting to Rs 13,962,044 in 652

transactions.

The capital market witnessed a four-year low in its turnover on Sunday. The market

yesterday witnessed a turnover of just Rs. 9.6 million which is the lowest since May

27, 2007 when the share market had seen a turnover of just Rs. 3.05

million.nepalnews.com

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POLITICS:

CIAA drawn to appointment row

Controversy over the procedure to appoint six labor attaches to different labor

destinations took a new turn on Monday after Commission for the Investigation of

Abuse of Authority (CIAA) took the appointment files under its control for necessary

investigation.

The anti-corruption watchdog took all documents related to the appointment process

from Ministry of Labor and Transport Management on Monday, a source at MoLTM

told Republica. “CIAA officials took away all documents related to the appointment

process to probe the case, following complaints about the irregularities in the

appointment process,” the source added.

Minister for Labor and Transport Management Mohamad Aftab Alam had

manhandled foreign secretary Madan Kumar Bhattarai a few days ago to exert

pressure on the Foreign ministry to endorse the appointment of six labor attaches

Protesting the manhandling of the foreign secretary, employees of Foreign ministry

expressed their dissatisfaction with Prime Minister Madhav Kumar Nepal and Foreign

Minister Sujata Koirala on Monday. Responding to the employees, PM Nepal has

called a meeting of Foreign minister, Labor minister and secretaries of the concerned

ministries to resolve the issues.

Employees of both the Foreign and Labor ministries have been expressing their

dissatisfaction over the entire appointment process.

MoLTM had last month appointed labor attaches to six labor destinations, ignoring

even the reasonable minimum qualifications. The ministry had appointed under

secretaries Kashi Raj Dahal and Krishna Hari Puskar Karna as labor attachés to Japan

and South Korea respectively.

Similarly, the ministry had appointed section officers Bhabiswor Pandey, Bishnu Hari

Upadhyaya, Murari Osti and Bishal Bhattarai as labor attaches to Hong Kong, Oman,

Israel and Kuwait respectively. Among the new appointees, only Bhattarai and

Upadhya have experience in foreign employment sector.

The Ministry of Finance (MoF) had given consent to create new posts of labor

attaches, on condition that labor attaches would be selected through internal

competition among the candidates having good command in English language and

knowledge about the foreign employment sector.

Sources at MoLTM said Minister Alam has been pressing the Foreign ministry to

endorse the appointment of labor attaches to Japan, South Korea and Oman at the

earliest.

http://www.myrepublica.com/portal/index.php?action=news_details&news_id=18467

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Three-party talks uncertain

The big three parties - UCPN (Maoist), Nepali Congress and CPN-UML - could not

sit for fresh round of talks on Monday as the Maoist standing committee meeting

continued till late evening.

NC Vice President Ram Chandra Poudel had requested Maoist Chairman Pushpa

Kamal Dahal on Sunday evening and Monday morning to sit for fresh round of talks.

Poudel said he also had talks with UML Chairman Jhala Nath Khanal over phone on

the three-party talks Monday morning. "The three-party could not take place on

Monday as the UML also remained busy in its standing committee meeting," said

Poudel.

The NC and the UML are scheduled to hold meeting on Tuesday before sitting for

talks with the Maoists. It is still uncertain whether the talks with the Maoists will be

held Tuesday.

The UML had called its Standing Committee meeting to develop party´s position in

view of the approaching May 28 deadline for drafting new constitution and Maoists´

decision to postpone general strikes. Adhikari said the standing committee meeting on

Tuesday will take decision on the UML´s stance.

Adhikari added that they will try to find solution to the problems through package

deal on entire six-point agenda sorted out earlier.

http://www.myrepublica.com/portal/index.php?action=news_details&news_id=18472

Maoists open about PM candidate

The Unified Communist Party of Nepal-Maoist (UCPN-M) has decided to be open

about a party leader other than party Chairman Pushpa Kamal Dahal becoming the

next prime minister if the ruling parties agree to a national consensus government.

The two-day party standing committee meeting that concluded Monday took a

decision to this effect. “Our stance is that the party chairman should lead the national

government. But we also decided to be open to appointing another party leader as

prime minister if other parties agree,” said a Maoist standing committee member

requesting anonymity.

According to sources, party leaders including Barsaman Pun and Top Bahadur

Rayamajhi had vociferously put forth the view that the party should be ready to make

another party leader the next prime minister if doing so would lead to national

consensus.

“What we mean is, our party being the largest in parliament should lead the

government. The party chairman should obviously lead the government. But it doesn´t

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mean there cannot be any other option,” said Maoist standing committee member

Amik Serchan.

The party has decided not to hold formal talks with the ruling parties until Prime

Minister Madhav Kumar Nepal steps down. “But it doesn´t mean we are not holding

backdoor meetings for a consensus,” said a senior Maoist leader.

There was an intra-party tussle between Dahal and Vice-chairman Dr Baburam

Bhattarai over who should lead the next government.

The party´s decision comes in the wake of failure to topple the incumbent government

even after enforcing a six-day nationwide general strike and thousands of Maoist

cadres and supporters from across the country heating up the streets of Kathmandu.

Owing to intense domestic and international pressure, the party called off its

indefinite strike Friday. Just ahead of the demonstration, the party had reaffirmed

Dahal as prime ministerial candidate.

The rift between Bhattarai and Dahal widened after the latter removed Bhattarai from

the post of deputy leader in parliament and later an audio record was leaked to media

in which Dahal accused Bhattarai of being India´s choice for next prime minister of

Nepal. Immediately after that Dahal had gotten the party central committee to endorse

himself as prime ministerial candidate.

10 parties jointly appeal for govt dissolution

Meanwhile, 10 political parties at the initiative of the UCPN-M issued a joint

statement calling for the resignation of Prime Minister Madhav Kumar Nepal.

The parties issued a joint statement after holding a meeting at Maoist party

headquarters at Parisdanda Monday afternoon.

The joint statement states that national independence, federalism, republicanism,

secularism, social justice, peace and constitution are their common goals and that the

incumbent government should resign to create an atmosphere for national consensus

and for achieving the goals. According to Maoist spokesperson Dinanath Sharma, the

parties have formed a joint front to safeguard the new changes and defeat conspiracy

to dismantle them.

The parties to sign the statement are: UCPN-M, Madhesi People´s Rights Forum,

CPN (United), Nepal Sadbhavana Party (led by Sarita Giri), Nepali Janata Dal,

Rastriya Janamukti Party, Nepa Rastriya Party, Sanghiya Loktantrik Rastriya Manch,

Chure Bhavar Yekata Party (signed by general secretary Bhumiraj Niraula) and Dalit

Janajati Party. Altogether these parties have 276 seats.

http://www.myrepublica.com/portal/index.php?action=news_details&news_id=18475

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House disrupted

The UCPN (Maoist) disrupted the parliament session on Tuesday alleging that the

government suppressed demonstrations held nationwide last week.

Maoist lawmakers walked out of the session after the party’s CA member Amik

Sherchan announced the boycott stating that the session would not run smoothly

unless the government took action against those suppressing the peaceful agitation.

The session has been postponed until Wednesday. Speaking before the House,

Sherchan said his party would not support the amendment to the Interim Constitution

to extend the tenure of the Constituent Assembly (CA) unless Prime Minister Madhav

Kumar Nepal resigns.

http://www.ekantipur.com/the-kathmandu-post/2010/05/10/nation/house-

disrupted/208124/

Nepal all for press freedom

Prime Minister Madhav Kumar Nepal on Monday reiterated his commitment to press

freedom and that to creating an environment for the development of media. He made

this vow during a meeting with a delegation of National Photo Journalists’ Forum

(NPJF) at his office in Singha Durbar.

The premier also announced that preparations were underway to set up a separate

media room at his office in a bid to look after media related issues. The delegation

met Nepal to draw his attention to Sunday’s attack on photo journalists. During the

picketing of Singha Durbar, agitating UCPN (Maoist) cadres had attacked two photo

journalists – Rabindra Shrestha of Avenues Television and Prabin Maharjan of

Associated News Agency – smashing Shrestha’s camera. Many other journalists also

complained of harassment from the Maoist cadres.

“The government will leave no stone unturned for the development of the free press,”

the prime minister said, urging the political parties not to incite their cadres to attack

the press. Nepal, however, demanded that the media keep their limits.

The team led by NPJF Chairman Min Bajracharya sought insurance of life and

equipment of photo journalists as well as an initiative to check attacks on press and

action against the culprits. Nepal promised to take action against the guilty.

http://www.ekantipur.com/the-kathmandu-post/2010/05/10/nation/nepal-all-for-press-

freedom/208121/

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GENERAL:

DDC at odds with DoED over royalty

District Development Committee (DDC) Nuwakot has protested the directives of the

Department of Electricity Development (DoED) to use electricity royalty exclusively

in rural electrification project.

DDC officials say the move will affect the development projects being run with the

money collected as the charge for energy use. The DDC receives an estimated Rs 30

million annually from the Nepal Electricity Authority. It is said the DoED’s order was

largely guided by the fact that nearly half of the villages in Nuwakot are without

electricity. The DDC, meanwhile, argues that Nuwakot lacks skilled technicians to

launch rural electrification programme, and thus the electricity royalty is being used

in other development projects.

Hari Pyakurel, a DDC officer, said about 40 percent of the district-level development

projects are being financed by the electricity royalty.

The DDC has written to the DoED asking it to reconsider the decision and is waiting

for the latter’s response.

http://www.ekantipur.com/2010/05/11/national/ddc-at-odds-with-doed-over-

royalty/314062/

Parties enmeshed in age-old game of chicken-and-egg

Nearly four years after the commencement of the peace process, the political parties

have started serious discussions on the integration and rehabilitation of Maoist

combatants, though the issue is now intricately linked with government formation.

The initiatives come as political and constitutional crises loom large with deepening

distrust among parties and uncertainty over the future of the CA and drafting of the

new constitution by the May 28 deadline.

The ruling parties, mainly Nepali Congress (NC) and the CPN-UML, maintain that

consensus over the modality and number of combatants to be integrated in the

security agencies is a must for the “package deal” that will avert the current crisis.

However, the main opposition and the ruling parties don’t see eye to eye on the

latter’s position.

“We want the numbers of combatants to be integrated in the Army and other security

agencies fixed as early as possible,” said NC leader and member of the Special

Committee Ram Sharan Mahat. “Transformation of the Maoists into a civilian party

will pave a way for the formation of national consensus government.”

Maoist leaders, however, say progress on integration and rehabilitation can only be

part of the larger deal, the so called package, and it is very much tied to the change in

government.

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“We are ready to bring the combatants in the chain of command of the government

(Special Committee for Supervision, Integration and Rehabilitation of Maoist

combatants) if it can guarantee the formation of a national consensus government,”

Chandra Prakash Khanal, the PLA Deputy Commander said. “We can also prepare

options for those preferring to start civilian life and rehabilitation in society, on the

condition that it ends the current stalemate.”

Khanal maintains that the row over modality and number for integration can be

resolved only by offering alternatives to each of the combatants living in the UNMIN-

monitored cantonments. “If we fix a number without a field study it will be tough

managing the situation and making a call on what should be done about the rest,”

added Khanal.

NC’s Mahat meanwhile argues that the combatants should be “regrouped” in three

camps – those opting for a/ integration; b/ rehabilitation; c/ and those wanting to

return to civilian life. “If that is not done now, there is a strong possibility that all

combatants would choose the option of integration,” he said.

In April, Prime Minister Madhav Kumar Nepal had proposed a one-month action plan

aiming to start the integration and rehab process, with three alternatives – integration

of 3,000 combatants; integration based on the one weapon-one soldier formula; and

other “proper alternative” – which was not spelled out.

But the action plan failed to make much headway as it was unveiled without the

assent of the main opposition. The ruling parties now maintain that they are ready to

revise the plan and sources in the main opposition indicate that they are ready to be

“flexible” on numbers to allay NC-UML fears of en masse integration.

A Maoist leader said if politics take “a positive turn”, there will be an agreement on

integration of up to 7,000-8,000 combatants in the security agencies. “We are also

ready to complete the process at least two months before the promulgation of the new

constitution, provided that the other parties agree to take measures towards

democratising the Nepal Army.”

“It seems the Maoists want to move forward on integration, if their move can be

instrumental to meet their goal of formation of new government,” said an analyst

following the integration process. “They will demonstrate more flexibility if the issue

comes as a component of the package deal – including those linked with the new

constitution.”

http://www.ekantipur.com/the-kathmandu-post/2010/05/10/nation/parties-enmeshed-

in-age-old-game-of-chicken-and-egg/208122/

Call to change taxation policy

Impractical taxation policy for gold traders has decreased the gold transaction

volume, blamed the traders.

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Tej Ratna Shakya, president of Nepal Gold and Silver Dealers’ Association of Nepal

(NEGOSIDA) said that the government taxation policy is not practical for the traders.

“According to the policy, government has imposed tax on more than 15 per cent of

profit, which is not practical for gold and silver traders,” said Shakya. According to

him, in raw gold total profit a trader gets is 0.001 per cent while incase of ornaments

the profit is only 0.5 per cent to two per cent which is quite minimum.

“During the transaction of one kg of gold we have to invest about Rs 2.7 million and

the profit earned from it ranges from Rs 4,000 to Rs 5,000 on an average and rarely its

upto Rs 8,000,” Shakya said adding that government should revise the taxation policy

for the gold and silver traders.

At present, traders need PAN number to buy gold from the banks but most of the

traders do not have transactions record as they are suffering from low volume of

transactions.

“The traders are afraid of the ineffective taxation system that is neither encouraging

nor effective for the gold traders,” he added. “It has also decreased the volume of

transaction and has increased black marketing.”

http://www.thehimalayantimes.com/fullNews.php?headline=Meddlesome+diplomacy

&NewsID=243585

Crisis management team to help tourists

Tourism Crisis Management Committee is actively coming up with plans to support

and facilitate tourists during bandh and strike programmes.

“We are making effective preparations to tackle the situation and help tourists during

bandh and agitation programmes,” Bikram Neupane, coordinator of Tourism Crisis

Management Committee and Security, and chairman of Himalayan Rescue

Association (HRA) said.

Frequent strikes and bandh is affecting tourism industry. Decline in the number of

tourists arrival, cancellation of hotel bookings and reservations are negative impacts

paralysing the tourism industry. Though, the Tourism Crisis Management Committee

was formed a year ago to provide special facilities and packages to avoid

inconvenience to tourists during any kind of disruption, it is now planning to develop

precautionary measures packages in affiliation with hotels and restaurants for tourists

during bandhs. “It is also starting shuttle services in coordination with locals at remote

areas incase of transportation strike and use identical uniforms for people working in

tourists transportation during emergency situations,” Neupane said adding that there

are also concerns shown by different tourism entrepreneurs to grant facilitation in visa

during Nepal Tourism Year 2011.

Meanwhile, Hotel Association Nepal (HAN) has said that most of the hotels had

bookings and reservations cancellation due to the recent general strike. “Indian

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tourists and European tourists did majority of the hotel booking cancellations,”

informed Madhav Om Shrestha, executive chairman of HAN.

“Due to the general strike hotel sector faced a total loss of about one billion,” he said

adding that there is a need to flow positive information to avoid tourists decline in the

next peak season. “We are suffering losses due to booking cancellation of May, June

and July but we have to make up our loss in the next season,” Shrestha said. “The

cancelled booking also has higher possibilities to get revised if peace and security is

maintained in the coming months.”

According to TIA immigration office, this is the eleventh consecutive month that has

witnessed growth in the international tourists arrival confirming the improved

prospects for Nepal due to the rising business and consumer confidence. In the first

four months of 2010 a robust 21 per cent cumulative growth has been observed in

comparison with the same period last year.

However, tourism entrepreneurs opined that there must be special publicity

programmes and flow of positive informations to help increase the tourist arrivals.

Hotel booking cancellation

Hotel De l Annapurna 20 pc

Hotel Everest 20 pc

Hotel Malla 30 pc

Hotel Radisson 30 pc

Hotel Shangri-La 7 pc

Hotel Soaltee 50 pc

Hotel Shanker 25 pc

Ten parties including UCPN (Maoist) call for PM's resignation

Ten political parties including Unified CPN (Maoist), Madhesi Janadhikar Forum

(MJF) and eight other fringe parties have called for Prime Minister Madhav Kumar

Nepal's immediate resignation to make way for the formation of a national unity

government, Monday.

Issuing a joint press statement after a meeting at Maoist headquarters in Perisdanda,

the parties have said, there is no alternative to a national unity government and a

consensus among all political parties to end the ongoing political deadlock, complete

the peace process successfully and promulgate a new constitution through the

Constituent Assembly (CA).

The statement reads, 'national sovereignty, federalism, republicanism, secularism,

democracy, social justice, peace and Constitution are our common agenda. And to

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promulgate the new constitution by May 28 and complete the peace process

successfully is today's most important task.'

The parties have accused the present government of totally failing in such tasks.

The other parties signing the press release are CPN (United), Nepal Sadbhawana

Party (NSP), Nepali Janata Dal, Rastriya Janamukti Party, Nepa Rastriya Party,

Sanghiya Loktantrik Manch, Chure Bhawar Rastriya Ekta Party and Dalit Janjati

Party.

Sources say, the Maoists have started efforts to garner support from various parties to

prepare for a vote-of-no confidence motion against the present government as a last

resort to change the government.

UCPN (Maoist) has 230 seats in the parliament, MJF has 32, and other fringe parties

present at the meeting have about 20 seats in the parliament. 301 votes at the

parliament are required to change the government. nepalnews.com

Bhattarai says there is no meaning in extending CA's term till current govt lasts

Unified CPN (Maoist) vice-chairman Dr. Baburam Bhattarai said that the Constituent

Assembly's (CA) term which expires on May 28 will not be extended till the

government makes way for a national government headed by them.

In response to questions by media-persons as to whether CA's term will be extended,

at the party headquarters in Koteshwor after the Maoist Standing Committee (SC)

meeting on Monday, he said there is no meaning in extending the term of the

Constituent Assembly when the government is not serious in regards to "constitution

and peace".

The remark from the senior Maoist leader and ideologue comes at a time when

political observers predict serious constitutional vacuum in the country in the event of

non-extension of CA's term. Ruling parties like Nepali Congress and CPN (UML) say

that it would be impossible to meet the May 28 deadline for promulgation of the

constitution and the term of CA needs to be extended.

Dr. Bhattarai said that till the current government lasts, there is no possibility of

promulgating the new constitution or bringing the peace process to its logical end on

time.

He also ruled out talks with the government, saying that Prime Minister Madhav

Kumar Nepal's call for dialogue to end the protracted political deadlock can only be

accepted if he resigns from his post to forge political consensus.

"Prime Minster Madhav Kumar Nepal is sticking to his chair against the wishes of the

people and he must resign if there is to be meaningful talks," Dr Bhattarai

said.Nepalnews.com

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No nixing OHCHR, chorus diplomats

Stating that the four-year-old peace process was still fragile, European and US

diplomats based in Kathmandu on Monday strongly urged the government not to

close the field offices of the Office of the High Commissioner for Human Rights

(OHCHR). They also urged the government to be flexible while negotiating with the

Maoists, who, they said, had offered a window of opportunity by withdrawing their

strike on Friday.

At the recommendation of its ruling ally, the Nepali Congress, the government is

planning to ask OHCHR to close its four field offices.

The diplomats also urged the government to continue the current mandate of the UN

body. In addition to regular monitoring of the human rights situation, its current

mandate allows OHCHR access to the Supreme Court, Legislative-Parliament and

prison archives. The current term of OHCHR expires on June 9.

At a policy briefing organised by Foreign Minister Sujata Koirala in her private

residence at Mandikatar on Monday morning, diplomats expressed serious

reservations over the government’s reported preparations to close down OHCHR-

Nepal’s four field offices in Nepalgunj, Biratnagar, Dhangadi and Janakpur and

curtail its mandate.

Envoys and heads of missions from Australia, Denmark, Finland, France, Germany,

Norway, Russia, Switzerland, the United Kingdom, and Delegation of the EU to

Nepal were present at the briefing. “At a time when the peace process is still fragile,

the envoys proposed that closing the UN rights body’s field offices would not be the

right decision,” US Ambassador Scott H. DeLisi told reporters after the briefing.

Responding to the envoys’ concerns, Koirala said, “It is our policy to address

domestic and stakeholders’ concerns.”

“We have urged the minister not to trim the offices or reduce the mandate of

OHCHR,” Danish ambassador Finn Thilsted said.

Jean Romicianu, Charge d’ Affaires at the French embassy, said they were trying their

best to facilitate consensus among the political parties to end the political stalemate.

Koirala told the diplomats that the government and her party Nepali Congress would

not have “any problem” working together with the Maoists if the latter gave up their

bid for “a parallel government.” She said the Maoists need to dismantle the

paramilitary structure of the Young Communist League and take “concrete steps” for

the integration of Maoist combatants so that ruling parties feel comfortable joining

hands with them.

http://www.ekantipur.com/the-kathmandu-post/2010/05/10/top-story/No-nixing-

OHCHR-chorus-diplomats/208114/

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Diplomats call for urgent steps from govt for consensus

Foreign diplomats have expressed dissatisfaction at the failure of the government to

take stronger initiative to resolve the current political crisis.

During a meeting with deputy prime minister and foreign minister Sujata Koirala at

latter's residence in Mandikhatar, Monday morning, ambassadors of the European

Union, United States and Australia urged the government to urgently take steps for

political consensus.

Koirala told reporters after the meeting that the diplomats expressed concern over the

growing differences among parties which could affect the peace process and

constitution writing.

The foreign diplomats based in Kathmandu have become active in last few weeks as

the political crisis deepens here.nepalnews.com

Anti-Dahal slogans enter parliament records

Some slogans chanted against UCPN (Maoist) Chairman Pushpa Kamal Dahal have

been recorded at the parliamentary meeting on Monday.

Standing Committee member of UCPN (Maoist) Amik Sherchan repeated the slogans

chanted by the peace assembly organized by the business community Friday, to

explain to the meeting what kind of indecent language was used.

While claiming that the peace assembly was not entirely intended for peace, rather it

was planned against the Maoist leadership, Sherchan said people at the assembly used

offensive language while sloganeering against the Maoist party chairman.

He repeated the three slogans used: Down with Prachanda [Dahal], Hang Prachanda,

Prachanda thief quit the country.

He argued that the peace assembly was a conspiracy hatched by the ruling parties

against the Maoist-called general strike.

Using of even a single indecent word against any leader, individual or institution is

taken seriously in a parliamentary system. Usually, when a parliamentarian uses any

insulting language against any other leader, the other members immediately object

and the speaker rules that the House correct such wording.

But on Monday the speaker did not take any action as no one objected to Sherchan´s

words. Many Maoist lawmakers, however, felt embarrassed. Many of them left the

meeting while Sherchan continued with his speech for around an hour. "I couldn´t

stay there any longer as it was so awkward," said a Maoist lawmaker outside the

parliament hall.

"His speech has created a very awkward record in parliament against his own party

chairman" UML lawmaker Agni Kharel told Republica.

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But Speaker Subas Nembang could not stop himself from ruling against Sherchan

when the latter accused him of failing to expedite the constitution-writing process. He

accused Nembang, who is also chairman of the Constituent Assembly (CA), of failing

to rise above being a UML leader. "It has been a long time since the CA meeting took

place. Why don´t you take initiative to call the CA meeting. You shouldn´t present

yourself as a UML leader in the CA," Sherchan said. Nembang then had to rule that

he "leave that context right there."

After his address, Sherchan announced a boycott of the meeting to protest the

government´s "brutally suppressing the Maoists" during the recent general strike

called by the party.

http://www.myrepublica.com/portal/index.php?action=news_details&news_id=18473