NARENDRA KUMAR BASNET SUCCEEDS BINOD CHAUDHARY Kathmandum 24 Dec.: Narendra Kumar Basnet has been elected president of Confederation of Nepalese Industries (CNI)by the body’s 10th annual general meeting ad succeeds founder Binod Chaudhary who copleted a 10-year stint. Basnet a retired government official was senior confederation’s vice-president. He’s chairman of Bank of Kathmandu. nnnn SHANKATA PLAYS JAWALAKHEL IN FOOTBALL LEAGUE Kathmandu, 24 Dec.: Shankata plays Jawalakhel in Monday’s Martyrs Memorial A Division Football League Championship at Dashrath Rangashala. Madhayapur plays MMC in another match. RCT and Three Star top the chart with 20 and 19 points each in eight match each. nnnn. MEDIA GOOGLE "Majority of the people wish for a Hindu state in the country, declaration of Nepal as a secular state was a conspiracy." (RPP-Nepal Chairman Kamal Thapa, The Kathmandu Post, 24 Dec.) Nnnn NT SIGNING CONTRACT WITH CHINA’S HUAWEI Kathmandu, 24 Dec.: Nepal Telecom (NT) has formally invited telecommunication equipment vendor Huawei Technologies to sign an agreement for 5.2 million mobile lines. The state-owned telecom giant said it issued a letter of acceptance to the Chinese firm on Friday asking it to conclude a contract within 15 days, The Kathamandu Post writes.. The proposed deal is Package A of NT’s mega project to distribute 10 million mobile lines. The Chinese vendor had quoted US$ 122 million for the project. Under this package, NT will distribute new mobile lines in the Central, Eastern, Far Western and Mid-Western development regions. Huawei has also won the contract for Package B under which 4.8 million lines will be distributed to customers in the Kathmandu valley and the Western Development Region. “We will be signing a contract with Huawei for 5.2 million lines soon,” said Guna Kesari Pradhan, NT spokesperson. Under this mega project, NT will have a capacity to distribute 5 million 2G lines, 4.5 million 3G lines and 500,000 4G service lines. As per the tender condition, the Chinese vendor will supply the telecom equipment, install it and make the NT network capable of adding 10 million new users by 2015. The current system capacity of NT allows it to add only 5.5 million lines, but it has distributed 600,000 more lines than the upper limit. The company had long been planning to add capacity to cater to the growing demand from customers and compete with private sector operators like Ncell. NT officials said that the project would help expand 3G service in a big way with customers slowly being attracted to mobile data service and the tariff rate coming down. They said that for expensive 3G enabled handsets and data service, NT had suffered a loss in the 3G service business in the early years. The company launched 3G service in 2007 and has been able to attract only 112,000 customers till date. Earlier, NT had planned to implement the 10 million line project through two vendors by breaking it into two packages to ensure effective implementation and avoid dependency on a single vendor. However, with the other bidders ZTE Corporation and Ericsson refusing to accept Package A for cost reasons, NT had approached Huawei to do it. In June, NT signed a contract with Huawei for Package B for Rs 6.74 billion (US$ 85 million). Pradhan said that Huawei had completed installation of the core network system and started work on installation of mobile towers for the 4.8 million lines. She added that the company planned to start distributing new mobile lines by mid-July 2013. Nnnn CHINESE BANK ASSURANCE RECEIVED Kathmandu, 24 Dec.: China Construction Bank, which has given a bank guarantee to the ex-contractor for Melamchi Water Supply Project, has finally responded to Nepali counter guarantor banks assuring them it was ready to release guaranteed amount as per the international banking norms, Ashok THapa writes in The Kathmandu Post.. The Chinese Bank has also clarified that it stopped releasing the guarantee amount due to stay order of a local court. After the termination of contract with China Railway 15 Bureau Group for the tunnel construction, the project has been seeking release of the bank guarantee amount from local banks that gave counter guarantee. Himalayan Bank Limited (HBL) and Bank of Kathmandu (BoK) had provided the Chinese bank a performance security of $6.62 million and guarantee for advance payment of $6.62 million and 1.4 million euros. “Despite initial dillydallying to respond on the issue, the Chinese bank has finally responded to us last week promising to act as per the international banking norms,” said Ahoke Rana, chief executive officer of Himalayan Bank. In a SWIFT message to the Nepali banks, the Chinese bank has stated it would fight the court battle against the contractor for the release of the bank guarantee amount. BoK CEO Ajaya Shrestha said that the Chinese bank had sought Nepali bank’s cooperation in generating enough documents to ensure release of the bank guarantee amount. The Chinese Bank had earlier informed the Nepali banks about its inability to release the amount due to local court’s order. The Nepali banks then responded back, warning that failure to release the guarantee amount would put the China Construction Bank’s reputation at stake. Chinese bank’s response has come at a time when both Nepal Rastra Bank and the government have stepped up their efforts to get the bank guarantee amount released. On Thursday, a high-level Financial Sector Coordination Committee headed by Finance Minister had decided to make a diplomatic effort to secure the release of the amount from the Chinese bank. A team of Nepal Rastra Bank had also been to China recently to discuss on the issue with the Chinese central bank, among other things to enhance relations between the central banks of the two countries. The Chinese bank’s response has convinced Rana that the amount would be released. “Failure to release the amount may cost the Chinese companies dearly here as Nepali banks will be reluctant to give counter guarantee to Chinese banks,” said Rana, referring to the Nepal Bankers’ Association recent decision to adopt maximum caution, while giving counter guarantee to Chinese banks. Krishna Prashad Acharya, director general of Melamchi Water Supply Development Board, the Melamchi project’s implementing agency, said that the Chinese bank was in “a damage control” mode amidst growing concerns about its role. After the government terminated the tunnel construction contract with China Railway 15 Bureau Group, the Chinese company had filed a case in the local court asking for a stay order on the release of the money. nnnn