Kathmandu, June 8

The two-day Korean Language Test (KLT) conducted by the Employment Permit System (EPS) in South Korea for Nepali job aspirants will begin from Saturday.

The EPS Korea Section at the Department of Foreign Employment (DoFE) informed that necessary groundwork to hold the KLT exam in a fair manner simultaneously in Kathmandu and Pokhara has been completed.

Altogether, 82,264 job aspirants are expected to appear for the Korean language proficiency exam this year. They had submitted the KLT online application at EPS Korea Section in April.

Uddhav Prasad Rijal, information officer at DoFE, said that 28 examination centres (16 in Kathmandu, eight in Lalitpur and four in Pokhara) have been fixed for the KLT examination.

On both days, the one-hour KLT examination will be taken in two shifts — 10:00am to 11:00am and 2:00pm to 3:00pm.

Meanwhile, the South Korean government, which has been taking Nepali workers on the basis of their KLT results, has mentioned that the job aspirants should from now on also possess required work skills.

This means that along with clearing the KLT, job aspirants should also have sound skills and work ability to get a chance to work in South Korea.

The South Korean government will be providing employment opportunities to 7,100 Nepali workers in 2019, of whom 4,800 will be employed in the production sector and the remaining workers in the agriculture sector.

The labour demand from South Korea stood at 10,200 in 2018 and 3,100 in 2017.

Of the total applicants for KLT this year, 39,640 (30,179 males and 9,461 females) have applied for jobs in the agriculture sector and 42,624 (39,208 males and 3,416 females) have applied for jobs in the production sector.

This is the ninth series of the KLT and those selected through the KLT will be eligible to apply for jobs in South Korea. The validity of KLT will be for two years, which means that those who pass KLT cannot apply for jobs in South Korea after two years.

The South Korean government has set basic monthly salary of 1,236,000 won (around $1,075) for Nepali workers.

Over 50,000 Nepali workers have received opportunities to work in South Korea under the EPS so far and thousands of them have already returned to Nepal after completing their 58-month job placement in the country, according to EPS Korea Section.

• The project will cover a length of 113 kilometres and comprise tunnels and bridges

Kathmandu, June 8

The pre-feasibility study for proposed Kathmandu-Raxaul railway began today.

The joint engineering team of Nepal’s Department of Railways (DoRW) and the consultant team of Indian Railways has begun the pre-feasibility study of the project.

“The engineering team comprises members from the technical team of Nepal and India and has started conducting the pre-feasibility study of the project from today,” said Prakash Bhakta Upadhyaya, spokesperson for DoRW.

According to Upadhyaya, in the first phase of the study, the team will make observations at the site where Himal
Cement Factory was located in Chobhar of Kathmandu. The technical team has initially proposed Chobhar to establish a railway station.

Meanwhile, the government has put on hold the process to establish a company for construction of the railway project as the Indian government has provided assurances that it will build the railway project through its own resources.

During Indian Prime Minister Narendra Modi’s visit to Nepal on May 11 and 12, both the countries had agreed on effective implementation of the bilateral initiatives in agriculture, railway linkages and inland waterways development.

The Indian prime minister had assured that the entire cost to construct the railway project from Kathmandu to Raxaul would be covered by the Indian government, including establishment of an office, pre-feasibility study, detailed feasibility study (DFS), detailed project report (DPR) and as well as construction.

As per Upadhyaya, the railway project will cover a total length of 113 kilometres and around 20 per cent of the railway line will comprise tunnels and bridges.

The report of the pre-feasibility study is expected to be submitted by August 31. After that, the detailed project report will be prepared, which is expected to be completed within 15 months if everything goes according to plan.

“The construction of the project will begin within two years,” he stated.

Construction of the Kathmandu-Raxaul railway project will be easier as compared to construction of the Kathmandu-Kyirong railway project, as the latter has to pass through mountainous terrain. The proposed route of the Kathmandu-Raxaul railway will start from Kathmandu and will traverse along the Bagmati River all the way to Nijgadh. It will then be extended through Birgunj to Raxaul.

A railway track connecting Birgunj to Raxaul already exists, but it is not being used to transport passengers. The railway line is presently being used only to transport cargoes from Kolkata to the dry port in Birgunj. The DoRW has planned to upgrade this section so that people can also travel through this section.

Kathmandu, June 8

The Supreme Court has asked the Investment Board Nepal (IBN) to put on hold its decision to seek Rs 100 million as performance guarantee from Kathmandu Monorail Company Ltd (KMCL) before signing a memorandum of understanding (MoU) to prepare detailed project report (DPR) of Kathmandu Monorail Project.

The apex court has scheduled the next hearing of the case on June 25 when both the parties will present their arguments. The court will then decide whether or not to continue the stay order, first issued on May 28 and continued on June 4.

The case was filed by KMCL Director Tara Devi Dhakal against the Office of the Prime Minister and Council of Ministers and IBN. The SC has also issued a show cause notice to the defendants.

On May 28, a single bench of Justice Bam Kumar Shrestha had issued interim order in the case, and scheduled hearing for June 4. On that day, a division bench of Justices Om Prakash Mishra and Kedar Prasad Chalise had decided to continue the stay order and asked both parties to present their arguments on June 7. However, the government side was not present to contest the case.

The much-hyped Kathmandu Monorail Project has been delayed following a spat between IBN and KMCL over a few provisions in the draft of the MoU of the project.

The draft MoU prepared by IBN has a provision that KMCL should deposit Rs 100 million as ‘performance guarantee’ before conducting the DPR of the project. KMCL has been saying that this provision will add financial burden on the company and there is no provision in the law stating that such a huge amount should be allocated as performance guarantee.

However, Uttam Bhakta Wagle, spokesperson for IBN, argued that performance guarantee is necessary to ensure timely completion of the DPR and the project itself. “We have submitted all the relevant documents to the SC and will accept the court’s decision.”

Talking to The Himalayan Times, DN Thapa, chairman of KMCL, also expressed reservations against another provision in the MoU that states that the IBN can simply purchase the DPR from KMCL and award the contract to build the project to another company. “This provision gives IBN full power to cancel the contract with us, even if our performance is good,” he claimed.

In December 2016, KMCL had inked a joint venture agreement with Powertek Sdn Bhd of Malaysia to construct a monorail in Kathmandu covering the Valley’s Ring Road. KMCL will have 70 per cent stake and the Malaysian company will have 30 per cent stake in the project.

According to Thapa, feasibility study of the project showed that monorail construction along the Ring Road will cost Rs two billion to Rs three billion per kilometre. The project, which envisions constructing the monorail at a height of above 14 feet from ground level, will be able to transport up to 150,000 passengers a day.

At a time when IBN and KMCL have been at odds about the DPR for the monorail project, the Kathmandu Metropolitan City (KMC) and China Railway Construction Corporation Ltd (CRCCL) — a state-owned construction company of China — inked an agreement to conduct the feasibility study of the same project on May 26.

“We haven’t received any information regarding the agreement between the KMC and CRCCL,” said Wagle.

Kathmandu, June 8

Public transportation commuters are likely to soon bear the brunt of continuous rise in fuel price, especially diesel, as the government is preparing to adjust new public transportation fare with the possibility of it jacking up the cost.

As it has been over two years since the public transportation fare was reviewed and its determinants like fuel and other components (vehicle spare parts and workers’ wages) have gone up over the period, the Department of Transport Management (DoTM) — the transportation sector regulatory body — is gearing up to adjust the new public transportation fare.

The government’s mechanism gives 35 per cent weightage to fuel price and 65 per cent weightage to the price of other components while reviewing public transportation fare.

The government had last reviewed public transportation fare on February 7, 2016. At the time, petrol and diesel used to cost Rs 99 per litre and Rs 75 per litre, respectively. Since then, petrol and diesel have become dearer by Rs 14 per litre and Rs 20 per litre, respectively. Following continuous rise in global crude oil price, petrol and diesel witnessed a price rise by 9.7 per cent and 12 per cent, respectively, through five rate revisions in the last three months (from April 2 to June 2) to their existing prices.

As fuel price has a higher weightage when determining the public transportation fare, constant rise in price of petrol and diesel is certain to affect the commuters.

“Fuel price has surged notably since the last revision in the public transportation fare while other components also have become dearer. Due to the change in the price of all the determinants, the public transportation fare will automatically be adjusted,” said Prem Kumar Rai, acting director general of DoTM.

DoTM has been studying the inflation rate of every component and will soon adjust public transportation fare if necessary, informed Rai.

While transporters are constantly pressurising the government to increase the public transportation fare citing the surge in fuel price, consumer rights activists are questioning the ‘rocket and feather’ policy of the government in adjusting both fuel price and the public transportation fare, meaning that fuel price and public transportation fare in Nepal rise like a rocket and fall like a feather.

“Fuel price cut in the domestic market was sporadic a year back when global fuel price was on a constant decline. But now the global fuel price is rising slowly and the government here is increasing petro prices every fortnight,” states Madhav Timalsina, president of Consumers’ Right Investigation Forum (CRIF).

In the name of implementing the auto-pricing mechanism in fuel price, the government has been increasing fuel price frequently though increasing fuel price will not only raise transportation cost but will also affect the price of all commodities, including daily consumables, which are directly linked to the transportation cost in the country.

Though the recent increment in fuel price could be controlled by mobilising the price stabilisation fund, which has collected almost Rs five billion from fuel consumers and is meant to control the fuel price fluctuation, the government has not made any effort to utilise it. The government has come under severe criticism for keeping the fund idle and making fuel price dearer.

A few days back, Nara Bahadur Thapa, executive director at the Research Department of Nepal Rastra Bank, had told The Himalayan Times that constant rise in fuel price will not only affect livelihoods of people but also the country’s economy.

There is no sign of credit rates coming down… banks are becoming richer, but businesses are suffering

• Shekhar Golchha, Senior vice-president, FNCCI

Kathmandu, June 8

It’s the second week of June, the time of the year when government spending starts gathering pace, raising deposit level at banks. This is also the time of the year when banks put the brakes on lending, as books must be closed in mid-July when the fiscal year ends. This combination of higher deposit inflow and low credit disbursement generally exerts downward pressure on lending rates.

This year too deposit stock has gone up and credit growth has slowed. Yet sky-high lending rates have not come down, disappointing borrowers, especially businesses.

In about one-month period till June 1, commercial banks collected Rs 62 billion in fresh deposit and disbursed Rs 50 billion in loans, shows the latest report of Nepal Bankers’ Association.

Deposit raised in the one-month period accounted for 25 per cent of the deposit collected by banks in the 10-and-a-half-month period since mid-July when the fiscal year began. This shows deposit collection has lately gathered pace. On the other hand, loans released in the one-month period accounted for 15.5 per cent of the total credit disbursement since mid-July. This means loans are not being issued as rapidly as in the previous months when credit disbursement had surpassed deposit collection.

The combination of higher deposit flow and lower credit disbursement, however, has not reduced lending rates. “And there is no sign of credit rates coming down,” said Shekhar Golchha, senior vice-president of the Federation of Nepalese Chambers of Commerce and Industry, the largest private sector umbrella body.

Commercial banks are charging interest as high as 24.7 per cent on loans, with Century Commercial Bank topping the list. Close on the heels are Mega Bank (22 per cent) and Nepal Bangladesh Bank (21.4 per cent). The maximum lending rate of nine other banks exceeds 18 per cent, an analysis of lending rates published on websites of banks shows.

“Can the economy afford such high-cost fund for rapid and sustained growth as envisaged by the government?” wonders Golchha, a leading industrialist.

Enterprises have long been complaining about high lending rates, which, they say, have inflated debt servicing cost. The businesses cannot transfer all of the additional cost to consumers, as they must keep prices competitive to gain an edge. This is squeezing their profits.

“So, banks are becoming richer, but businesses are suffering,” said Golchha, pointing to return on equities of Nepali banks, which stood as high as 39 per cent in the third quarter of this fiscal. “This is one of the highest in the world,” he added.

A number of bankers that THT talked to said lending rates were high because of ‘soaring credit demand’.

“One of the reasons for this is expansion in the base of borrowers,” said Himalayan Bank CEO Ashoke Rana. “In the past, many small businesses used to bank with smaller financial institutions. Today, many of them are our clients.”

But entrepreneurs such as Golchha cite ‘protection provided to banks’ as the main reason for runaway lending rates. “Look at the policy on interest spread, which allows banks to set lending rates by adding a premium of five percentage points to deposit rates,” said Golchha. “Also, nobody reminds banks to reduce lending rates even when it’s time to.”

Does the private sector think it has become the victim of regulatory capture — the tendency of regulators to act in the interest of businesses that they should be regulating? It’s not clear. But Golchha said, “The state must ensure equality of opportunity and healthy competition. Otherwise, businesses cannot survive.”

NRB Spokesperson Narayan Prasad Paudel said discussions were underway with representatives of the private sector and commercial banks in the run-up to the formulation of the new Monetary Policy. “I can’t say what the policy will include, but we are closely monitoring developments in the banking sector,” he said.

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