NC OBSERVING NATIONAL RECONCCILIATION DAY FRIDAY

Kathmandu, 31 Dec.: NC and fraternal organizations are observing Friday as national reconciliation day nation-wide Friday.
President Sushil Koirala garlanded a statute of BP Koirala in Morang Friday to launch a three-month national awareness campaign as well.
Sushil is in Biratnagar accompanied by other top party leaders, including Vice-president Ram Chandra Paudel.
Sher Bahadur Deuba is in Bharatpur, Chitwan, to observe the day.
Other central leaders have also been deputed to districts to address public meetings.
National reconciliation day marks the return home of 34 years ago of self-exiled NC leaders BP Koirala and Ganesh Man Singh after Prime Minister Indira Gandhi started a crackdown on exiled NC leaders in India.
The party abandoned armed conflict against the panchayat from bases in India started direct talks for restoration of banned political parties with King Birendra.
The party will push durable peace, promulgation of a democratic constitution and strengthening patriotism.
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HEAVY SNOWFALL DISRUPTS LIFE IN MUGU

Kathmandu, 31 Dec.: Heavy snowfall accompanied by rain overnight has disrupted normal life in Mugu district of Rara lake fame in the far-West.
People in villages have been restricted to homes with movement restricted.
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NEPALGUNJ SHUTDOWN

Kathmandu, 31 Dec.: Traders shutdown Nepalgunj in the far-West Friday.
They were protesting injuries of four persons in a bomb blast triggered by a rebel group in the terai.
Three customers and a hardware store owner were injured.
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INDIA’S NEW POLICY FREE FAIR ELECTION BY DISARMING MAOISTS

By Bhola B Rana

Kathmandu, 31 Dec.: India will now push ‘free and fair polls’ parliamentary polls by disarming Maoists after its fingers were burnt by pushing constituent assembly (CA) elections in April 2008 while the former rebels were still armed.
New Delhi pushed such election swept by Maoists surprising parties and world capitals.
India and major western capitals pushed Prime Minister Girija Prasad Koirala to conduct CA polls; Koirala abandoned a party call for disbandment of YCL, return of seized assets disarmament of Maoists to conduct the polls.
“Top billing will be given to Nepal and Bangladesh, not Pakistan.
“With a new ambassador Jayant Prasad ready to drive Indian policy in Kathmandu, India will try to push for ‘free and fair’ elections in Nepal- where the Maoists contest elections after disarming, so that nobody has an unfair advantage. That has to be the crux of the political deal in Kathmandu, but it has to be done by Nepalese themselves.
“But the Indian message remains the same. The Maoists have to disarm following which there can be a political understanding,’ Times of India which reflects official thinking in New Delhi said I a report this week.
The newspaper said Foreign Minister SM Krishna will be visiting Nepal soon as Foreign Secretary Nirupama Rao arrives early 2011to lay the groundwork of the.
Meanwhile, India is resuming its ‘seminar diplomacy’ to discuss Nepal in India as the peace process and constitution drafting have hit roadblocks.
Top political party leaders, including Maoist Vice-chairman Dr Baburam Bhattarai, are attending a two-day seminar in the Indian capital from 6 January on “Nepal’s present developments and outlet” sponsored Bibekandananda International Foundation.
Indian Foreign Minister Krishna will lead the Indian team; Deputy Prime Minister Sujata Koirala is also attending the seminar.
India has in the past assembled Nepali politicians and leaders of society to openly discuss Nepal abroad during crisis periods.
Nepalis shamelessly discuss national issues abroad in the presence of foreigners.
Leaders will not only air views in the seminar but also meet top Indian leaders to discuss Nepali issues with them.
NC General Secretary Prakash Man Singh is representing the party.
UML and other party leaders are also attending.
Firm and open Maoist critic retired Army Chief Gen. Rukmangud Katawal is a seminar invitee.
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ANOTHER COMMERCIAL BANK

Kathmandu, 31 Dec.: In 2011, Nepalis will find yet another new commercial bank -- Century Bank -- wooing them. This might be good news, but the Nepali financial sector will also be looking at a slew of problems it has never encountered before, Milan Mani Sharma writes in Republica.

Mainly burst of asset bubble - an evil that the banks and financial institutions (BFIs) themselves created over the past half decade of low interest regime - will deal its first lethal blow to the financial institutions. Liquidity crunch will exacerbate the problem for banks, eating away their profitability and bloating non-banking assets.

Banks that managed to win Rs 620.60 billion in deposits on July 30, 2010 are reporting that their deposits still hover at Rs 620 billion at December end; meaning they have failed to lure the money from the market despite jacking up savings rate by at least 2 percentage point during the period.

Nepal Rastra Bank (NRB) says money pumped out into the market is taking much longer than the anticipated period of some three weeks to come back into the system. Even worse, a significant chunk of those withdrawals are never finding way back to the banks.

People continue to exhibit low confidence in the banking system -- thanks largely to the central bank’s weak money management that prevented people from getting hold of their own savings at their time of need before Dashain last year. Political instability; doubt over timely conclusion of the peace process and constitution drafting; and the overall confusion over the future State structure and economic policy are anticipated to drive away high-end savers. This will leave banks liquidity situation as vulnerable as ever in 2011.


In these circumstances, banks will find executing the two major NRB-pushed overhauls -- limiting real estate exposure to 10 percent from the existing 20 percent and doubling investment in productive sectors from the existing 10 percent -- a tough nut to crack.

Latest trend further reveals that the market has fast become interest sensitive. Development banks and finance companies, which are offering as much as a 3 percentage point higher returns than ‘Category A’ banks, have already taken away some Rs 4 billion of the commercial banks’ deposits over the last one month.

This will clearly mount pressure on the bank management to provide higher returns, ending the current ‘agreed’ cap of 12 percent. 2011, hence, will be heydays for depositors, but difficult for borrowers.

Mainly the country’s productive sectors, which reel under lack of innovation and competitiveness, are not expected to demand substantial credit. Fiscal and monetary policy, on the other hand, will continue to recoil consumption, forcing personal financing business to shrink.

Initial reports have made clear: demand for home loans -- one of the major retail business -- is down and will remain low in 2011, thanks to the realty market downturn and high interest rates, which is soon expected to touch 18 percent.

Auto loans and hire purchase too will drop further as the recent duty hike, which sent vehicle prices up substantially, and the rise in the interest rate to 17 percent, is already driving borrowers away.

This will force banks to revise their high growth strategy, which will be a correction of a sort from the ‘unnatural’ trend of the past. And the bursting of the asset bubble will give the industry quite a jolt early in 2011.

With realty slowdown and land prices sliding, more borrowers are likely to default on their loan repayments. This will expose over Rs 40 billion of banks and financial institutions loans in real estate (a great majority of which is suspected to be of the sub-prime kind) to grave risk.

This will mainly hit some half a dozen banks, over 20 finance companies and half a dozen development banks that have high exposure to real estate -- much above NRB’s prescription of 10 percent.

The cracks will mainly surface from finance companies, which are poorly monitored and supervised, and extend to other players, sending non-performing assets and non-banking assets soaring. Many will find their profitability seriously jeopardized, while some will turn sick.

These unprecedented challenges facing the financial sector clearly demands chief executives, board members and top managers to act more creatively and proactively. But the reality is -- rapid changes in policy, market dynamics and deepening problems have largely shattered CEOs confidence of late. NRB and the Ministry of Finance should take note of this fact while managing the sector in the New Year.

Good thing though, all these challenges will force BFIs management and promoters to go for merger and acquisition to consolidate their positions.

Financial sector reforms are also expected to get clear direction in 2011, although the government’s plan to ask Nepal Bank Limited and Rastriya Banijya Bank to sell their non-banking assets at this juncture to recapitalize them does not appear to be a prudent move.

In 2011, financial inclusion and people’s access to formal banking services too is anticipated to improve - thanks to central bank’s policy and incentives to lure BFIs to rural areas.
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TRADE, COMMERCE, ECONOMY

NT PROMOTER OF TRISHULI THREE- B

Kathmandu, 31 Dec.: Nepal Telecom (NT) will be a promoter of Trishuli Three- B, Nagarik reports.
NT insisted it wouldn’t invest in Upper Tamakoshi without promoter allocation of promoter shares in Trishuli Three-B.
A warning was issued Tuesday by NT in talks with Nepal Electricity Authority (NEA)
NEA then accepted NT proposal.
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NEW MANPOWER COMPANIES TO SEND WORKERS TO JAPAN

Kathmandu, 31 Dec.: Government has decided to open new manpower company to sent workers through Japan International Training Corporation (JITCO) to Japan, Nagarik reports.
The ministry of labour and transport management amended a directive top make the new arrangement.
Government gave permission one year ago to 171 manpower companies to send trainee workers to Japan.
There was dissatisfaction JITCO sent too many workers to Japan through manpower companies.
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SPORTS

AFC GROUP D MATCHES IN NEPAL

Kathmandu, 31 Dec.: Asian Football Confederation (AFC) endorsed Nepal’s proposal to host group stage matches of the AFC Challenge Cup 2012, Republica reports
AFC recently endorsed the All Nepal Football Association (ANFA) proposal to hosts Group D matches of the tournament.
Nepal are slated in the group along with North Korea, Sri Lanka. Playoff winners between Bhutan and Afghanistan will join the group.
..Group D matches will beheld at Dashrath Stadium and Armed Police Force Headquarters Ground in Kathmandu from March 21 to 25.
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MEDIA GOOGLE

“I’m not the kind of leader to be a card of a party. It’s essential for Maoists to understand this.”

(Sher Bahadur Deuba, Nagarik, 31 Dec.)

“The CPA has guaranteed scrapping of all the accusations, claims, petitions and pending political cases against the peoples of both the parties and immediate release of prisoners. Reviving the cases of those days is not only immoral but also unconstitutional.”

(Maoist Secretary CP Gajurel, The Himalayan Times, 31 Dec.)
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FORMER KING IN SHIBAPURI, PARAS IN SINGAPORE

Kathmandu, 31 Dec.: Former King Gyanendra is in Shibapuri; former Crown Prince Paras is in Singapore, Naya Patika reports.
The 40th birthday of Paras was celebrated in Nirmal Niwas Thursday.
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MAOISTS WRITE TO UN TO EXTEND UNMIN TENURE

Kathmandu, 31 Dec.: Maoists have sent a letter to United Nations to extend the tenure of UNMIN which ends 15 January 2011, Kantipur reports.
Chairman Prachanda has asked in the letter the tenure be extended until 27 May 2011.
The letter has been delivered to UNMIN Chief Karin Landgren.
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METRO GAS FROM 2 JAN.





Kathmandu, 31 Dec.: - After a long wait, the city consumers will finally have the Metro Gas, a product of the Salt Trading Corporation (STC), in their kitchens from Sunday, 2 January 2011, Laxman Kafle writes in The Rising Nepal.
Pankaj Joshi, Division Chief of the Trade Department of the STC, said that after the trial production of the gas completed, STC was all set to supply the production from Sunday.
Till date only the private companies were supplying the cooking gas in Nepal.
The production and distribution of liquid petroleum gas (LPG) by a government owned corporation is expected to provide some relief to the consumers.
The corporation claimed that it would help rupture the monopolised market of the private sector and help smooth supply of the gas in the market.
He said that the consumers using the STC gas would have gas cylinders weighing actual quantity and completely free from any risk.
"They will be auto-filled cylinders," Joshi said.
Talking to The Rising Nepal, Joshi informed that the industry would supply around 12,000 cylinders from Sunday in the initial phase. He said that the industries would supply gas in Kathmandu Valley and Dhading district first.
"Later, we will supply the gas in other parts of the country," he said.
According to him, price of a gas-filled cylinder would cost Rs. 3,725.
STC planned to increase the number of cylinders to 80,000 in the future.
The STC has recruited 82 dealers for the distribution of gas in the Kathmandu valley in the first phase.
"There will be about 300 dealers in the valley after we start supplying gas in a full-fledged manner," he said.
Nepal Oil Corporation (NOC) had been supplying around 108 metric tons of gas a month to the STC which was not sufficient; he said adding that NOC committed to increase the quota as per the increasing demand of gas in the days to come.
Joshi said that they asked the NOC to increase its quota to 324 tons monthly for smooth supply of its gas.
He assured that the STC branded gas had followed safety norms as per the NOC’s instruction.
He informed that Nepal Bureau of Standard and Metrology (NBSM) provided the standard certificate to the company after checking standard of gas cylinder and monitoring the company.
Joshi said that the STC gas would help control the monopoly of private gas companies which used to resort to strike and other means to create artificial shortage of gas and increase the price.
The company has set up its factory in Dhading district.
The new gas company would be formally inaugurated on Friday.
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FURTHER DETAILS OF PM NEPAL, ERIC SOLHEIM TELEPHONE CONVERSATION
Kathmandu, 31 Dec.: It’s like regaling someone with tales of woe, The Himalayan Times writes.

When Norwegian Minister for Environment and International Development Eric Solheim today spoke to Prime Minister Madhav Kumar Nepal over phone, Nepal told him ‘the peace process won’t be completed even in 40 years if things keep on moving ahead the way they are now’.

Solheim rang PM Nepal up this afternoon to exchange New Year greetings and take stock of Nepal’s peace process. Solheim reportedly asked the prime minister why the peace process was stalled even as the parties had struck a deal to conclude the peace process before the departure of United Nations Mission in Nepal. The UN body is all set to leave Nepal on January 15.

“Going by the attitude of the UCPN-Maoist, it seems we won’t be able complete the peace process even in the next 40 years,” PM Nepal’s press adviser Bishnu Rijal quoted him as telling the Norwegian minister. Nepal reportedly shifted all the blame for stalled peace process on the Maoists.

“The UCPN-M has breached all the accords we had reached in the past. The government is fully committed to concluding the peace process at the earliest but the Maoists are not supportive enough,” PM Nepal told Solheim.

During the half-hour conversation, PM Nepal also told the Norwegian minister that the UCPN-M must transform into a civilian party to bail the country out of political stalemate and commit to concluding the peace and constitution-drafting processes.

With Nepal’s response, a bemused Solheim reportedly again asked him when and how the peace process would be completed. Solheim, nonetheless, reiterated that Norway will keep on providing continued support to Nepal to conclude the peace process and accomplish the task of constitution drafting.
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POLITICIANS MISUSE DEVELOPMENT FUNDS
POST REPORT-
Kathmandu, 31 Dec.:Taking advantage of absence of elected people’s representatives in local bodies, political parties have been accused of misusing development budget in various districts of the Mid-Western Region, The Kathmandu Post reports from Nepalgunj. .

Local parties forming consumer committees under their representation are gobbling up development budget, said a government officer requesting anonymity. “The UCPN (Maoist), the Nepali Congress and the CPN-UML are on the top list of bringing development projects in their favour.”

The three parties selling three plots belonging to Bhalung Municipality Development Committee at Rs. 1.5 million and distributing among them last year is a case in point. However, they returned the money later after widespread pressure from locals.

“The local parties form committees and gobble up development budget be it small or big project,” said Mahesh Rijal, former chairman of Lalmatiya, an NGO.

Another source said members of all-party consumer committees formed by the three parties divided Rs. 3.2 million out of Rs. 7.4 millions allocated by District Development Committee, Banke, to gravel 12-kilometre Hapure-Ratamata road.

The committees were chaired by Om Bahadur Khadka of Congress, Ganga Ram Raskoti of the Maoists and Tek Bahadur Oli of UML.

“They divided money among each other ranging from Rs. 200,000 to Rs. 50,000,” said a committee member preferring anonymity.

It is said that parties have also taken ahold of Chaurajahari drinking project worth around Rs. 20 million and Rs. 10 million Uba-Thabang road project in Rolpa district.

Likewise, the parties have been accusing of dividing construction of 30 buildings, 75 toilets and repair of 34 schools worth Rs. 50.1 million among them in Achham district.

Jaigad-Nandegada, Jaigagad-Majhathana and Malgansen-Baligaun roads have been constructed at Rs. 10 million under the initiation of parties. However, two of them have already been damaged.

In Baitadi, leaders have been charged of distributing even water pipes among them and selling them in market.

“There is a huge misappropriation of development budget by parties,” said a CPN-ML local leader.
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GOVT. PARTIALLY PRIVATIZING NT

Kathmandu, 31 Dec.: The government is mulling divesting 26-30 percent of its stake in Nepal Telecom to a strategic partner. The Privatisation Committee of the Ministry of Finance (MoF) is now working to get political consensus to make NT’s divestment process smooth, transparent and non-controversial, Mukul Humagain writes in The Kathmandu Post.

Lawmaker Hari Rokka, who heads the Privatisation Study and Consultation Sub-Committee of the Privatisation Committee, said the committee was planning to convene a meeting with political parties in this regard in the next seven to 10 days.

“Divestment of shares of large public enterprises (PE) like NT is a sensitive issue,” said Rokka. “Hence, it requires broad political consensus.” NT’s divestment issue will be discussed at the parliamentary Economic and Labour Relation Committee, added Rokka.

The process of privatisation of the state-owned telecom giant has intensified from last May with the formation of the sub-committee headed by Rokka. Since then, three separate studies have been carried out regarding the divestment of NT -- one by the Ministry of Information and Communications and the other two by the Ministry of Finance. “A technical committee headed by Suresh Pradhan, formed to outline the condition of contracts and bid documents has recently presented its initial report,” said Tanka Mani Sharma, joint secretary at the MoF.

According to Sharma, once there is political consensus over the NT divestment, the MoF will seek assistance from international divestment experts to finalise the bid documents and condition of contracts. “The idea is to make the whole process transparent and have a single strategic partner,” said Sharma.

With increasing competition in the telecom sector, there has been growing demand of late to find strategic partners of NT. Lawmaker Rokka said that divestment of NT makes better sense given the aggressive expansion of private telecom operators. With private operator Ncell expanding its operations aggressively, there is growing concern whether NT, till now the best performing PE, would go the way of Nepal Airlines Corporation and Nepal Oil Corporation.

NT itself, which has been contributing Rs 10 billion to the national coffers annually, is keen to have a strategic partner. As a state-owned telecom utility, it has to adhere to government rules and regulations when implementing new projects. This, according to top NT officials, makes the whole process lengthy and cumbersome in comparison to private telecom companies.

Interestingly, the report of the Commission to Review Government Budget Management and Expenditure System, headed by Maoist lawmaker Narayan Dahal, has, however, suggested that NT should be given more autonomy so as to make it more competitive instead of divesting its shares. “Shares of Nepal Telecom should be floated among the people,” it said.

If NT’s divestment is done as proposed, the government’s stake would be reduced to 62 percent from the existing 92 percent. The remaining 8 percent has already been divested to the general public.

The government has been able to speed up divestment of a few PEs, namely Small Farmers Development Bank and Agricultural Development Bank Limited (ADBL). While Small Farmers Development Bank’s shares have already been sold to small farmers cooperatives, the cabinet has already given approval to bring a strategic partner in ADBL. “ADBL’s 30 percent stake will be sold to strategic partners,” said Sharma.

The Asian Development Bank has provided financial support to hire international consultants to prepare tender documents to call for bids from potential strategic partners.

The government will fix the criteria for private partners as per the consultant’s report.
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