NAC BOEING GROUNDED Kathmandu, 4 July: A Boeing 757 of state airlines Nepal Airlines Corporation (NAC) has been grounded since Monday affecting 25 percent international flights. . Spare parts have to be brought from abroad to repair the aircraft. The airline has only two Boeings serving international flights The airline was operating only a skeletal schedule with the two aircraft as foreign carriers more foreign airlines begin flights and benefit from increased tourist arrivals. Malaysia’s AirAsia X began direct flights between Nepal and Malaysia breaking the monopoly of NAC on the sector. The main income source of NAC now is handling charge of foreign airlines at TIA. Nnnn CONSTRCTION OF UPPER MODI A HYDROPOWER PLANT BEGINS Kathmandu, 4 July: Construction of the 47MW Upper Modi A power plant has begun. The project is being jointly developed by Nepal Electricity Corporation (NEC) and South Korea’s Korea Water Resources Corporation (K-Water). The Korean firm has a majority 80 percent state in the company. nnnn THREE STAR PLAYERS JOIN FRIENDS CLUB Kathmandu, 4 July: Sagar Thapa Tuesday joined Friends Club for an undisclosed amount. Nirajan Khadka and Deepak Bhusal also joined in the Lalitpur-based A Division Club. Friends Club was 9th in the last Martyrs Memorial League tournament. Club President Ratna Sumsher Rana said the players contract fee was ‘between Rs 35,000 to Rs 40,000’, nnnn FORMER MAOIST FIGHTERS PREPARE FORWEDNESDAY’S INTEGRATION Kathmandu, 4 July: With the integration process beginning from Wednesday, former Maoist combatants have started gathering in the main cantonments to take part in the selection process to be carried out by the Nepal Army (NA), Republica reports. NA is selecting combatants aspiring for other ranks from the main seven cantonments and officers from the Bharatpur Barracks. “Even those who were not in the cantonments have to return to their respective cantonments for integration," said former fourth division vice commander Bashu Dev Ghimire about the preparations for integration. Similarly, first division commander Yam Bahadur Adhikari told Republica that the former combatants opting for integration have started returning to the main cantonments. NA Spokesperson Ramindra Chhetri told Republica that the army has formed selection teams and would be on the field from Wednesday. "The members of the recruitment board are reaching the cantonments tomorrow [Wednesday]," he said. There are altogether 3,123 former Maoist combatants waiting for integration into the national army. The army will create a separate directorate to accommodate the former Maoist combatants. While 35 percent of the directorate members will be ex-Maoist combatants, 63 percent of the members will be from the national army. The government is yet to decide the structure of the directorate. The army has decided to start integration after it was told that the government would determine the structure of the directorate as the integration progresses. NA seeks Rs 24b for next fiscal year The Ministry of Defense on Tuesday sought 24 billion rupees for the Nepal Army for the next fiscal year, some two billion more than the budget ceiling set by the finance ministry. The budget sought by the defense ministry does not include the budget for the proposed NA directorate. nnnn The ministry made the request during a meeting held at the prime minister´s office on Tuesday. Army Chief Chhatraman Singh Gurung was also present at the meeting. nnnn ________________________________________ FIVE RURAL DEVELOPMENT BANKS BEGIN MERGER PROCESS Kathmandu, 4 July: The Nepal Rastra Bank (NRB) has called on rural development banks seeking merger to come up with a joint proposal to formally commence the process, Republica reports. Currently, five rural development banks are operating in the country´s five development regions. They were established jointly by the government and the central bank with the objective of extending microfinance services to rural women so that they can gain access to unsecured loans to create self-employment opportunities. Over the years, these institutions have established 206 branch offices and 7,267 service centers throughout the country, while roping in over 228,000 clients. “But lately we have observed that creation of five different units to provide same service had raised operating cost without any improvement in service delivery,” NRB Spokesperson Bhaskar Mani Gyawali told Republica. “We hope the consolidation will create one strong unit that can work effectively and efficiently.” In this regard, the central bank has asked rural development banks to immediately hold special general meetings and seek approval for merger from respective shareholders. Although majority stake in most of these institutions were held by the government at the time of their establishment, it had started offloading its shares in these units over the years to include public and private sector in the ventures. As a result, the government currently holds an average of 13 percent stake in each of these units. “Despite the diversity in the structure of shareholders, we hope they won´t express divergent views on merger,” Dharma Raj Pandey, CEO of Paschimanchal Rural Development Bank, told Republica, informing most of the institutions have agreed to take consent of their shareholders by holding special general meetings by mid-July. Once this is done, due diligence audits of all rural development banks have to be conducted which will identify strengths and weaknesses of different institutions and stake each of the institution can hold in the consolidated unit, Gyawali said. Currently, the financial position of different rural development banks is not on par. For instance, Sudur-paschimanchal Rural Development Bank has a negative net worth of Rs 83.83 million. These five institutions have also accumulated huge chunk of non-performing loans, which topped 281.62 million in the first half of the current fiscal year, with Paschimanchal Rural Development Bank reporting the highest of Rs 113.3 million of such debt. Because of this situation, rural development banks, in a report submitted recently to Nepal Rastra Bank, had asked the government to write off bad loans and inject necessary capital to compensate the losses. Although any formal decision in this regard has not been made, Gyawali said “the government would definitely acknowledge the contribution made by these financial institutions to the society and extend necessary support”. nnnn ________________________________________