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R&D Economic Research & Business Development

Date: December 3, 2009

Highlights

Prime Minister Madhav Kumar Nepal telephoned UCPN (Maoist) Chairman Pushpa Kamal Dahal twice on Monday morning — first, to invite the main opposition leader to a meeting of the Constitutional Council, and then to deliver a clear message that the government would go ahead with the meeting re-scheduled for Sunday with or without the exofficio member. Nepali Congress vice president Ram Chandra Paudel today said that the new constitution, as desired by the people, would not be possible without first settling the Maoist fighters and their arms. Outgoing Chief Justice Min Bahadur Rayamajhi in an exclusive interview to The Himalayan Times on Wednesday accused the executive of trying to control the judiciary. He cited the recent bid of the Constituent Assembly Committee on Judicial Structure to back his assertions. “China supplied 4.2 million rounds of 7.62 mm rifle ammunition, 80,000 high explosive grenades and 12,000 AK-series rifles to Nepal last week. Beijing has gone ahead with the supplies despite Washington and New Delhi urging it not to fish in the troubled waters”, wrote the The Indian Express, November 30, 2005. Though the UCPN (Maoist) has announced Dec. 11-18 as dates for declaration of 13 autonomous states, the party’s dilemma regarding demarcation of borders and names of the states is yet to be resolve. Top leaders of the CPN (Unified Marxist-Leninist) have criticized party Chairman Jhala Nath Khanal for allegedly coming up with an inaccurate political report. Prime Minister Madhav Kumar Nepal, senior party leader KP Sharma Oli and UML Secretary Bishnu Poudel criticized Khanal while speaking at the party´s politburo meeting on Wednesday. Finance Minister Surendra Pandey on Tuesday said that the government would start work on 456 MW Upper Tamakoshi from June 2010, upon construction of the link road expected to completed in mid-May. The oft-postponed deadline for completion of the Melamchi Water Supply Project (MWSP) is likely to be postponed again, thanks to ongoing disruption by local people in Sindhupalchowk and Kavre districts. The Asian Development Bank and the United Nations Development Program (UNDP) have signed two MoU to help Nepal government in enhancing reforms in local level governance. The two MoU for

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Administrative Arrangements focus on: (i) expanding the outreach of UNDP’s ongoing Public Private Partnership for Urban Environment (PPPUE) Program to four municipalities, and (ii) initiating new methods of supporting service delivery for marginalized groups. The ADB is providing USD 381,000 for the projects. The government of India has handed over three development projects accomplished with its financial assistance in Sunsari, Siraha and Saptari district to the local community. Indian ambassador to Nepal Rakesh Sood handed over newly constructed Municipality road at Inaruwa Bazaar in Sunsari, library building for Murarka Multiple Campus, Lahan, Siraha and Seven Deep Tube Well Systems in Saptari to the local community Standard Chartered Bank Nepal launched a priority banking card for its customers. According to a press statement issued by the bank, the launch of the priority card was aimed at addressing special requirements of the bank´s priority banking customers, like providing unique benefits and innovative solutions. Employees Provident Fund (EPF) has clarified that it will not sanction a new loan to Nepal Airlines Corporation (NAC) unless the government pays back earlier loans issued against its guarantee. In what would be a big surprise to most of the households throughout the nation, residents of Jumla do not have to bother about power cuts in the winter. It is not because of enough electricity is generated in Jumla, as power generation in Jumla far below the demand, but the consumers have wisely utilized the available power. Gold price in the Nepali market has reached Rs 29,065 per 10 gram (Rs 33,900 per tola), a record. The domestic market has experienced a growth of Rs 5,000 in a month. Jet Airways, India's prestigious international airlines, has commenced Mumbai-Kathmandu-Mumbai flights from Wednesday. The airlines will operate five flights - Monday, Wednesday, Thursday, Friday and Sunday between Kathmandu and Mumbai a week by Boeing 737-800 aircraft. The Birgunj Customs Office will be purchasing 18 more vehicles imported from third countries and held at the customs for being undervalued. Nepal Petroleum Dealers' Association (NPDA) and agitating Maoist affiliated All Nepal Petroleum Workers' Union (ANPWU) on Wednesday reached an agreement to resume supply of petroleum products from Thursday. Ongoing protest of petrol pump workers has triggered shortage of petroleum products across the country for the last five days. The workers affiliated with Nepal Petroleum Workers´ Association (NPWA) have been

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barring private refilling stations from receiving supplies from Nepal Oil Corporation (NOC) depots from Friday. Exhibitors at the Electro Tech expo said that they were receiving a very good response from the general public and retailers wanting to expand their business links with new wholesalers. Maoist leader Baburam Bhattarai on Wednesday protested against a 19th century treaty between Nepal and India, describing it as an unequal pact, even as 16 people were arrested for demonstrating outside the Indian embassy here in protest of the agreement signed in 1816. Police on Wednesday arrested two UCPN (Maoist) activists on the charge of looting paddy from a farmer at Rajapur Tappu region in Bardia. The Unified Communist Party of Nepal (Maoist) has decided to ´unilaterally´ discharge the disqualified combatants and has asked the UN country team to develop a discharge plan, said Maoist leader Janardan Sharma.

POLITICS: ‘I won’t wait next time’ Prime Minister Madhav Kumar Nepal telephoned UCPN (Maoist) Chairman Pushpa Kamal Dahal twice on Monday morning — first, to invite the main opposition leader to a meeting of the Constitutional Council, and then to deliver a clear message that the government would go ahead with the meeting re-scheduled for Sunday with or without the ex-officio member. According to the Interim Constitution, participation of the leader of main opposition party is a must for the meeting to appoint heads of constitutional bodies. “The Cabinet will decide what it should even if you are absent on Sunday,” Nepal told Dahal over phone when the latter kept away from the day’s crucial meeting to recommend names to head constitutional bodies, incluidng the Public Service Commission, the Commission for the Investigation of Abuse of Authority (CIAA), the Election Commission, and the Office of the Auditor General. Earlier on Monday, Dahal did not show up for the meeting that recommended Anup Raj Sharma as the new Chief Justice, but approved the decision through his signature that evening. After Dahal failed to attend Wednesday’s meeting, the prime minister rang him up to learn about the cause of absence. Dahal reportedly told the prime minister he could not attend because he was busy with his party’s internal meeting and promised to attend the next meeting on Sunday.

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The prime minister warned he was not going to wait for Dahal’s participation if he didn’t show up. Source: www.ekantipur.com Date: December 2, 2009 Settle integration first, statute-drafting later: Paudel Nepali Congress vice president Ram Chandra Paudel today said that the new constitution, as desired by the people, would not be possible without first settling the Maoist fighters and their arms. Talking to party cadres today in Pokhara, Paudel said that the Maoists had resorted to looting of property and paddy of the farmers and unilaterally declared 'federal republican states' by breaching the Comprehensive Peace Agreement (CPA). "Such moves of the Maoists would adversely affect the nascent loktantra and peace process and push the nation back to spiralling conflict," he warned. Meanwhile, Paudel also urged his party cadres to discard the Maoist threats and work towards consolidating the gains of loktantra. He said that since the Maoists have been creating terror among common people, it was the NC which should guarantee people their safety. Paudel also alleged that the Maoists had tricked the people by trying to impose an ideology that had failed elsewhere in the world. He also accused the UNMIN of keeping disqualified Maoist combatants in cantonments and said the government would not be able to pay salary and perks for them. Arguing that the NC does not approve of individual influence and domination following the recent Mahasamiti meeting, he claimed that the party in recent time was witnessed to burgeoning intra-party democracy. Paudel also informed the cadres that the party's general assembly had been put off. Meanwhile, Mohammad Aftab Alam, Minister for Labour and Transport Management, said the NC did not need Maoist lessons on civilian supremacy. Also, talking to The Himalayan Times in Damauli of Tanahun today, Paudel accused the Maoists of not intending to form the high level political mechanism believed to end the political impasse. Earlier, Paudel visited a irrigation project near Dumsi in Damauli-9 and a compost manure production site in Parewadanda, Kalesti, Kumaltari and Darai. Source: www.thehimalayantimes.com Date: December 2, 2009

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Control judiciary unfortunate: CJ Outgoing Chief Justice Min Bahadur Rayamajhi in an exclusive interview to The Himalayan Times on Wednesday accused the executive of trying to control the judiciary. He cited the recent bid of the Constituent Assembly Committee on Judicial Structure to back his assertions. “The CA wants to control the judiciary. It’s unfortunate that parliament wants to exercise final authority to interpret the constitution and law. Perhaps, the move stems from the fact that it has the power to promulgate law and amend constitution. The Supreme Court cannot safeguard the fundamental rights of the people without judicial review. The threat to loss of judicial review doesn’t augur well for the apex court,” said Rayamajhi. Source: www.thehimalayantimes.com Date: December 2, 2009

Oli demands Khanal withdraw report Top leaders of the CPN (Unified Marxist-Leninist) have criticized party Chairman Jhala Nath Khanal for allegedly coming up with an inaccurate political report. Prime Minister Madhav Kumar Nepal, senior party leader KP Sharma Oli and UML Secretary Bishnu Poudel criticized Khanal while speaking at the party´s politburo meeting on Wednesday. According to a politburo member present at the meeting, Oli, Khanal´s rival in the party, demanded that the chairman´s report be withdrawn. "The report is more like a document presented by one faction instead of something prepared by the chairman of the party," the member quoted Oli as saying. In his political report presented at the party´s ongoing politburo meeting, Khanal had pointed out the government´s failure to reach any agreement with the UCPN (Maoist) and forge a national consensus. Despite the fact that the government is headed by senior UML leader Nepal, Chairman Khanal is lobbying for forming a national unity government with Maoist participation. At the meeting, Prime Minister Nepal´s emphasis was on party unity. He suggested that the chairman take the initiative to strengthen party unity through dialogue among the leaders. The prime minister also urged the party leadership to make a realistic evaluation of the government. "Make an objective evaluation of the government. State categorically what are the things the government could do and what are the things in which the party has failed to deliver," a leader quoted the prime minister as saying. In his political paper, Khanal argued that the UML needs to be ready to make a ´sacrifice´ for the sake of national consensus. The portion of Khanal´s report

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mentioning the ´sacrifice´ was the most criticized by a majority of members. They demanded clarification by the chairman if he wanted to suggest that the party leaders step down from the government to pave the way for the Maoists to lead it. Both Nepal and Oli were for bravely facing the Maoists and exposing the former rebels´ wrongful activities. "The UML should not remain a mute spectator while the Maoists give continuity to their wrongful activities," they said. UML Secretary Poudel termed the report meaningless. He claimed that the report had neither an objective nor any goal. However, a UML leader who is close to Khanal said that the criticisms of the report were biased. He said it is meaningless to demand withdrawal of the report as there is no past record of the party head making such a withdrawl. "A report can be corrected as it is a document presented for discussion and suggestions are expected from members. Correction is not a big deal but a suggestion to withdraw the report is meaningless," the party leader said. Source: www.myrepublica.com Date: December 2, 2009

POLICY: Strong China Critic Nepal PM to Visit Beijing Dec 26 “China supplied 4.2 million rounds of 7.62 mm rifle ammunition, 80,000 high explosive grenades and 12,000 AK-series rifles to Nepal last week. Beijing has gone ahead with the supplies despite Washington and New Delhi urging it not to fish in the troubled waters”, wrote the The Indian Express, November 30, 2005. The then Royal Nepal Army Chief, Gen. Pyar Jung Thapa upon his return from talks in the Chinese capital, 2005, announced that Nepal had decided to buy its military equipment from China including an aircraft to Nepal to the Royal Nepal Army. Madhav Kumar Nepal, the then leader of the agitating Seven Party Alliance who was in New Delhi, November 2005, had warned the Chinese regime to resist from arming the then King Gyanendra’s regime or else relations between the two countries will deteriorate. The same Madhav Nepal who lambasted at the Chinese regime being in New Delhi is Nepal’s Prime Minister. China perhaps knows better who is friend and who is not. It was then talked then that Madhav Nepal, being a Nepali national, warned China by being in New Delhi. Three country involvement that it was. The event then allowed India to make swift moves against Gyanendra’s regime with the Seven Agitating Parties and the ex-rebels the Maoists’ Party, residing then in New

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Delhi itself, on their side, India managed to uproot the 240 Years Institution of Hindu Monarchy from Nepal easily. However, now the same Madhav Kumar Nepal is heading allegedly a pro-India government in the Republican Nepal and on the eve of his state visit to China, tentatively fixed for December 26, 2009, is planning to revive the proposal to buy an aircraft from China for the Nepal Army. To recall, the Girija Prasad Koirala led coalition government that was formed immediately after Gyanendra’s regime collapsed had to dump the same proposal heeding to excessive Indian pressure. The Nepal Army had already paid initial amount worth 39 Crore Rupees to the Chinese side as back as in 2005 to buy two MA-60 aircrafts for the military purposes. Koirala government, a choice of the Indian regime in Nepal, later asked the Chinese side to return the initial amount, to which China said it was not possible. Reportedly, the Nepali Prime Minister during his trip to China will request the Chinese regime to deliver the aircrafts. Reports also say that Tanka Karki, Nepali ambassador to Beijing has already requested the Chinese side to provide different types of Aircraft suitable to the Nepal Army but no MA-60. In reply, the Chinese side has proposed high wing twin-engine turboprop utility three Y-12 aircrafts for Nepal, report declares. How China welcomes a declared India friend, Nepal PM Mr. Madhav Kumar Nepal, will be no less interesting to observe this time around. Source: www.telegraphnepal.com Date: 2009-12-03

Work on Upper Tamakoshi to commence from June 10 Finance Minister Surendra Pandey on Tuesday said that the government would start work on 456 MW Upper Tamakoshi from June 2010, upon construction of the link road expected to completed in mid-May. While speaking at a press meet in the capital, FM Pandey said work on 1.1km tunnel that connects with the underground powerhouse is also progressing satisfactorily. The government is said to be committed to manage required resources for the project, for which about Rs. 29 billion had already been managed. Employees' Provident Fund, Nepal Telecom, Citizen Investment Trust and commercial banks have pledged to provide funds for project.

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Pandey also said that the government was going to sign a loan agreement with the Chinese government on 60MW Upper Trishuli Hydropower project. The finance ministry and Chinese Export-Import Bank have already signed a memorandum of understanding on providing loans of US$ 200 million for this project in addition to proposed regional airport in Pokhara. US$ 80 million out of US$ 200 million will go to airport as per the MoU. Speaking on the country’s economic condition, he said, "Export has reduced but import grew significantly. And, it is a challenge to increase the export volume.” Additionally, the government is also going to build 3,000 low-cost houses for Dalits of iraha, Saptari and Kapilvastu districts. Inauguration of a fast-track road between Kathmandu and Nijgadh, embankment in Bagmati, Kamala and Triyuga rivers and Upper Tamakoshi hydropower are achievements of the government, said Pandey. It has selected 919 projects in conflict-affected zones, among which 409 are in operation. The government has also finalized the initial process of distribution of biometric identity cards for Nepalis. The government has also decided to give 50 percent subsidy for establishing organic fertilizer plants. Source: www.nepalnews.com Date: December 2, 2009 Melamchi by 2013 unlikely as work stalls for months The oft-postponed deadline for completion of the Melamchi Water Supply Project (MWSP) is likely to be postponed again, thanks to ongoing disruption by local people in Sindhupalchowk and Kavre districts. Although the Melamchi Water Supply Development Board (MWSDB) has not announced any postponement of the current deadline, sources at MWSDB say completion of the project is next to impossible within the stipulated time. “No further progress has been made for the past four and a half months,” sources informed. “Only some office work is underway.” Villagers in Sindhupalchowk and Kavre districts have padlocked the main field office, preventing vehicles carrying constructing materials from entering the project site. Of late, MWSDB has given in to the local villagers´ demand to change the project name to Hyolmo-Sindhu project. However, their nine other demands remain unaddressed. One of their latest demands is that MWSDB should recognize an additional 15 villages as part of the project-affected area. So far, MWSDB has identified 14 villages in Sindhupalchowk and five in Kavre as project-affected. MWSDB has witnessed a peculiar trend of frequent protests by local villagers. A new group of dissident

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villagers come up with their own demands once MWSDB pacifies some previouslyagitating group. However, Narendra Baral, deputy executive director at MWSDB, has maintained that there is no possibility of further delay at the project. “Valley denizens will certainly get to drink Melamchi water by 2013,” Baral told Republica. “We are still committed to completing the project no later than the given deadline, despite all sorts of disruptive protests.” Baral assures that construction work at the project site has not been obstructed. But workers deployed at the site rubbish his assurance. “How can they continue with their work if the main entrance to the project site remains padlocked for such a long time?” one worker asked. According to him, the Chinese contractor has gotten some of the workers to enter the site from the back after tearing apart some barbed wire. They, however, are not able to work as expeditiously as earlier without smooth supply of all the construction material. It is not only agitation by local villagers that has marred progress at the much-hyped project. A separate agitation within the project has added to MWSDB´s owes. The Melamchi Water Supply Project Workers´ Union (MWSPW) has been carrying out protests since November 19 demanding reform of the project, without which it says successful completion of the project is impossible. Resumption of construction work on the project is one of the union´s major demands. “We ask the authorities concerned to hold significant talks with agitating local villagers,” Hari Rimal, union secretary, says. “The authorities´ sheer indifference toward resuming the project work is pushing back people´s dreams about Melamchi.” The donor-funded Melamchi project is expected to rid Valley denizens of their prolonged water scarcity. The project aims to supply drinking water from the Melamchi River to the Valley through a 26-kilometer tunnel. Adding to the likelihood of postponement of the deadline, construction of the tunnel also remains halted. However, Baral rules out any link between local villagers´ agitations and discontinuity of the tunnel work. “The tunnel construction has been stopped mainly because of delay in the import of required equipment,” he said. “We will promptly resume work once all the equipment is imported.” Source: www.myrepublica.com Date: December 2, 2009 ADB, UNDP sign MoU to enhance reforms in local level governance The Asian Development Bank and the United Nations Development Program (UNDP) have signed two MoU to help Nepal government in enhancing reforms in local level governance.

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According to a press release issued by the UNDP in Kathmandu, the two Memoranda of Understanding (MoU) for Administrative Arrangements focus on: (i) expanding the outreach of UNDP’s ongoing Public Private Partnership for Urban Environment (PPPUE) Program to four municipalities, and (ii) initiating new methods of supporting service delivery for marginalized groups. The four municipalities are Birganj, Butwal, Dharan and Dhangadhi. The ADB is providing USD 381,000 for the projects. The additional funds for increasing the role of the private sector in selected municipalities aims at increasing the local bodies’ own-source revenues and provide services more effectively and efficiently with UNDP/PPPUE support. The funds for new initiatives in service delivery are provided by the Australian Government through the AusAID-ADB Development Partnership Facility for South Asia – and will be used for recruiting and placing 25 national women volunteers within selected local bodies of Nepal (including municipalities) through the United Nations Volunteer (UNV) Program, the release added. During the signing ceremony, the Asian Development Bank Country Director for Nepal, Barry Hitchcock said, “ADB is keen to work with interested development partners in supporting local governance reforms in Nepal. As the country moves towards a federal form of governance, it is necessary that greater focus be placed on providing more effective service delivery at all levels of local government, including municipalities”. UNDP Country Director Anne-Isabelle Degryse-Blateau said, “We are very pleased at this landmark agreement between the ADB and UNDP and we look forward to seeing improvements in the delivery of basic services through the expansion of Public Private Partnerships.” Source: www.myrepublica.com Date: December 2, 2009

India hands over three development projects in Nepal's Terai region The government of India has handed over three development projects accomplished with its financial assistance in Sunsari, Siraha and Saptari district to the local community. Indian ambassador to Nepal Rakesh Sood handed over newly constructed Municipality road at Inaruwa Bazaar in Sunsari, library building for Murarka Multiple Campus, Lahan, Siraha and Seven Deep Tube Well Systems in Saptari to the local community.

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Sood took this step during his visit to these districts from Dec1 to 2. The 2.25 km long Inaruwa Bazaar road in Sunsari district had been damaged due to heavy rains and passage of time. The road was renovated with assistance of Rs.30 million. The new library building of the campus constructed with assistance of Rs. 6.4 million will provide a well equipped library to over 700 students of the campus. Likewise, the Farmer-managed Deep Tube Well systems in Saptari are among the 22 deep tube wells developed in Jhapa, Sunsari, Saptari and Siraha districts with Indian assistance of Rs 80.87 million. During the visit, the Ambassador of India also laid foundation stone for River Training Works at Triyuga River in Udaypur and construction of new school building for Shree Jyoti Higher Secondary School, Beltar in Udaypur. Source: www.nepalnews.com Date: December 2, 2009

BANKING:

SCBN launches priority cards Standard Chartered Bank Nepal launched a priority banking card for its customers. According to a press statement issued by the bank, the launch of the priority card was aimed at addressing special requirements of the bank´s priority banking customers, like providing unique benefits and innovative solutions. Sujit Mundul, chief executive officer the bank, brought priority card into operation amid a function on Monday. Priority card holders can be benefited to special services like exclusive discounts and services at partner establishments from specific locations of the banks in 25 countries, says the statement. Source: www.myrepublica.com Date: December 2, 2009

BUSINESS & ECONOMY:

No loan without govt guarantee: EPF Employees Provident Fund (EPF) has clarified that it will not sanction a new loan to Nepal Airlines Corporation (NAC) unless the government pays back earlier loans issued against its guarantee. 11


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EPF, which is regarded as the largest non-financial institution in terms of deposits worth Rs 80 billion belonging to some 440,000 government employees, is the only lender ready to extend loan to help NAC purchase two aircraft. However, the lender has put government guarantee -- government´s legal pledge to payback if NAC fails to pay back loan - as the main condition to sanction the loan. Speaking at an interaction organized by parliamentary Public Accounts Committee (PAC) on Tuesday, top officials of EPF dropped hint that issuance of a government payback guarantee alone will not be enough to secure release of loans from EPF. Financially sick NAC has lately initiated a plan to buy to two aircraft -- A320-200 and A330-200 -- manufactured by European giant Airbus at the cost of around Rs 10 billion. “We want the government to payback the state-guaranteed loans extended to Nepal Oil Corporation and Nepal Orient Magnesite before we take formal decision on extending loans to NAC,” Arvinda Kumar Shrestha, chairman of EPF, said. He repeatedly ruled out possibility of releasing loan to the ailing national carrier without receiving a government guarantee. "There is no question of releasing the loans without a government guarantee for both interest and principal," he stressed. Shrestha further added that the board of the EPF will take no decision on lending the money to NAC unless PAC endorses the NAC´s plan to buy two aircraft. As per the 10-point condition laid out by a meeting of Board of Directors some eight months ago, EPF has proposed a 10 percent annual interest rate on the loans to be extended to NAC. However, EPF signaled that it would be ready to review the rate once the planned new aircraft come into operation. Likewise, EPF has also demanded that 50 percent of the income that NAC will earn from the operation of the two planned aircrafts should be used in repaying the loans taken from it. Earlier, EPF had agreed to extend loans between Rs 5 billion to 10 billion to the national flag carrier provided that the state issued payback guarantee. Source: www.myerpublica.com Date: December 2, 2009 Jumla is free from power cuts In what would be a big surprise to most of the households throughout the nation, residents of Jumla do not have to bother about power cuts in the winter. It is not because of enough electricity is generated in Jumla, as power generation in Jumla far below the demand, but the consumers have wisely utilized the available power.

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Some 25 years ago, 169 kw Chandannath Micro-hydro Project was started with the aim to benefit 500 households. But the project is benefitting 3,000 households now while power generation has gone down to 130 kw. Yet, the district stands as a powercut free zone, thanks to discretion of local consumers. Jumla brought about this enigmatic innovation in energy efficiency after local consumers took responsibility of the project last year. President of the Project Consumers Committee (PCC) Bishnu Bahadur Budthapa said the key to success was finding out the ways to efficiently using the available electricity. PCC has banned using high power consuming appliances like rice cooker, heater and bulbs and enforced a rule of fining Rs 500 in case of violation. "You can no longer see any household turning on red bulbs, let alone using heaters and rods," Budthapa said. PCC has also banned operating press and machines for an hour between 5 to 6 pm in the evening. As a result, operation of local industries is not interrupted in daytime. To motivate the consumers toward efficient usage of electricity, PCC last year had bought CFL bulbs in bulk worth Rs 1 million which included an aid of Rs 400,000 from District Development Committee. Consumers now buy CFL bulbs themselves. "It is better to buy two CFL bulbs instead of paying Rs 500 in fine," said Lal Bahadur Rokaya of Chandannath-7. Wise ways of using electricity has lit Jumla round the clock and at the same time generated a profit of Rs 5 million for the project over a year. "Earlier, 500 watt would be consumed with each household turning on five red bulbs. However, each household now lighting 10 CFL bulbs only use 55 watt. This is the key to our success," Budthapa said. According to him, distributing surplus power to additional 500 households has generated huge profit to the committee. Before taking over operation of the project, locals had faced a day´s power cut every three days. Source: www.myerpublica.com Date: December 2, 2009 Gold price at new record high, sales down by as much as half Transaction in the Nepali bullion market has scaled down to half despite the marriage season. Crowds are seen in jewellery shops but overall transaction is 80 per cent below the average. It is because of the skyrocketing gold price. Gold price in the Nepali market has reached Rs 29,065 per 10 gram (Rs 33,900 per tola), a record. The domestic market has experienced a growth of Rs 5,000 in a month. But, this is not a factor downsizing the sale. “Actually, the fluctuation is hampering the market,” said Sunil Shrestha of RK Jewellers at New Road, “If the price stabilises, the market will flourish.”

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Nepali jewellery shops are selling 12 kg gold per day, half of the demand during marriage season — 25 kg per day, Nepal Gold and Silver Dealers’ Association (NEGOSIDA) data revealed. “Only 15 per cent people are buying new gold,” said NEGOSIDA president Tej Ratna Shakya. People are compelled to reduce their gold demand seeing the price, he added. Indu Ghimire, an inhabitant of Sinamangal, was in Gems Ornament Emporium to exchange her old jewellery for new. “I am looking for jewellery for my daughter but can’t buy more,” she said, “I am here to exchange old for new.” She said she would buy two-three tolas at the new price rather then buying eight tolas. Sabina Kafle, Binu Pant and others seen in jewellery shops at New Road had the same plan. “The price is irregular so I don’t prefer to buy more,” said Pant, “I don’t want to take risks.” People are usually buying two-five tolas gold for the marriage season, which is less than half the earlier normal demand. Still, jewellery shop owners are optimistic about normalcy returning. “We are expecting a market revival by the next Nepali new year,” said Nirmal Krishna Shrestha of Gems. The price hike has also affected silver ornaments but sales of gold-plated jewellery is high. People are turning toward goldplated stuff and its sale has increased by 30 per cent. “I will buy some gold-plated jewellery,” said Kafle, “It is the best alternative to meet the crisis.” Meanwhile, silver priced Rs 476 per tola in the market. Source: www.thehimalayntimes.com Date: December 2, 2009 Jet Airways starts Mumbai-Kathmandu flight Jet Airways, India's prestigious international airlines, has commenced MumbaiKathmandu-Mumbai flights from Wednesday. The airlines will operate five flights - Monday, Wednesday, Thursday, Friday and Sunday - between Kathmandu and Mumbai a week by Boeing 737-800 aircraft. Jet Airways flight 9W 266 will depart from Mumbai at 8:05 am and arrive in Kathmandu at 10:55 am. Flight 9W 265 will then leave Kathmandu at 11:55 am and reach Mumbai at 2:20 pm. Jet Airways currently operates 26 flights between Nepal and India. There are two Jet Airways flights between Kathmandu and New Delhi in a day. JetLite, a subsidiary of Jet Airways, offers one daily flight on these destinations. Nepal Tourism Board (NTB) has expressed belief that the flight link will prove beneficial for Nepal Tourism Year 2011. The number of Indian tourists has remarkably increased in recent months - posting a growth of 20 percent and 16 percent in October and November, respectively. Source: www.nepalnews.com Date: December 2, 2009 14


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Petroleum dealers, workers sign deal Nepal Petroleum Dealers' Association (NPDA) and agitating Maoist affiliated All Nepal Petroleum Workers' Union (ANPWU) on Wednesday reached an agreement to resume supply of petroleum products from Thursday. The late evening meeting between the NPDA and ANPWU under the coordination of Ministry of Labor and Transport Management (MoLTM) reached the agreement as both sides agreed on the major issues of providing appointment letters and implementing the minimum wage provision fixed by the government. The other points of agreements include provisions of Rs. 250,000 for life insurance, Rs. 50,000 for health insurance and an overtime allowance. The dealers will issue appointment letters and provide the minimum wage to the workers with effect from July 16, 2009. The government has fixed Rs. 4,600 as benchmark for minimum monthly wage. The agitating workers had put forward a 16-points demand that included appointment letter, insurance cover, overtime allowance and permanent appointment. Representatives of MoLTM, Ministry of Home Affairs, Ministry of Commerce and Supplies, Nepal Oil Corporation and Consumer Rights Protection Forum were involved in the meeting. The workers had started their agitation programme from the Eastern region on Nov. 17. The workers started their agitation in the capital from Nov. 27 . As the dealers initially refused to heed to their demand the workers virtually closed all petrol pumps across the country from Nov. 29. Source: www.ekantipur.com Date: December 2, 2009 Dealers call for talks as fuel shortage deepens Ongoing protest of petrol pump workers has triggered shortage of petroleum products across the country for the last five days. The workers affiliated with Nepal Petroleum Workers´ Association (NPWA) have been barring private refilling stations from receiving supplies from Nepal Oil Corporation (NOC) depots from Friday. They have put forth 16-point charter of demands, including appointment letter for workers, insurance facility, overtime allowance and permanent appointment to workers who have worked for eight months.“ "Our protest is already in the fifth day. Unfortunately, neither the government nor the petroleum dealers have taken any concrete initiative to resolve the issue," Shiva Prasad Pokhrel, secretary of NPWA, told Republica on Tuesday. Furious at the government and dealers´ apathy toward the issue, the workers have decided to continue their protest until their demands are addressed“

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"The refilling stations that are not providing government-fixed salary to their workers should close their busine”s," Pokhrel added. He also claimed that workers were drawing only Rs 1,500 per month, without any overtime allowance and insurance facility, despite long working hours and hazardous nature of works. The workers also said they had not received invitation for talks till Tuesday evening. According to NPWA, over 10,000 petroleum workers are employed across the country. The number of vehicles plying on the roads across the country has declined by over 25 percent, due to shortage of petroleum products, according to entrepreneurs.“ "More than 25 percent vehicles have remained off the roads due to fuel crun”h," Saroj Raj Sitaula, treasurer of Nepal Transport Entrepreneurs National Federation, said. The shortage of vehicles has ultimately hit commuters as vehicles stay off the roads from the early evening. However, the agitating workers have allowed refilling stations operated by Sajha, Nepal Army, Nepal Police and Armed Police Force to receive supplies from NOC depots. Long queues of vehicles can been at these refilling stations. Consumer rights activists have flayed the government´s apathy to toward the problem, even as the consumers continue to reel under acute fuel shortage“ "The government has remained silent even as the problem of fuel shortage is deepening. It is an irresponsible a”t," Joyti Baniya, general secretary of Consumers´ Rights Protection Forum, told Republica. He also claimed the workers put forth different demands as the possibility of fuel adulteration has reduced after the government fixed equal price for diesel and kerosene. Meanwhile, Petroleum Dealers´ Association, the umbrella body of private refilling stations, has called agitating workers for talks on Wednesday. Source: www.myrepublia.com Date: December 2, 2009

Exhibitors thrilled by response Exhibitors at the Electro Tech expo said that they were receiving a very good response from the general public and retailers wanting to expand their business links with new wholesalers. On the second day of the show, most of the visitors were found to be acquiring information about new electrical products and some were even pressing exhibitors to sell them products that were only meant for display.

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"We did not sell any products yesterday; but due to customer demand, we started selling them from today," said Om Prakash Joshi, manager of Samiksha Enterprises. He said that visitors wanted to buy new products at the wholesale price or at a discount. According to the exhibitors, visitors have been crowding stalls showcasing invertors, CFL bulbs, electric vehicles and new products and stalls offering various discounts or goods at wholesale prices. Exhibitors are offering discounts of up to 50 percent on a number of products such as invertors and CFL bulbs. "We have offered up to 15 percent discount on our electric products, and attraction for power-saving products is high," said Apekshya Shrestha, a representative at the Philips stall. Sabita Adhikari, an employee of the Agricultural Development Bank who was going from stall to stall looking for CFL bulbs and a solar panel said, "We get quality products at a reasonable price at these kinds of expos, that's why I am here." However, Sunita Shakya, a housewife from Chabahil, was a little bit disappointed as she found that most of the stalls had showcased products only for promotional and marketing purposes. "It would have been better if the customers were allowed to buy products of their desire on the spot," she said. President of the Nepal Electrical Association and coordinator of the event Govinda Kandel said that sale of goods was not the purpose of the show. "But if any stall wants to sell its products, there is no restriction on it," he said According to the organiser, the expo has become an excellent platform for manufactures, importers, wholesalers and retailers apart from the general public. It is estimated that around 70 percent of the visitors on Tuesday were people associated with the electrical business. "What is the price of this CFL?" asked Madan Madhikarmi, a retailer from Bhaktapur, to Rakesh Rajbanshi, a representative of Annapurna Electricals, which has put on display various types of Raathi electrical products. After a brief discussion, Madhikarmi bought a CFL bulb that switches on automatically in the dark. Madhikarmi said that he had visited the expo to see new products in the market, and to meet new wholesalers so that he could contact them in the future to do business. However, most of the exhibitors said that the expo had failed to attract big customers such as banks, hospitals and corporate houses who were potential buyers of large electrical equipment such as generators, invertors and online UPS. Kandel said that the targeted visitors were mainly ordinary consumers, and that the expo was witnessing higher footfalls everyday. He said that more than 12,000 people visited the show on Wednesday alone. Source: www.ekantipur.com Date: December 2, 2009

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GENERAL: 16 arrested for protesting outside Indian embassy in Nepal Maoist leader Baburam Bhattarai on Wednesday protested against a 19th century treaty between Nepal and India, describing it as an unequal pact, even as 16 people were arrested for demonstrating outside the Indian embassy here in protest of the agreement signed in 1816. CPN-Maoist vice chairman Bhattarai said the Sugauli treaty signed between Nepal and the British-India government was a blow to Nepalese nationalism. “It was a treacherous treaty imposed upon Nepalese people by the foreign powers which is also unequal,” Bhattarai said at a symposium on the 194th anniversary of the signing of the treaty. Nepal had signed the treaty with East India Company government on December 2, 1816 after she lost Nalapani war to British India government. Under the treaty parts of Nepal’s territory were merged into British India. Meanwhile, 16 people protesting outside the Indian embassy were arrested, after they blocked the gate and shouted slogans demanding the repeal of the Sugauli treaty. A group of protestors led by United Nepal National Front had staged the demonstration and the protestors also tried to hand over a memorandum to the Indian Embassy. UNNF President Fanindra Nepal, who led the protests and over a dozen other people were detained by the police. Bhattarai also said there was need to check the “growing foreign intervention” in Nepal as “many unequal treaties have been signed after the Sugauli treaty”. Attacking the government on the issue of the revival of the Pancheshwor power project treaty with India, Bhattarai said: “Whenever there is weak government in Nepal, foreign powers try to impose agreements in their favour”. The Pancheshwor Treaty was agreed between Nepal and India in 1996 for the construction of 3,200 MW electricity plant and providing irrigation benefits to both Nepal and India. Nepal and India have recently agreed to move it forward by setting up a Pancheshwor Project Directorate in Nepal. Bhattarai also said that regressive forces were hatching a conspiracy to dissolve Constituent Assembly to foil the process of writing the constitution. Source: www.experssindia.com Date: December 2, 2009

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Two in police net for looting paddy Police on Wednesday arrested two UCPN (Maoist) activists on the charge of looting paddy from a farmer at Rajapur Tappu region in Bardia. Dharmaraj Neupane, police chief of Rajapur Tappu region, said Kamal Raut and Magaru Tharu were arrested for looting 50 quintals paddy from Dipa Rana of Patabhar VDC-7 on Friday. They were taken to the District Police Office in Gulariya for investigation. After the Maoist cadres started seizing paddy from farmers in Rajapur Tappu region, the district administration had recently directed police to arrest the Maoist activists who were involved in crop confiscation. The authority has also mobilised security personnel at Rajapur Tappu to stem the Maoist excesses. On the pretext of assisting the party’s struggle to establish civilian supremacy, Maoist activists, in recent times, are forcibly collecting paddy from farmers in Bardia, Dang and Banke districts. Meanwhile, district administration, Dang, has received 37 applications from locals of Ghorahi and Tulsipur demanding security of their properties after the Maoists started looting paddy and collecting ‘donation’. “We can no more safeguard our properties from the Maoists and want the authority to make security arrangements,” said Lokmani Giri of Maoist Victims’ Association. Many people in the district have reported having received death threats from the Maoists for declining their demand. Source: www.ekantipur.com Date: December 2, 2009 Maoists to send disqualified home The Unified Communist Party of Nepal (Maoist) has decided to ´unilaterally´ discharge the disqualified combatants and has asked the UN country team to develop a discharge plan, said Maoist leader Janardan Sharma. A meeting of the standing committee of the UCPN-M took the decision after Maoist leaders could not agree on proposed rehabilitation packages developed by the Peace Ministry and the UN country team. The packages have proposed vocational training as well as formal and informal education for the disqualified combatants but no cash incentive as sought by the Maoists. "We have decided to ask the disqualified combatants to return to their homes," said Maoist leader Janardan Sharma, who is also a member of a high-level committee formed to oversee the discharge process. "Once the UN gives the discharge plan and date, our party will discharge the disqualified on our own." Begun on October 11, the discharge process had been uncertain after the Maoists rejected the proposed rehabilitation packages. 19


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There are altogether 4,008 combatants disqualified by the United Nations Mission in Nepal (UNMIN), including 2,973 minors. The discharge of these combatants is a part of the peace process. "We have been publicly portrayed that we have been demanding cash for the disqualified. We decided not to accept the [proposed] rehabilitation package so as to send a message that we were not after money for the combatants," Sharma told Republica. Sharma said the government and the UN will be allowed to monitor the discharge process even if his party is unilaterally discharging the disqualified combatants. "But our party will welcome any rehabilitation package to the disqualified [even after the unilateral discharge]," said Sharma. Source: www.myrepublia.com Date: December 2, 2009

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