PRACHANDA, UML CHAIRMAN KHANAL MEET Kathmandu, 6 Oct. One day after he held discussions with NC President Sushil Koirala, Maoist Chairman Prachanda, has planned consultation with UML Chairman Jhalanath Khanal to break a four-month deadlock by mid-October. The meeting has been scheduled the day after opposition UML went on nation-wide protests demanding the ouster of the government of Baburam Bhattarai and its replacement by a national consensus government. Neither Maoists nor Bhattarai are willing to accede opposition demands. Prachanda is making fresh attempt to push an accord on urgings of President Dr. Raam Baran Yadav who is being pushed to step in to find a resolution to the deadlock. Parties have suggested presidential rule with imposition of an emergency. nnnn GOVT. VEHICLE USED BY FORMER MAOIST MINISTER VANDALIZED Kathmandu, 6 Oct.: UML-youth Friday smashed a government being used personally by former Maoist minister Hariraj Khewa at Chuwabot in Dhankuta Municipality Friday during nation-wide anti-government protests. The vehicle was smashed at Madanchowk Maoists demanded action against UML protesters. Khewa was using the vehicle even after request for its return. nnnn. WITHOUT HANGERS, INCECURITY IN AVIATION SECTOR INCREASES Kathmandu, 6 Oct.: Lack of confidence among the private airline operators to take risk and construct own hanger has added to insecurity in the air transportation, according to the airlines operators, The Himalayan Times reports. “There is a lack of confidence among the operators to invest more to maintain quality and safety of aircrafts,” said deputy director of Buddha Air Mangesh Thapa. “We have to maintain quality and safety for a long term business plan,” he said, adding that one needs to make a huge investment to construct an international standard hangar. “It has a lot of risk factor too.” There are 10 fix wing operators and five rotary wing operators in the domestic aviation industry. Buddha Air has acquired TIA land on lease at Rs 5.7 million per year to construct its hangar. It had invested a total of Rs 2 million to construct the closed hanger. After Buddha, another private operator Guna Airline is also preparing to construct its own international standard hangar. “We are planning to construct the hanger as we are planning to bring new aircraft,” said executive director of Guna Airlines Ghanashyam Acharya. “Hangar is a crucial factor to maintain safety and quality of aircraft but it depends on the business plan of a company whether to construct a hangar or not,” he added. A hangar is a closed structure to hold in protective storage. Hangars are used for protection from weather, protection from direct sunlight, maintenance, repair, manufacture, assembly and storage of aircraft on airfields. According to the civil aviation experts, without a hangar an aircraft can never be safe. “The airlines operators are, however, afraid to investment that has directly affected the safety of air transportation,” they said, adding that the domestic airline operators are using the hangars of other airline companies in case of emergencies and are not in a condition to construct their own hangars. “Aircrafts can go through open air maintenance,” Acharya said. CAAN plans to increase investment on infrastructure Civil Aviation Authority of Nepal (CAAN) is planning to invest Rs 1 billion to develop infrastructure of airports in hilly and remote areas. Speaking during a symposium on ‘Challenges in air side operation and management for safe, secure and effective flight at TIA’, director general of CAAN Tri Ratna Manandhar informed that CAAN will invest Rs 1 billion — the largest investment till date — for the improvement of infrastructure in the remote and hilly airport. “The air traffic has been increasing continuously but the infrastructure has not been upgraded accordingly,” he said, adding that in an interval of last 20 years, the airlines and air traffic has increased by 500 per cent but the physical infrastructure has not been upgraded to match growth rate of air traffic. Meanwhile, Minister for Culture, Tourism and Civil Aviation Post Bahadur Bogati assured of the construction of Pokhara Regional International Airport after solving some legal complications. Similarly, tourism secretary Yajna Prasad Gautam said that Tribhuwan International Airport needs to be upgraded. “It also needs improvement in air safety with joint efforts from operators, stakeholders and the government as the regulatory body alone will not be able to improve safety of aviation sector.” nnnn BAN ON NB INSURANCE LIFTED CONDIIONALLY Kathandu, 6 Oct.: The Insurance Board has lifted ban on entire business operation of NB Insurance on condition that the non-life insurer recoup around Rs 30 million it had misappropriated within the next three months, Republica reports,. The decision to allow the insurance company to resume business operation from Friday was taken by a meeting of board of directors of the Insurance Board held on Tuesday, according to a board member of the Insurance Board. “We took the decision despite the company´s failure to return back the amount as we know it has the ability to recover the cash. Our intention is not to see it remain closed for an extended period of time,” the source said. But he informed the decision was conditional. “If it fails to recover around Rs 30 million that it had embezzled within three months, we will take further action against the company,” he said. “This condition has been made clear to the company in a letter dispatched on Thursday.” NB Insurance has acknowledged receipt of the letter. “We received the letter Friday afternoon. We know the conditions and we will abide by it,” Bikrant Pandey, deputy general manger of NB Insurance, told Republica. He also informed that the company is all set to extend regular services to customers beginning Sunday. The Insurance Board had suspended all business operation of NB Insurance on July 31 on five different counts of misdeeds from extending credit to promoters to keeping shoddy records of financial transaction with reinsurance company. On another occasion, the insurance company had extended rental amount of Rs 59 million without taking permission of the regulator. This went against the law as insurers have to take the consent of the regulator prior to making payment in excess of Rs 2 million. This payment, the Insurance Board later found, was made by misappropriating cash lying in the ´earmarked fund´ - which is made up of amount parked in reserve fund, insurance fund, unexpired risk reserve and outstanding claim reserve. As at the end of fiscal year 2010/11, NB insurance had around Rs 140 million in the ´earmarked fund´. Although the law bars insurance companies from using any amount from this fund, the regulator detected flight of around Rs 70 million from the reserve. Of this amount, Rs 21.5 million was found to have deposited at Nepal Housing and Merchant Finance Limited, which was recently transferred to various commercial banks, and Rs 15.3 million were parked at call and current accounts of different finance companies. But a huge chunk of money - Rs 35.3 million - currently lies in World Merchant Banking and Finance Company. Since the amount is lying in a two-year fixed deposit account, the Hetauda-based finance company has denied to release it before its maturity. This instance of parking such a huge sum of money in a finance company also flouts the laws, as the insurance sector regulator does not allow insurers to park more than three percent of gross amount allocated for investment in one finance company. In case finance companies have not completed five years of operation, only one percent of the investment amount can be deposited. Insurance companies can, however, park money in different finance companies but the amount should not exceed 15 percent of gross amount allocated for investment. “Without recouping Rs 35.3 million from World Merchant, the insurance company can never replenish its earmarked fund,” a high-ranking official of the Insurance Board told Republica. “But since the finance company has denied to release the amount before its maturity, it will need to look for other avenues to raise the fund. And that too within the next three months.” Nnnn INDIAN RUPEE APPRECIATION IMPACTS NEPALL DIRECTLY Kathmandu, 6 Oct.: One tenth of the total export income and remittance inflow will be lost due to continuous dollar depreciation against rupee — below Rs 80 — which will be sooner than later if the trend continues, Dikshya Singh writes in The Himalayan Times.. The strengthening of Indian currency (INR) has gained momentum of late with active policy reforms by the Indian government and weaker dollar index against basket of currency. INR has taken Nepali currency (NPR) along on the joyride. Indian analysts are assured that INR will soon enough reach 50 for a dollar based on current forex trend. If INR breaches 50 then exchange rate for a dollar will be fixed at Rs 80. Nepal Rastra Bank has fixed Rs 82.39 as dollar exchange rate for tomorrow. “If dollar keeps going down like this, already shrinking export income from third countries will further decline,” said Uday Raj Pandey, President, Garment Association of Nepal. Garments are one of the largest export items to US and Europe. For export industries such as garment, carpet and pashmina, the price mismatch arising from exchange rate fluctuation between the time of order placement and order execution will hurt. “We take order three months prior to the production and dollar depreciation has skewed our estimation,” added Pandey. If both remittance and export income attain same growth rate this fiscal year then also depreciated dollars at Rs 80 will cancel out 10 per cent so that total remittance might be near Rs 450 billion and dollar earning export income might be about Rs 22.16 billion. However, the importers will benefit by the depreciation of dollar. Less money has to be paid for the imports than earlier. “Our expense on raw materials has gone down considerably due to cheaper dollars,” pointed out Pandey. Nepal’s total imports from third country amounted to Rs 162.2 billion in last fiscal year. “The effect of dollar depreciation will not be seen instantly as the Letter of Credit issued to importers by the banks will come into effect within 120 days,” informed Bhaskar Mani Gyanwali, Spokesperson for NRB. “With depreciated dollar we need more of it to pay for the imports from India,” he added. He also pointed out Nepal’s debt servicing to foreign countries and agencies will also be easier,” said economist Bishambhar Pyakurel. nnnn NEPAL ROAD INUNDATED BY INDIAN EMBANKMENT Kathmandu, 6Oct.: Transport service has come to a grinding halt along the Rajbiraj-Kunauli road, which has been completely under water since the last two days after an Indian embankment on Nepal-India border blocked the Khando River from flowing southward, Jitendra .Kumar Jha writes in Republica from Saptari . The locals say the road has been inundated as the embankment built in Dashgaja area -- No Man´s Land -- by the Indian government six months ago blocked the river. With the Tilathi-Rampur Malhaniya section of the Janakpur-Kunauli road submerged, some villages in the southern belt of Saptari district have been virtually cut off from the district headquarters. The locals of Tilathi, Rampur Malhaniya, Dalawa, Belhi and Sakarpura are unable to come to Rajbiraj. "We can´t go to the district headquarters," said Mishri Lal Mukhiya, a local resident of Sakarpura VDC. "No vehicles are there on the road." The locals have been forced to wade through water along the motor road. According to Tilathi-based Armed Police Force (APF) inspector Mahendra Hamal, a bridge in Tilathi VDC has also been covered with sand brought by the flood of Khando River. "Normal life has been badly affected," he said. "The Indian government has tampered with the natural flow of the river to protect its lands from getting inundated," said Dev Narayan Yadav, a resident of Tilathi VDC-5, adding, "If the Khando river is not allowed to flow in its natural course, many settlements in this area will be in danger." The locals say the flood in the Khando River, which swelled following rains in the mountains, has also devastated their crops and damaged fertile lands. According to Dineshwar Mishra, former Tilathi VDC chairman, the locals had already anticipated the possible dangers of the embankment in Dashgaja area. "We had protested against the construction of the embankment while it was being constructed," said Mishara. "After we protested, government officials from Nepal and India visited our village and promised to not construct the embankment until a new consensus is reached. But, India completed the construction of the embankment overnight in spite of our stiff opposition." The Indian people say they had no other option but to build the embankment to protect their lands. "Two years ago, the Khando River changed its course into our village and damaged a vast area of fertile land," said Wasim Ahmad, Kunauli Gram Panchayat Mukhiya of India. "Therefore, we exerted pressure on our government to build the embankment. We don´t intend to hurt the Nepali people." Nnnn MEDIA GOOGLE “The integration of former Maoist integration process has entered a concluding stage. The Nepal Army should always maintain an apolitical character.” (Army Chief Gen. Garud Shumshere Rana, The Himalayan Times, 6 Oct.) nnnn