MACHINDRA PLAYS APF IN FOOTBALL LEAGUE CHAMPIONSHIP Kathmandu, 4 Dec.; Machindra Club plays Armed Police Force (APF) in Tuesday’s Martyrs Memorial A Division League Championship at Dashrath Rangashala. Nepal Police Club plays Sarashwati Club in the second match.. Nnnn VULTURES EXPECTED TO DRAW TOURISTS Kathmandu, 4 Dec : Tourism entrepreneurs and concerned authorities in Ghachowk VDC of Kaski district have come together to develop Pokhara city as a popular destination for vulture watching, Manoj Adhikari writes in Republica from Pokhara. According to restaurant entrepreneurs, Ghachok, which has already gained much popularity among vulture watchers, can turn into a popular tourist hub if entrepreneurs and authorities work together. Around two years ago, with the assistance of locals, Vulture Conservation and Management Committee had opened vulture restaurants in Ghachowk, which enabled the visitors to view endangered vultures in their natural habitat. “If we can attract more tourists for rare views of vultures, tourism in this area will certainly peak in a very short period of time,” said a local entrepreneur. Currently there are six vulture viewing restaurants operating in Ghachowk. Basanta Dawadi, a local involved in tourism business, shared that establishing home stay facilities at local level can also increase tourism in the area. “Promoting home stay culture in the area can give a boost to the campaign,” said Dawadi. As a proof of popularity of vulture viewing activities, Rabilal Pokharel, the coordinator of Ghachowk Vulture Conservation and Management Committee, shared that the committee has encouraged adding of extra vulture viewing compartments in the restaurants that are already operating in Ghachowk. “Whole village will benefit if tourist inflow increases. Once tourists become familiar with the vultures here, this area will turn into an impressive and welcoming tourist destination,” said Pokharel. Promising full support to the effort, Surya Bahadur Bhujel, chairman of the Pokhara Tourist Council (PTC), said, “This initiative has my full support in any form,” said Bhujel. However, cost of visiting Ghachowk is a major deterrent for tourists. The royalty imposed by Annapurna Conservation Area Project (ACAP) and Trekking Agencies´ Associations (TAN) adds to the overall expenses, forcing many tourists to have a second thought about visiting the area. “If you add the royalty amounts for ACAP and TAN and the transportation cost, total expenses of visiting vulture restaurants can reach up to Rs 5,000 per tourist. This has turned out to be a major hindrance for many tourists,” said Bhujel. Senior Conservationist with ACAP Nar Bahadur Aamghai acknowledged that the royalty was indeed high. “But, when both tourism entrepreneurs of Pokhara city and the locals are to benefit from this, we are always ready to help,” said Aamghai. The vulture viewing restaurants in Ghachowk lies around 11 km north of Pokhara city. “In order to feed vultures, we have been rearing aged domestic animals near the restaurant,” said Pokharel. Pokharel informed that the number of vultures have increased in the area with the rise in the number of the restaurants. Nnnn BANKS FAIL TO RAISE PROFITABILITY Kathmandu, 4 Dec.: Commercial banks have so far been impressing investors by churning out net profits almost every quarter. But how efficiently are they deploying shareholders´ equity to generate returns?, Rupak D. Sharma writes in Republica. A look at the balance sheets of last several quarters shows that return on shareholder equity, which measures profitability, has remained almost stagnant over the last one year and has fallen drastically compared with that of three years ago. In the first quarter of the current fiscal year, the average return on equity, or RoE, of 32 commercial banks stood at 17 percent, meaning for every Rs 100 of investors fund a yield of Rs 17 was made. In the fourth quarter of last fiscal year, the average RoE hovered at around the same level. But in the first quarter three years ago, such return stood at 34 percent. This shows banks were utilizing shareholders equity -- which consists of paid-up capital and earnings or profits retained by institutions -- more efficiently three years ago than at present. This also shows despite posting net profits every passing quarter, banking institutions have not been able to raise the level of profitability. One of the reasons behind shrinking profitability, in terms of RoE, is growing capital base and expansion of reserve amount, Kishore Maharjan, CEO of Civil Bank, told Republica. In the last three years alone, the number of commercial banks has gone up to 32 from 26. Along with it, the paid-up capital base of category ´A´ financial institutions has also swollen from Rs 41.83 billion in mid-October 2009 to Rs 71.58 billion by mid-October 2012. In the same period, reserve and surplus amount also surged from a negative of Rs 5.62 billion to Rs 19.95 billion. But as the capital and retained earnings of commercial banks rose, profits could not rise to the same level, which eroded return on equity of banks, Maharjan said. If the ground situation remains the same, banks´ profitability will further deteriorate this year as the central bank has recently barred banks from distributing cash dividend if they do not hold capital adequacy ratio of 11 percent, as against 10 percent for normal operation. This means banks won´t be able to extend cash to their shareholders despite posting net profits if they do not have a capital cushion of an extra one percentage point. And this will prevent many from keeping their capital-cum-reserve at super thin level. One of the ways most of the banks post higher return on equity is by keeping shareholder equity at a minimum level. In other words, banks with little paid-up capital and retained earnings are more likely to post higher return on equity. This is why some of the commercial banks are waiting for Nepal Rastra Bank´s deadline of mid-July 2013 to expire to raise their paid-up capital to Rs 2 billion despite having enough funds in reserve. Many banks in the US and Europe also followed similar practice prior to the 2008 crisis, until chunk of loans turned bad and ate away the little equity that they had. An example of this is the Royal Bank of Scotland, the largest British bank at that time, which was generating RoE of around 30 percent from 2000 to 2007. The state later had to bail it out and the bank is now more than 50 percent owned by the British government. Prior to the crisis many Western banks also resorted to borrowing, a component which is not factored in while calculating RoE. Balance sheets show, Nepali banks have made improvement in this regard as they have reduced their borrowing from Rs 34.37 billion in January 2010 to Rs 11.99 billion in the first quarter this fiscal year. Top 5 banks in terms of RoE Nabil Bank - 35.25% Everest Bank - 32.62% Standard Chartered Bank Nepal - 29.80% Nepal Investment Bank - 29% NCC Bank - 23.72% nnnn STRUCTURES ON NO MAN’S LAND TO BE DEMOLISHED Kathmandu, 4 Dec.: India and Nepal have decided to demolish suspicious structures that have come up in the ‘no man’s land’ along the border of the two countries, said Hindustan Times on Tuesday, . The decision taken by chiefs of the border guarding forces Sashastra Seema Bal (India) and Armed Police Force (Nepal), is aimed at coordinating action against arms smugglers, narcotics, fake Indian currency and human trafficking,stated Hindustan Times The dialogue was an outcome of the home secretary-level talks between the two countries earlier this year where a decision was taken to get the border guarding forces to hold bilateral meetings. SSB director general Pranay Sahay raised the issue of militants and insurgents sneaking into India from Nepal, after the first round of the four-day talks. New Delhi has agreed to train Nepal’s multi-purpose force that handles internal security and borders. Both sides are set to intensify dialogue considering that the border is open and not fenced. Nnnn MAOISTS NOW ABANDON THEIR BASES IN RUKUM WHERE PEOPLE DEMAND SCHOOLS Kathmandu, 4 Dec.:Two houses surrounded by a compound wall stand proudly at Bheridanda in Chungbang, The Himalayan Times reports.. From the exterior, they appear to be normal houses but when one peeps into them both are in interior décor. They were the houses that once Pushpa Kamal Dahal, chairperson of the then Maoist rebels and Baburam Bhattarai, their vice-chairperson took shelter during the years of insurgency. Purchased from a local Ganja Bahadur Oli for Rs 2 million, the houses along with the land occupied by them have been decorated and treated as a museum now. A total of Rs 2.5 million including the locals’ fund and labour has been spent so far for the houses to transform them to the present state. Interestingly, while the village boasts of the ‘museums’ the two houses however are remaining useless. Children of the village are compelled to walk hours together to attend school. “What else could we do since there is no school in our village?” lamented local Lalita Khadka of Bheridanda, who spends four hours to take to and bring back her seven-year-old son from school. “As grown-up students can go to school on their own, the younger ones need us,” she added. In fact, the plight of Lalita is similar to many parents in the village, who have to make an ardous and risky journey for hours on the sharp cliffs to take their kids to the schools either to the neighbouring Gairigaun or Dharmashala villages. Millions have been spent hoping that people would come here to visit the houses once used by the Maoist leaders during the Chungbang meeting but to no avail. If the same fund had been spent to build a school here, at least our kids would have an easy access to education, and they would not discontinued their studies, said the locals. “We dared give them – Maoist leaders – shelter during the insurgency risking our own lives, but now the leaders who had promised to make our place a heaven have left our children in the lurch. In fact, they haven’t returned to this place again,” said Chanda Bahadur Khadka, a local. There are about 40 households in Bheridanda. “As even the beginners have to take such an arduous journey, most of the students left their studies halfway,” said Kabita Khadka, a Grade IX student. Locals lament that their pleas for a school in the village has fallen on deaf ears. They have blamed the government of depriving them of basic facilities. Nnnn JUDICIARY IN QUANDRY Kathmandu, 4 Dec.: To avert the looming crisis in judiciary, the government and the judicial system have stepped up efforts so that five ad hoc judges, who are retiring tomorrow, could be retained, Ananta Raj Luitel writes in The Himalayan Times.. Retirement of the five ad hoc judges will create a huge vacuum in judiciary, making justice dispensation too difficult. “We are making an all-out effort to find a convincing way to avert the crisis,” Khem Naryan Dhungana, a member of the Judicial Council told The Himalayan Times. The prime minister is also a member of the JC, the body that appoints the judges. Failure to reach a decision by tomorrow will result in retirement of five ad hoc judges — Baidhya Nath Upadhayay, Tarka Raj Bhatta, Gyanendra Bahadur Karki, Kamal Narayan Das and Bharat Bahadur Karki. According to Dhungana, Prime Minister Baburam Bhattarai has taken the issue ‘very seriously’, and he held talks with the leaders of political parties in a bid to find a way out to avert looming crisis. Prime Minister Bhattarai, during his talks with political leaders, tried to convince them that an ordinance or a presidential order as per Article 158 of the Interim Constitution was a must to save the ad hoc judges from retiring. Dhungana said the JC has floated two options. First, the government move ahead with an ordinance seeking to amend the Judicial Council Act and introduce a provision of US recess style of appointment of judges in the absence of Parliament. And second, the President issue an order to implement the constitution. Prime Minister Bhattarai today called on the President to apprise him of the crisis. He urged the Head of State to invoke Article 158 of the Interim Constitution. “But the President suggested that the prime minister try to forge consensus to resolve all the crises facing the country,” said President’s Press Adviser Rajendra Dahal. The President has also invited four major forces — the Unified CPN-Maoist, Nepali Congress, CPN-UML and United Democratic Madhesi Front — tomorrow to discuss current issues, including the crisis in judiciary. Prime Minister Bhattarai also met NC President Sushil Koirala and sought his support for the government to recommend an ordinance to the President. But Koirala did not give his consent for the ordinance. “When he asked me for the support, I proposed to him to resolve all the problems in a package,” said Koirala. Chief Justice Khil Raj Regmi, however, is hopeful that there would be solution by tomorrow. “If push comes to shove, I have to do something, and I will,” said Regmi, refusing to go in details of the initiative he is planning to take. “I am duty-bound to do something for the sake of judiciary,” he added. Some members of the judiciary and senior lawyers, they said appointing (or retaining) judges through an ordinance or any other way could be ‘extra-constitutional’ as a Supreme Court bench yesterday had a split opinion on the issue. “We urge the authorities not to make any unconstitutional move,” said Prem Bahadur Khadka, President, Nepal Bar Association. Former attorney general Sushil Pant said retaining judges without ‘a convincing solution’ would make the mockery of the rule of law. “I don’t think the JC will do anything that contradicts the constitution,” he said. Solution on the table! • Govt can bring ordinance to amend Judicial Council Act, subject to President’s approval • President can invoke Article 158 to remove constitutional difficulties, but Head of State has refused to do so • CJ can intervene, but he refused to say what his steps will be Nnnn TRANSIT TALKS WITH INDIA IN PIPELINE Kathmandu, 4 Dec.: Nepal and India are all set to revisit Treaty of Transit which confers transit rights through each other’s territory on mutually agreed routes and modalities. The treaty, being revisited for the third time, was last renewed for seven years in March 2006, The Kathmandu Post writes. The Ministry of Commerce and Supply (MoCS) has already forwarded the copy of letter of exchange (LoE) to revisit the treaty to the Ministry of Foreign Affairs ( MoFA) about one and a half months ago, according to Commerce Secretary Lalmani Joshi. In its proposal, Nepal has requested India to provide transit facility through Vishakapattam port of India and opening up the Rohanpur-Singhabad route and asked India to facilitate it that links Nepal’s trade with Bangladesh through rail route. Nepali and Bangladeshi side are long waiting an approval from the Indian side for the use of Rohanpur-Singhabad rail route, substituting the Birol-Radhikapur rail route. Bangladesh has provided the Birol-Radhikapur rail route to Nepal to facilitate trade and transit, which is limited in volume. Likewise, Nepal is seeking Indian nod for the use of Vishakapattam port besides Kolkata’s Haldia to facilitate its trade. Nepal’s transit trade is routed through twenty-two designated routes from India- Nepal border to the Kolkata port. “The Indian side is also positive towards freight open container through Indian railways. At present, India only allows the operation of closed containers up to Nepali land,” said Joshi. According to MoCS officials, MoFA has put serious reservation to India’s unilateral decision to impose a double-lock system on Nepal-bound cargo at Indian customs at the Kolkata port since last year. “MoFA has been saying that India’s unilateral decision to impose a double-lock system has undermine Nepal’s sovereignty. The ministry wants to revise it,” said a senior official at the Ministry of Commerce. The official said the Prime Minister Baburam Bhattarai had already been informed of the issue and that he had assured to discuss it with Deputy Prime Minister and Minister for Foreign Affairs Narayan Kaji Shrestha soon and resolve it amicably. Last year, India had imposed the double-lock system unilaterally to address their own concerns that containers headed for Nepal were being tampered with and that the one-time lock had been found broken many times to dump the goods in India. Nepali business men were uncomfortable with the double-lock system initially as they had to go through a further administrative step, causing a delay in delivery. However, a study carried out by South Asia Watch on Trade, Economy and Environment (SWATEE) this year has concluded that “system of double-lock has actually helped Nepal by ensuring quick delivery of goods unlike what was thought earlier with Indian police not checking cargo along the way.” Some government officials, given the view of Nepal’s fluid political situation, have been advising against an amendment to the provision of the treaty. “The conflicting claim and argument has put us in awkward situation,” added the Commerce Ministry official. Meanwhile, Nepal has been positive to an Indian demand to allow movement of goods from one part of India to another via Nepal through simple customs undertaking. India had been seeking such a facility on a reciprocal basis for the transit facility extended to Nepal. Since 1993, India has been allowing movement of goods from one part of Nepal to another via India through a simple process of customs undertaking. As Nepal’s trade volume with India continues to grow, surging by 68 percent on the previous fiscal, the Nepali business community has been demanding to import goods that they used to be imported from third countries. “With many multi-nationals now operating in India, the Nepali business community no longer need to import goods from third country. For instance cool, which the business community wants to import from India, nixing trade with third countries, a lengthy and time consuming process,” added Joshi. Nnnn NEA BOARD MEMBER SACKED TO UPGRADE CAPACITY OF POWER PLANTt Kathmandu, 4 Dec.:The Ministry of Energy (MoE) on Monday sacked Krishna Prashad Dulal as the member of Nepal Electricity Authority (NEA) board. Dulal had been opposing an MoE controversial plan to upgrade the capacity of Upper Trishuli 3A hydropower project from 60 MW to 90 MW, The Kathmandu Post writes.. Dulal said that Prime Minister Baburam Bhattarai, who also has Energy Ministry portfolio under him, sacked him for his stance against the project’s upgradation. According to MoE sources, Dulal was sacked from the NEA board to pave the way for making ministerial decision on the upgradation of Upper Trishuli 3A. The NEA board is yet to endorse the upgradation proposal. The upgradation is estimated to cost an additional Rs 4 billion, according to the NEA, and will delay the project by two more years. A Chinese company, which had initially proposed cost of Rs 2 billion for the project’s upgration by 30 MW, has now raised it to Rs 4 billion. According to the NEA officials, the capacity upgradation does not contribute much to resolving the power shortage, as the additional energy will be available only during the wet season. “I had been refuting the idea of the project’s upgradation in the board meeting since the beginning,” said Dulal, “I was sacked so as to clear the way to proceed with the controversial plan.” Energy Secretary Hari Ram Koirala, however, claimed that Dulal was sacked from the NEA board for his negligence towards the authority. “Why should one be put in the NEA board if he is politically motivated and has no good faith for the institution?” he said. Dulal had been appointed as an NEA board member during the tenure of then Energy Minister Post Bahadur Bogati. The decision to upgrade the project’s capacity has drawn criticism from within the MoE and the NEA. However, a high-level committee formed to study the possibility to upgrade the Upper Trishuli A Hydropower Project (60MW) has suggested to increase the project’s capacity by 30MW. In line with the Ministry of Energy (MoE) agenda, which has been pushing for upgradation of the project since mid-June, the committee headed by MoE Joint Secretary Moti Bahadur Kunwar suggested both the options—sticking to original plan of 60 MW and upgrading to 90 MW—are ‘feasible’. NEA officials, however, insist the committee’s dual recommendation ‘is a ploy’ to expand the project’s capacity to 90 MW. Kunwar-led committee was the third of its kind formed by the ministry on Upper Trishuli 3A after two previous committees had turned in reports against the capacity upgradation, stating it unfeasible both technically and financially. Chinese contractor China Gezhouba Group Co has also been pressing the NEA for the project’s upgradation ever since securing the contract. However, fomer Energy Ministers Prakash Saran Mahat, Gokarna Bista and Posta Bahadur Bogati had all rejected its demand. “The upgradation will only benefit the contractor and its local agent,” said an NEA official. “It is against the Public Procurement Act and EPC model based on which the project is being developed.” nnnn