Perennial delay in land acquisition hits industrial areas

Kathmandu, June 3

The lengthy time taken in the land acquisition process for the new industrial areas in each province could hit investors’ sentiment as Nepal has already received investment commitment in those areas. The government had started the process of acquiring land in the name of Industrial District Management Ltd (IDML) in seven provinces about two years back. However, land acquisition process has not gathered pace despite the instruction to hasten the process from the prime minister.

As per its plan to develop industrial areas in each province, the government has started acquiring land in Damak and Gauradaha of Jhapa for the industrial areas in Province 1. So far, only 1,319bighas of land has been acquired out of the proposed 2,100 bighas.

The IDML has established its liaison office in Damak to expedite the land acquisition process, however, progress has been very slow, according Nanda Kishor Basnet, chairman and general manager of IDML. “We have to take consent from the Ministry of Agriculture, Land Management and Cooperatives and the Ministry of Law, Justice and Parliamentary Affairs at each step of the land acquisition process and this has been causing delays.”

Chinese investors have been expressing interest to develop industrial areas to set up industries here due to the geographical proximity with India, Bangladesh and Bhutan. However, IDML needs to acquire land as early as possible to invite the Chinese developers.

The industrial areas will be developed as per the BOOT (build, own, operate, transfer) model. Under the BOOT model the project will be handed over to the government after 30 years. The detailed project report (DPR) will be developed after the land acquisition.

The IDML has also signed a memorandum of understanding (MoU) with Phingan Trust of Shenzhen, China, which will provide financing to the Chinese investors to invest in the industrial parks as per the government of China’s policy to promote the Belt and Road Initiative also through the participation of the private sector, as per Bhoj Raj Binadi, spokesperson for IDML. “The Lhasa Industrial Development Zone will provide technical expertise as a counterpart developer as per the MoU.”

Likewise, land acquisition for the industrial areas in other provinces has not gathered momentum. The DPR of three industrial areas in two provinces is underway, namely, Mayurdhap (200bighas) in Makawanpur of Province 3 and Motipur (813bighas) of Rupandehi and Naubasta (338bighas) of Bankeof Province 5. After the completion of DPR, the IDML will seek the developer for the industrial areas through competitive bidding.

The IDML has been carrying out feasibility study of industrial areas in other provinces as well. It has identified 3,000bighas of land in Murtiha of Sarlahi district in Province 2 and 300bighas in Chyalingtar, Gorkha of Province 4. Similarly, feasibility study is underway to develop industrial areas on 1,148bighas of land in Laxmipur, Dang of Province 5; 1,000bighas in Surkhet of Province 6 and 900bighas in Daiji of Kanchanpur district of Province 7.
Currently, there are 11 industrial estates and one Special Economic Zone in operation in the country.