Marred by uncertainty

Despite being self reliant, the plywood industry face a hard time


Sujata Awale
Kathmandu

With the ongoing protest in Tarai, the plywood industry is facing a hard time. Ninety per cent of the total factories are not operational for a month now due to continuous bandh. With low production, the market is gradually witnessing a shortage of products. The industry which was going through a difficult situation since the earthquake, is further marred by the Tarai unrest.

Moreover, the sluggish real estate industry, stagnant economy and political instability have led to a dip in demand.“We face difficulties in distributing products in the market as our factories are not operational due to the strike,” said Devananda Sarawagi, Managing Director of Sarawagi Ply Industries. He further added, “The economy is stagnant and the real estate business is not doing very well.

Also, the plywood market is competitive. All these factors add to our burden.” Citing that they used to export plywood to India, he said, “With the existing situation and other problems, we have not been able to export for a year now.” Sarawagi stated that political stability is must to spread positivity in all industries. He further said, “The industry also faces problems of labour and load shedding that ultimately hikes  the cost of production.”Utis tree which is regarded as soft wood is the main raw material for plywood manufacturers.
These trees are generally found in Ilam, Phidim, Panchthar, Dhankuta, Hile, Sindhupalchowk, Dolakha among others. Additionally, other needed raw material and chemicals are imported from India.

“We are witnessing a growth in demand of five to six per cent every year. However, this year, we feel that the business will face losses due to the political instability,” said Pradeep Chaudhary, Vice President of Nepal Plywood Manufacturers Association (NPMA). Citing that the plywood industry is self reliant, he said, “Domestic manufacturers are producing various grade products such as A, B, C and D as per their usage. And three per cent of total production is exported to India.”

According to the NPMA, there are 50 plywood manufacturing factories which directly employ 10,000 employees. Chaudhary further informed that five other companies are in the pipeline for investment in the sector. Citing that there is unhealthy competition in the market, he stated, “Duplication of logos is the main problem. Many companies copy from established brands and sell low quality products at low price which creates imbalance in the market.” According to him, the industry has Rs seven billion turnover annually while still operating at 60 per cent of installed capacity.

Lack of skilled manpower, problems of trade union and load shedding are other hassles faced by the industry. “We have a severe crunch of skilled manpower in the country. Every year we have to import skilled manpower from Bihar and Uttar Pradesh,” he informed. 

“The business of plywood has dipped by as much as 50 per cent at present due to the ongoing strike in Tarai and as an effect of the earthquake,” said Ganesh Pokharel, Proprietor of Shikar Trade Link. He said that as the government has banned the construction of residential buildings, it directly affected the demand for plywood. 

According to him, plywood is basically used for manufacturing furniture and shuttering while constructing buildings. Citing that the supply has also dipped, he said, “The demand for furniture has gone up but we could only fulfill 30 per cent of that due to the bandh.” 

According to him, earlier they used to supply five trucks of plywood a month.Pokharel said that Kathmandu comprises 51 per cent of the market for plywood business and other parts of the country account for 49 per cent. Stating that customers are not aware about quality, he said, “Customers seek affordability rather than quality. 

This allows many unprofessional players to penetrate the market.” There are branded products such as Duro, Mayur, Sagun, Surya, Greenply, Himalayan et cetera and local products in the market as well which differ in price by 40 per cent.

Published on September 20, The Himalayan Times, Perspectives
http://epaper.thehimalayantimes.com/epapermain.aspx?queryed=9&eddate=9/20/2015

Is Pancheswhar multipurpose project heading in the right direction?

Photo Courtesy: Mahendra Bahadur Gurung

Sujata Awale

Kathmandu

The Mahakali Treaty between Nepal and India was signed in 1996 and the main highlight of the treaty was to develop the 6,720 MW Pancheshwar Multipurpose Project (PMP). Though discussed and talked about the many benefits which include hydropower, irrigation, fishery, flood management, et cetera, the project never really budged until 2009.

In 2009, a Joint Committee on Water Resources was formed which was headed by energy secretaries of Nepal and India. Held in Pokhara, that committee agreed to construct a re-regulating dam, Chief Executive Officer (CEO) nomination through open competition and establishment of a project head office in Mahendranagar.

However, it was only in July 2014 with the Indian Prime Minister Narendra Modi’s visit to Nepal that the project gathered full steam with commitment to develop the PMP on a 50/50 sharing basis. To push forward this mega project, both governments decided to establish a eight member Pancheshwar Development Authority (PDA) in November 2014 and with both energy secretaries as co-chairpersons. Of the eight positions, Nepal got to appoint the position of CEO, Legal Executive Director, Environment Executive Director and Administration Executive Director, while India got the post of Acting Chief Officer (ACO), Technical Executive Director, Finance Executive Director and Rehabilitation and Resettlement Executive Director.

Nomination conflict
It was decided to complete filling these executive member positions by September 2014 but due to conflict of interest in the nomination process it has been delayed by almost a year. While Nepal was lingering in the appointment process, India, as per the Memorandum of Understanding (MoU) initiated a detailed project report (DPR) by WAPCOS.

Though the CEO was to be appointed through free and fair competition, Energy Minister Radha Gyawali appointed Mahendra Bahadur Gurung as the CEO on June 5. Likewise, Dilip Kumar Sadaula was appointed Environment Executive Director, Rudra Sitaula as Legal Executive Director and Babu Ram Adhikari as Administration Executive Director. On the other hand, the Indian side nominated executive directors through free competition.

“Although Nepal has appointed the CEO, it could lead to a loss for the country,” said DB Singh, Former Director General of the Department of Electricity Development. Singh who is also a Former Project Director of Pancheshwar Project, further said, “PMP is a mega storage type hydropower project.

But either due to the government’s ignorance or indifference, it has nominated an irrigation engineer as CEO for this massive hydel project who is himself ignorant about the issue.” Comparing the appointees from the Indian side, he informed that both ACO and Technical Executive Director are experienced hydro engineers with a proven track record.

To lead a multilateral mega project experience and technical know how is a must. Singh said, “For a football match if you send basket ball players what can you expect? This is what the government has done by choosing an inexperienced CEO for such a major hydro project.” He further pointed out that due to lack of political will and vision among team players even in 1999 that led to the Nepal-Indo Joint Project Office collapse in 2002 without finalising the DPR. “I suspect the PDA will face the same fate as again the government has nominated the wrong person,” he opined.

On this, CEO of PDA Mahendra Bahadur Gurung said, “Pancheshwar is a multipurpose project that includes hydropower, irrigation and flood control. As I have served in these three sectors as the director general, it would not be fair to question my ability and experience.” He further said, “I was on a decision making role in previous posts which made me more competent for this post and I believe I will run this project smoothly.”

Project prospects

PMP is a bi-national storage type hydropower project to be developed on the Mahakali River bordering Nepal and India. The 6,720 MW project will produce an annual average energy of 12.32 billion units and a live storage of 6.56 billion cubic metre of fresh water.

There will be equal sized underground power houses of 3,240 MW constructed on each side of the Mahakali river in India and Nepal. Moreover, the project will also offer benefits of regulated water for irrigation in Nepal and India and control flooding.

Singh informed that the project cost is determined at Rs 500 billion as per the DPR conducted by the Pancheshwar Project in 2006-07.

According to him, Nepal can get benefits of Rs 34.50 billion from electricity, Rs nine billion from fisheries, Rs 5.55 billion from irrigation of 93,000 hectors of agricultural land, Rs 4.42 billion from carbon trading and Rs four billion from other benefits.

“The total of benefits after project construction will be Rs 53.41 billion which should not be decreased by any means in the present context,” he stressed. However, it is presumed that the project will dislocate 22,765 people on the Nepali side and 60,000 people on the Indian side.

“PMP is a highly economically viable project which can create a big difference in terms of electricity production, water issues, investment scenario and psychological effect,” said Bishal Thapa, Vice Chairman of the Energy Development Council. However, he pointed out, “The project has been talked about since the last two decades but it has not gone smoothly.

For the smooth run of the project, political space and backing for implementation is a must. Both countries political leaders should acknowledge this fact about the benefits and put this project on high priority.”

Stating that the formation of PDA with a full committee is a good sign, Thapa further said, “Formation of the authority is not the end point for development of the project. From past experience, we have realised that those heading the project had no voice.” He stressed that the head of the authority should have the capability to communicate clearly and strategically, be more proactive than passive and reactive. According to him, Nepal should learn from the past and not repeat the same mistakes.

The project demands strong political will, studying of the situation and tie up with not only the central government of India but also with the state government at the project area.

Crawling ahead
With the appointment of the CEO work for the project head office has started. According to Gurung, they are planning to establish a Corpus Fund of IRs 200 million from each country. He said, “WAPCOS is working on the DPR and as the executive committee has been formed we will conduct meetings with them and scrutinise technical aspects.” He said that the DPR will be finalised on November 2015, two months later than the stipulated date.

Optimistic about project implementation, Gurung targets to at least finalise the DPR, procurement of work and laying the foundation in his three year tenure. Citing that it is a dream project of both countries, he said, “Political will is most important to implement the project.”

As per the MOU between Nepal and India, the CEO and Finance Executive Director will not be from the same country. The tenure of each member will be three years with rotation between Nepal and India for the CEO.

Published on The Himalayan Times Perspective on September 13

 

  http://epaper.thehimalayantimes.com/epaperpdf/1392015/1392015-md-hr-17.pdf 

Furniture business hit by political unrest

Traders worried about the festive Season as products are stuck at different customs

Himalayan News Service

Kathmandu

Be it domestic manufacturers or importers of furniture, both are facing a tough time due to the unrest in Tarai. Manufacturers are hassled  by the lack of raw material, which largely comes from the Tarai, while importers don’t have options other than importing furniture through the border (Tarai). Moreover, furniture traders are also worried about whether they will get to import products for the festive season, which is the prime time for business. According to traders, the sale of furniture will dip significantly if they do not get products on time.

Citing that the furniture market witnessed 15 per cent growth last year, President of Nepal Furniture and Furnishing Association (NFFA), Kabindra Joshi said, “We doubt we can retain the same growth this year due to the ongoing strike in Tarai.”  Informing that around 50 containers with furniture are stuck at various custom offices in Tarai due to bandh, he said, “We were compelled to postpone our annual Furnex Expo 2015 that slated for October 1.” Stating that the furniture business was not affected by the earthquake, he said, “If the Tarai bandhs continue, it is for sure the industry will be hit hard. However, we are hopeful that the situation will be back to normal soon.”

Citing that the furniture industry is becoming dependent on imports, Joshi said, “Due to lack of skilled manpower, electricity and other raw material, domestic productions are gradually declining and traders are now attracted towards importing readymade products.” According to him, China, Thailand, Malaysia and America are prime countries from where furniture is imported.

The Nepali furniture market is separated into three segments — domestic, Chinese and branded products. Affordable pricing, aesthetic look and fine design are reasons why customers are gradually opting for imported furniture. However, the charm of domestic products is still alive owing to its durability, quality and design. According to him, 60 per cent of the furniture market is dominated by imported furniture whereas domestic furniture enjoys 40 per cent market share.

Marketing Director of Bira Furniture at Patan Industrial Area, Sarju Shrestha said, “We have not been able to import raw materials due to the bandh whereas the business was already affected by the earthquake.” Informing that the demand for furniture dipped during the earthquake, he said, “We are optimistic about the upcoming festive season only if the Tarai unrest is resolved.”

According to him, local, branded and Chinese furniture have their own separate markets with their individual merits and demerits. “There will be price hike in furniture products by 10 to 15 per cent for domestic products owing to labour crisis and lack of raw material available due to the present situation,” he added.

“The demand for branded furniture was down for the last two months because of the earthquake,” said Nikhil Tuladhar, Marketing Manager at Index Furniture, adding that the business is hit hard due to the bandhs as products are stuck at Birgunj Customs. Tuladhar further said, “Customers are aware about branded products in furniture and value them for quality and design.”

Published on THT Property Plus, September 12

http://epaper.thehimalayantimes.com/epaperpdf/1292015/1292015-md-hr-14.pdf  

 

Carrying traditional essence and safety together

Lack of periodic restoration and maintenance of structures is the major cause of structural weakness

Photo: THT

Himalayan News Service

Kathmandu

 
Many traditional buildings either collapsed or were partially damaged by the deadly earthquake of April 25. After the quake people have developed the feeling that a reinforced concrete building is much durable and quake resistant than traditionally built buildings. However, experts stated that both traditional as well as modern buildings can be durable and earthquake resistant if built adopting seismic resistant technology.

Any structure built violating or without taking care of the engineering norms are vulnerable to possible damage by quakes. Professionals stated that even  masonry buildings following norms can last for many decades. However, such structures build by neglecting structural strengthening, addition of stories without considering its capacity to bear load are the main cause for their collapse.

There is a clear indication that lack of periodic restoration and maintenance of structures had a major affect on the endurance of structures during earthquake. “People were not aware about periodic structural strengthening and retrofitting of their houses,” said Senior Structural Engineer Rajan Suwal stressing on the need to have a periodic study on the condition of structures and conducting restoration with updated traditional techniques to sustain the buildings. According to him, the government should learn a lesson from the past and should work to strengthen the existing buildings.

“One should not feel that traditional buildings are weaker than reinforced buildings as both structures have withstood and collapsed as well during the quake,” Suwal said, adding that it depends on the techniques being used to construct the building. He stressed on the need to restore traditional buildings to preserve the essence of the culture.

Citing that there could be shortage of required construction materials like timber, traditional styled bricks, mud with workmanship to rebuild massive structures, Suwal said, “The government should give priority to reconstruction and give subsidies if anyone wants to build their residential houses in a traditional way.” Stating that there is a lack of skilled manpower to work with traditional structures, he said, “If the government prioritises work and provides training, the available resources will be enough to work promptly.”

“The raw material and quality of products are a challenge to build masonry buildings,” he said, adding that timber being expensive, the government should work to make it accessible. According to him, constructing traditional house becomes 25 per cent more expensive than constructing using reinforced building.

Researcher in Structural Earthquake Engineering Dipendra Gautam said that reuse of rubble can contribute to restoration of traditional buildings. “We have found that the majority of masonry buildings failed to tie middle walls and front walls and that resulted in their  fall,” he said, adding, “In this regard, if the binding component is done properly, most traditional buildings can be safe and long-lasting.” Moreover, he said that introducing seismic strengthening technology to abide two walls with steel rebars can increase the durability and sustainability of the building.

According to Gautam, the government should conduct special research on typical Nepali styled traditional masonry buildings as the National Building Code lacks specific parameters and design. Pointing out that there lacks timely maintenance and repair works on traditional buildings, he said, “It is very important to elongate the life of these buildings. And the other silly mistake that we all make is haphazardly piling up storeys, which weakens the building.”

Citing that the traditional look of heritage sites and the city is important for preservation of the ancient art and architecture, he said, “The government should focus on maintaining traditional buildings and take out the framework to reuse available construction materials and seismic strengthening technology.”

Published on September 5, 2015, The Himalayan Times THT Property Plus

http://epaper.thehimalayantimes.com/epaperpdf/592015/592015-md-hr-14.pdf 

 

Individual houses in growing demand

Delay in revised NBC and Building Bylaws leave developers in dilemma 

Himalayan News Service
Kathmandu
After the April 25 earthquake, real estate developers have witnessed a significant growth in inquiries for standalone houses. According to developers, customers are now more aware about structures built in a planned way, safe neighbourhoods and well designed houses. Although inquiries and demand for standalone houses is on the rise, developers have not been able to cashin on the opportunity. Developers are compelled to put on hold new projects as they await the revised National Building Code (NBC) and Building Bylaws, which the government is yet to introduce.

“We have taken the earthquake as an opportunity to expand our business,”  said Rupesh Mahato, Deputy General Manager of Green Hill City, adding that they are concerned about the safety of the houses they build. Citing that inquiries for standalone houses have significantly increased, he said, “People have realised the importance of safety that housing colonies provide.”

As the government is yet to introduce the revised NBC and Building Bylaws, he said that customers are in a dilemma whether to place bookings or not at the moment. “With the growing demand, we see brighter future prospects for individual houses,” he shared.

According to Mahato, they have witnessed significant growth in inquiries for properties at Green Hill City, Jorpati. He further said that they have two new projects in the pipeline which are on hold till the new policy arrives. Stating that the price of these houses will not hike much, he said, “As the government’s policy will direct us to maintain more open spaces, mandatory road width and greenery in our projects, it will surely lead to a hike in the price of properties. However, the hike in price will not be severe.” The minimum price of these houses starts at Rs nine million.

Citing that the demand for individual houses after the quake has grown, Bhim Kharel, Advisor of Civil Homes, said, “Over two dozen houses  have been booked post-earthquake and we have been receiving constant inquiries for the same.” According to him, they have opened bookings for individual houses at Civil Homes Phase VII, Sitapaila and two of their projects are in the pipeline. He informed that they have not revised the prices of these houses till date and the starting minimum price of their standalone house begins at Rs 10 million.

“The government’s announcement to develop a smart city has conferred us an opportunity to expand projects outside the valley,” said Kharel.  According to him, the price of the upcoming projects will depend on the revised NBC, minimum evaluation of land, cost of raw material, manpower and home loans.

The government was supposed to introduce the revised NBC by July, how-ever, it has not been introduced yet. “We are working to introduce the revised policy and we will soon send it to the ministry for approval,” said Parikchit Kadariya, Section Chief of the Building Code Section at Department of Urban Development and Building Construction.

With the delay in introduction of the policy, developers as well as end users are hassled. “We are holding up our land acquisition process for three new projects just to make sure that our projects won’t defy the upcoming laws,” said Bijay Rajbhandary, Chairman of CE Construction. Citing that inquiries have grown by 100 per cent as compared to the corresponding period last year, Rajbhandary said, the price of individual houses would go up by around 30 per cent with the introduction of the new policy. He also assumes that two and a half storeyed houses built in four to six annas of land will be in demand.

Published on August 15, 2015, The Himalayan Times

http://thehimalayantimes.com/real-estate/individual-houses-in-growing-demand/

Unrefined situation

Limited market and maximum players has the edible oil industry on fire

Sujata Awale

Kathmandu

Despite Nepal being an agriculture based country, the oil industry of the country is totally dependent on imports for necessary raw materials. The demand for refined oil increases by 15 per cent every year which is inversely proportional to the demand of mustard oil. Health consciousness, developing fast food culture and increasing restaurants are major reasons for the increase in demand for refined oil.

Growing demand

"The market for oil is increasing every year with growing purchasing power and awareness about the goodness of refined oil," said Manish Kumar Agrawal, Senior Vice President of Nepal Vegetable Ghee and Oil Manufacturers Association (NVGOMA). However, he added that it is still not sufficient to sustain the remaining dozen or more factories in the country. There are altogether 20 factories across the country, of which only 16 factories are operational. According to NVGOMA, total installed capacity of these factories is 350,000 metric tonnes annually while the market consumption of oil remains at 250,000 metric tonnes.

Citing that Nepali oil was exported to India in the past, he said, “With the introduction of a new policy which entails a supplier to seek prior permission from the government of India, export from the country has come down to nil.”

The question on the quality of edible oil is raised time and again in the market. On this, Agrawal said, “As industrialists have to register the company and product before marketing, we are responsible for our products. However, because of the porous open border smuggling of lower quality products is rampant which leaves no room for accountability,” adding that the Nepal Standard and Nepal Food Quality Control should monitor the market strictly.

According to him, the factory price of soybean oil and sunflower oil for 10 litre packs is Rs 1,070 and Rs 1,009 respectively.

Major hurdles

Despite the growth in demand, industrialists stated that they are facing a hard time as there is cut throat competition among the players. Limited market with maximum players has invited over production and oversupply of edible oil in the market. As the industry depends upon imports, dollar inflation and price of raw materials in the international market directly affects the price of the product in the domestic market. Moreover, like every other industry, the oil industry also faces severe power crisis which ultimately increase the cost of production.

"The government is providing 50 per cent subsidy on 13 per cent VAT and five per cent custom duty since the last six years which has helped the domestic manufacturers survive,” said Sanjeev Kumar Agrawal, President of NVGOMA. However, he further said, “Despite the subsidy, the duty totals to nine per cent which is 2.5 per cent more than taxes in India. Nepali products are not competitive when compared to Indian products which is why traders trade oil illegally from the open borders.” Moreover, he said that the government should step forward to minimise power cuts and put a stop to the undeclared syndicate system in transportation to boost the industrial sector and to make it more competitive in terms of price.

Informing that 20 years ago domestic production of mustard was sufficient for the domestic consumption of oil, Sanjeev said, “With the introduction of VAT in mustard oil, farmers gradually stopped cultivating mustard and soybean for oil production and now we rely 100 per cent on imports for production.”

Room for growth

Stating that the oil consumption in Nepal is still nominal standing at 4.5 kg per person annually, Kumud Dugar, Managing Director of KL Dugar Group said, “There is a scope for growth for the oil industry in days to come. However, the government should solve the problems of power shortage and unauthorised trade of oil.” 

According to him, 30 per cent of products are smuggled through open borders. Citing that the public is still unaware about quality and brands, he said, “The government should initiate campaigns to raise awareness among consumers' about quality. Moreover, the government should take strict action against manufacturers found guilty of substandard products.” Dugar claimed that the company enjoys 25 per cent market share in the edible oil segment.

Industrialists stressed on the need to conduct intensive campaigns and long term plans for the agricultural sector to increase seed cultivation in the long run. Reportedly, Argentina, Brazil, Canada, Russia, Malaysia and Indonesia are major countries for imports of crude edible oil and seeds; raw material necessary for the industry. 


Published on August 9, 2015, The Himalayan Times, Perspectives 

Power producers lament “worst budget”

Ratna Sagar Shrestha/ THT

Sujata Awale

Kathmandu

The bold announcement that the government made to end the power crisis within three years now seems next to impossible as the budget has not prioritised the energy sector. Though the energy sector can rejuvenate the country’s economy by managing the trade deficit, generating more employment opportunities and enhancing the living standard of people after the destructive earthquake, the government seems indifferent to problems relating to the sector.

As many as 19 independent power producers’ projects directly suffered damage and 14 projects came to closure which resulted in 40 MW power disrupted from connecting to the national transmission grid. Stakeholders said that the government has not offered any relief package and incentives for the energy sector in the budget.

WHAT’S IN THE BUDGET ?

The government has allocated Rs 45.72 billion for hydro-power production, transmission and distribution and Rs 5.49 billion for alternative energy. Though the budget ceiling has been extended as compared to last year, stakeholders said that the allocated fund is not disseminated properly. “The budget does absolutely nothing to address the energy needs of Nepalis in this fiscal year. It did not take a single measure to bring more electricity into the homes of Nepalis,” said Sujit Acharya, Chairman of Energy Development Council. He further said, “Instead of working to reduce the consumption of imported cooking gas or imported petroleum products, the government wasted taxpayer’s valuable resources in funding projects that will probably take 20 years to complete.”

Pointing out weaknesses in the budget, Acharya said, “The Ministry of Finance does not seem to understand that the energy sector budget heading needs to make an impact on the energy situation of all Nepali’s living in Nepal.” He opined that the energy sector would have been positively impacted if the budget announced zero duties on electric vehicles and electric cooking stoves which would have made many people less dependent on petrol and gas based products.

As per the budget, Rs two billion has been allotted to complete the Upper Tamakoshi Hydropower Project within two years. Similarly, Rs 3.37 billion is appropriated to initiate the first phase of construction work of the 1,200 MW Budhigandaki Hydropower Project and additional budget will be made available to the project depending on its work progress.

The government will also start construction of Tanahu Hydropower Project (140 MW) and detail design of the Nalsinghgadh Hydropower Project with a budget of Rs 470 million. The budget provides for accomplishment of required preparatory work for the commencement of the implementation of Pancheshwor Multipurpose Project and the construction of West Seti Hydropower project that will be initiated through the attraction of foreign direct investment.

“This fiscal budget is the worst budget ever for the energy sector,” said Gyanendra Lal Pradhan, Chairman of the Energy Committee at the Federation of Nepalese Chambers and Commerce Industry. He questioned, “Where is the commitment that the government made earlier to eradicate load shedding within three years?” Citing that the government could make it more in favour of development of the nation in this harsh situation, he said, “This year’s budget has come as a confused budget over the earthquake and its issues. It could have been the most effective budget for the energy sector to boost recovery of the nation.”

THE MISSING POINT

According to Pradhan, the budget plans only to provide shelter to the earthquake victims without electricity. He said, “The development of the hydropower sector means more employment opportunities, lights to households and it could also slash the trade deficit of the country by reducing consumption of petroleum products.” He added that the budget allocation of Rs 4.85 billion for portable metallic rocket stoves for the family of earthquake affected districts is the only positive thing.

“There is nothing new that the budget has addressed for the energy sector,” said Khadga Bahadur Bisht, President of Independent Power Producers Association of Nepal. Citing that the budget is abstract, he said, “There is no concrete statement on how and what facilities and concessions will be continued from the earlier budget which is creating confusion among developers.” Complaining that the government has no provisions for projects affected by the earthquake, he said, “We have requested the ministry to address the problem by making provisions to provide soft loans to rehabilitate these projects. This was not addressed.”

According to him, the announcement that transmission lines be constructed through Build-and-Transfer method including the private sector under the National Transmission Grid and commitment to establish an Electricity Trading Company for national and international electricity trade are positive aspects of the budget. “With the establishment of the Electricity Trading Company, the path will be paved for power trade with India,” he asserted.

For the construction of transmission lines, the government has allocated Rs 12.73 billion and committed to solve the problem of land acquisition and tree logging in a coordinated way. NIDC Development Bank and Hydropower Investment and Development Company will be restructured to make these organisations capable of increasing investment in infrastructure.

UNATTENDED URGENCY

The private sector is unhappy with the budget not addressing current issues and problems of the energy sector and the Ministry of Energy (MoE) has also agreed to it. “As we had prepared the budget proposals by the end of March, the budget did not include any of the problems that appeared post disaster,” said Sameer Ratna Shakya, Joint Secretary at MoE. He further said that the budget is bigger in size than the previous year and will benefit projects in the long run.

Informing about relief packages for earthquake affected projects, Shakya said, “Relief packages and provisions will be addressed through the Reconstruction Authority.” According to him, 456 MW Tamakoshi Hydropower Project which was supposed to be completed this fiscal will be completed by the next fiscal due to the earthquake. He further said that it will hamper the target to curtail power cuts to eight hours this fiscal.

Assuring that the government will create a favourable environment for the development of the sector, he said, “Both the government and private sector should fulfil their responsibilities.”

Published on The Himalayan Times, THT Perspectives July 26

http://thehimalayantimes.com/business/power-producers-lament-worst-budget/

 

Prefab gaining popularity

 Market for prefab products witnessed 30 per cent increase

 

Himalayan News Service

Kathmandu

After the earthquake that hit the country, the demand for prefabricated homes often referred to as prefab houses is on the rise. Traders claimed that demand has risen by as much as  30 per cent post earthquake. Less time consuming for constructing the structure than traditionally built buildings, light weight, environment friendly, reliable, easy to assemble and dismantle are some key features that have attracted customers  to these products. 

Prefab homes are manufactured off-site in advance using precise engineering. The components are then easily shipped and assembled. Prefab homes were introduced here more than a decade ago, however, they did not appeal to public for residential purpose. After the devastating earthquake struck, people are now gradually taking prefab into consideration owing to safety reasons. As the demand for prefab houses has increased in the market, many new players have also entered into the market.

“Previously, prefab houses were used only in projects like hydropower, schools, colleges, organisational buildings et cetera. But now, people are gradually using it for residential purposes in earthquake affected districts,” said Narendra Maharjan, Business Development Manager at Arati & Company. Citing that the price of prefab houses depends upon design and material, he said, “We have constructed 50 two-bedroom houses in Sankhu where most of the houses collapsed during the earthquake at Rs 250,000. The price may differ with the requirements of customers and design.”

 

According to him, they  face a material and man-power crunch due to the rise in demand. Citing that the government has decreased custom duty on prefab imports, Maharjan said, “This is indeed a positive step towards prefab and will certainly assist in making products more affordable to the general public.” He further said that the earthquake has created a good business opportunity and many companies have put their hands into prefab houses.

“The earthquake has widened the scope for prefabricated products in the market. The traditional mindset that prefab is only for temporary structures is gradually changing,” said Sailesh Sthapit, Site Supervisor at Bira Furniture, which also offers prefab houses.

According to him, the prefab market has witnessed 30 per cent growth after the earthquake. Citing that there is no competition in terms of products, he said, “Though many players have entered this business, they have their own product lines like UPVC, wooden boards, cement, PU boards et cetera. So the competition is healthy.”

Prefab panels are available in different sizes and types. Panels can be obtainable in two- and three-inch thickness. EPS sandwich panel, rock wool sandwich panel, pu sandwich panel, corrugated steel sheet, fibre cement board, et cetera are materials that are used for wall, roof, ceiling and floor. Reportedly, customers prefer cement panel boards which lasts for 30 years.

“We have witnessed maximum inquiries after the quake, however, we do not have as much business as expected,” said Nilmani Sapkota, CEO of Himalayan Prefab. He further said, “As the government is due to introduce a revised National Building Code, people are still in wait and watch mode to decide for construction.” 

Citing that the exemption of custom duty for prefab is a positive decision, he said, “Prefab is still expensive when compared to other materials. Owing to its utility, the government should work to make it more affordable.” Moreover, he stated that manufacturing prefab panels in Nepal still cost 15 per cent more than imports. According to him, the price of prefab panels starts at Rs 1,100 per sq ft which can go up depending upon quality and design.

Traders mainly import prefab panels and boards from India and China. Prefab structures are reportedly also being preferred especially by resorts, schools, colleges, hotels, cafés, showrooms, party palaces and other project sites including residential buildings.

Published on July 25, The Himalayan Times, THT Property Plus

http://thehimalayantimes.com/real-estate/prefab-gaining-popularity/ 

Way to planned urbanisation

 Developers find the budget promising, but still doubt its implementation

Sujata Awale

Kathmandu

After facing huge loss of human settlements and lives owing to haphazard urbanisation on April 25 earthquake, the budget for the fiscal year 2015-16 has adopted various measures to ensure planned urbanisation. As per the budget, land will be allocated to develop new residential colony or settlement by implementing land use policy. Individuals and companies will require prior approval from local authority for plotting the land for residential purpose. Moreover, settlement development will be permitted by ascertaining easy access of basic infrastructures. And integrated and organised settlements will be developed by transferring those areas that were geologically eakened by the earthquake where there is no possibility of resettlement.

The government promises to introduce the provisions to allow foreign nationals to purchase apartments with an ease. The government plans to prepare the master plan to develop Kathmandu valley, Lumbini region and Nijgadh as a smart city. Moreover, budget has allocated for the infrastructure development of 10 modern cities in Mid-Hill highway. 

Real estate developers said that the budget has provided proper provisions to develop new settlements in planned way. “We have been demanding for mandatory provisions to develop managed settlements and planned urbanisation from the beginning. After incurring huge loss of properties in the earthquake, the government is working towards having smart cities and well planned settlements which is praiseworthy,” said Om Rajbhandary, Third Vice President of Nepal Land and Housing Developers’ Association. He further said that the budget has mentioned every aspect to construct new structures in planned way. “Implementing land use policy for residential area, incorporating earthquake resistant designs, mandatory approval for land plotting, strictly enforcing building code and building by-laws to regulate unorganised urbanisation is a step forward to have safer cities,” he added.

Rajbhandary said, “The government announcement to provide refinancing facility and interest subsidy under central bank for the sectors including earthquake affected residential home and businesses have further relieved in the sector,” adding that Nepal Rastra Bank has already announced the measure to have loan rescheduling.

Despite all these positive  commitments, real estate developers still doubt as many commitments in previous budget were merely confined in books. “The government should finalise the directives within the first quarter of this fiscal year in order to implement these policies,” said Rajbhandary, adding that it will also help developers to plan new projects as per the requirements. He further stressed on the need for the implementation of the promised provisions. Being optimistic about the scope of the sector in days to come, he said, “The government has provisioned to have Rs 2.5 million loans to construct completely damaged houses which will create employment opportunities as well as increase the volume of the new housing products.”

“The announcement of the government to allow foreign nationals to purchase apartments with easy process has provided  some relief to apartment evelopers as many developers have suffered by the earthquake,” said Bijay Rajbhandary, Chairman of CE Constructions. He further said, “This provision not only helps boost the sector but  also assists in reviving charm of apartments in domestic market.” According to him, the realty sector will emerge in more scientific and responsible way with the provision to have prior approvals for land plotting for residential purpose. However, he pointed on the need to live up to the promises made by the government for the development of the country.

Complaining that the government could not implement its previously introduced provisions, he said, “The sector could not achieve any significant progress earlier chiefly because of the government’s failure to keep its promises.” He further said that the implementation of announced provisions will depend on how quickly the government responses. 

Published on The Himalayan Times July 18, 2015 

http://epaper.thehimalayantimes.com/epaperpdf/18072015/18072015-md-hr-14.pdf

 

My Interview on 'Moin Uddin Show'

Moin Uddin has interviewed me in his show and I have shared my journey to journalism. Please do listen my interview following the link. Happy Listening :)

Thank you!!

https://www.youtube.com/watch?v=rkXuw4r9IPE

Real estate once again in wait and watch mode

Government policies will decide its future

Himalayan News Service

Kathmandu

Real estate developers are optimistic about growth in the real estate sector this upcoming fiscal. The realty sector, which was inclining after years of down turn, is expected to see normal growth. Although the massive earthquake has stagnated transactions of housing and apartments recently, developers are still hopeful for growth and rise in demand for housing projects.

As the government is still in the process and yet to introduce new housing policies, developers are in wait and watch mode. Developers stated that the government’s policy on National Building Code (NBC), Building By-laws and zonation will decide the future of the realty sector. As per the Nepal Land and Housing Development Association (NLHDA), of the total constructions housing developers hold only three per cent market share while 97 per cent of all houses are developed by individuals.

“The step that the government has taken to introduce a revised National Building Code is a positive decision. We had these policies a decade ago but the government could not implement them,” said Minman Shrestha, Secretary of NLHDA. Citing that the earthquake has taught many lessons about the importance of abiding by policies, he said, “This is the right time to introduce and implement Building By-laws, NBC and zonation map strictly for managed urbanisation.” He further said that customers have already acknowledged the importance of community living and the demand will surely increase. According to him, mandatory provisions for six metre road access, structural analysis, seismic resistant structure, height restriction and zonation for residential areas should come into force for organised urbanisation.

New guidelines

Shrestha claimed that the products that developers offered are constructed according to NBC and by-laws which withstood the quake. “The real estate sector was in an inclining phase and had recovered by 35 per cent last year and we are hopeful that this coming fiscal year will also witness growth in the sector,” he asserted.

Developers stated that the realty sector will not face huge demand for property, however, with clear policies the attraction towards developers’ products will surely increase. “Post earthquake people have realised that not only their own house should be safe but the surroundings and neighbouring houses should be safe too. Otherwise, there will be threat. And this awareness will certainly attract people to community living where design, quality, height and other facilities are available 24/7,” said Bijay Rajbhandary, Chairman of CE Constructions. However, he said, “As the government is still to introduce new guidelines and policies for the housing sector, we are in a wait and watch phase for introducing new projects.”

According to Rajbhandary, the government’s policies will determine the development of the real estate sector. “Banks and financial institutions have liquidity surplus, however, it is yet to see how the government will address monetary policy. Without assistance from banks, it will be a tough period for the real estate sector,” he said. Citing that the imposed construction ban created chaos in the industry earlier, he said, “The government needs to introduce practical policies being more farsightedness and transparent as it directly affects the price of products which ultimately puts pressure on the customers.” According to him, the price of properties will increased by 15 to 20 per cent owing to increase in land price and approval cost.

Demand for standalone houses

The earthquake affected thousands of houses in the valley. According to NLHDA, developers have 1,000 units of standalone houses in ongoing projects and 4,500 units of apartments to be sold in 83 apartment projects. Developers stated that they have got maximum inquiries following the earthquake. “People are gradually coming back to normal and inquiry for standalone houses have increased significantly,” informed Nishal Man Singh Shrestha, Chief Operating Officer at Brihat Investments. Stating that the inquiry for apartments is nil, he said, “Although apartment projects are structurally safe, people have not gained confidence about skyscrapers which will certainly take more time.” He said that due to the earthquake and situation that arose, people are attracted towards community living and housing projects.

Citing that the demand for housing will grow significantly in the upcoming fiscal, he said, “As there are few developers in the industry, the supply of well managed housings will be in short supply.” According to him, community living is gaining charm for its quality, design, open space, basic facilities such as water, electricity, transportation and safety.

Published on July 4, The Himalayan Times, THT Property Plus

Rebuilding heritage monuments will take years

Lack of timely maintenance and repairs main reason for such huge damage to historic monuments

SUJATA AWALE
KATHMANDU

 

The devastating earthquake on April 25, severely damaged historical and cultural monuments across the country. According to the Department of Archaeology (DoA), the massive earthquake has damaged 133 monuments fully, 95 partially collpased and 513 monuments partly damaged. Kathmandu valley renowned as the city of temples has lost 95 cultural heritage while 357 monuments are partially damaged.

UNESCO recognises the three Durbar Squares of Kathmandu, Patan and Bhaktapur, Swayambhunath, Boudhanath, Pashupatinath and Changu Narayan as World Heritage Zones. Experts stated that lack of timely maintenance and repairs were the main reason for such huge damage to these monuments.

According to the DoA, nine historical structures were totally destroyed while 26 structures are partially damaged in Hanuman Dhoka Durbar Square. Temples like Char Narayan, Hari Shankar, Taleju and the two Manimandals  of Patan Durbar Square, Vatsala Temple of Bhaktapur Durbar Square were completely destroyed among many others. While the Changu Narayan Temple has been given external support, and satals around the temple has been totally damaged. The main dome of Swayambhunath has developed  cracks while shikara style temples like Shantipur, Pratappur, Kantipur and Karmaraja Mahabihar have collapsed. Reportedly, 80 per cent of all traditional style residential buildings were fully damaged in the Swayambhunath area. Boudhanath also has cracks on the dome, while a few temples in Pashupatinath were partially damaged. A total of 155 monastries were damaged across the country.

“The earthquake has destroyed many cultural and historically significant buildings, temples and monuments. The damage in the valley, in terms of structure, is severe including all seven World Heritage Zones,” said Bhesh Narayan Dahal, Director General of DoA. Citing that the relics inside these structures are safe and kept at various museums, he said, “We plan to respond and work in three different phases for reconstruction and maintenance — immediate, mid-term and long-term. For the first phase we have already started the documentation process and will bring in experts for other aspects of the plan.” According to him, the government will initiate the rebuilding as per the Procurement Act through a bidding process.

Dahal informed that they will conduct rebuilding and safeguarding of World Heritage Monuments as per the Venice Charter’s Article 10 using traditional artefacts. “As per our analysis, restoration of heritage both partially and fully damaged would require up to Rs 10 billion and can be completed within five to seven years,” he asserted, adding that the release of the full budget should be on time.

Negligence in maintenance
There are clear indications that lack of restoration and maintenance of monuments elevated the extent of damage done by the earthquake. Stakeholders pointed out that lack of proper and timely maintenance of monuments is the reason the country lost numerous historical and cultural heritage.

“The government purely neglected structural strengthening and retrofitting of these monuments. It only focused on occasional beautification of those century old structures,” said Rohit Ranjitkar, Director of Kathmandu Valley Preservation Trust. Giving the example of the recently renovated and retrofitted Sundari Chowk, he said, “Not a single tile has fallen apart from Sundari Chowk on which updated techniques of retrofitting were applied. On the contrary, the Radha Krishna Temple at Swotha which was simply renovated in 1991 totally collapsed.”

He stressed the need for a detailed study of these structures and restoration with updated techniques to sustain and rebuild heritage monuments. According to him, the government should learn from the past and now work to strengthen existing monuments.

Citing that there should be close collaboration between the government, donor agencies and other organisations, Ranjitkar said, “We are overwhelmed by the response from various countries and agencies to help restore these monuments. The government should have a proper plan to cash in on this opportunity and make use of professional available help while restoring these monuments.”

There is also the possibility of shortage of required construction material such as timber, traditional styled bricks and mud with workmanship to rebuild massive structures, he said, “The government should give national priority to restoration projects and manage all tasks efficiently.”

Agreeing with him, Structural Engineer Dr Prem Nath Maskey said, “While studying monuments which were destroyed, it was clear that the construction material were past its expiration date.” Citing that construction material have their own life span, he added, “We found that the Kasthamandap, Shiva and Visnu Temple along with the Royal Palace in Hanuman Dhoka were not repaired for years and the structures were weak with rotten wooden beams and walls.” Maskey opined that it is high time the government started to initiate heritage conservation tasks using earthquake resistant techniques to strengthen structures and discuss the most appropriate approach.

Challenges for restoration
The discussion over what technique should be adopted in the reconstruction of heritage sites is ongoing. Stakeholders are finding greater challenges to deal with partially damaged monuments. They are undecided about whether to retain the remaining structure or to demolish and rebuild them. “Reconstruction of fully demolished monuments will depend on documentation, its significance and available resources. In any case, we will need to plan the entire rehabilitation over a minimum period of six years,” said Kai Weise, Coordinator, Earthquake Response for Cultural Heritage, UNESCO Kathmandu Office.

Planning ahead
Citing that the most important consideration is the establishment of a coordination system, Weise said, “The rehabilitation of these monuments as well as traditional settlements will be a gigantic task involving lots of organisations and authorities. Coordination would need to ensure that there is no duplication, required expertise is sought or trained, materials are ensured and funds are made available on time and rigorously audited.” He further added that the government will also need to establish a clear set of guidelines to ensure that all involved parties work along similar lines. According to him, the Earthquake Response Coordination Office (ERCO) has already been set up at the Department of Archaeology in close collaboration with UNESCO.

Over 80 years later
Considering the fact that reconstruction of various structures that collapsed during the 1934 earthquake was still being planned even eight decades later, the current restoration process must be considered as a long term endeavour. “An initial six year period has been planned, which will probably allow for some of the most significant monuments to be rebuilt,” Weise informed, adding that during this period all residential buildings must be reconstructed.

Stating that the local community also plays a vital role in reconstruction, he said, “Many monuments will only be restored through cooperation from the local community and how they support and see through this restoration period matters.” According to him, a clear vision on the process, approach and extent of reconstruction is required before beginning reconstruction work after the monsoons.

  http://thehimalayantimes.com/business/rebuilding-heritage-monuments-will-take-years/

Published on June 21, The Himalayan Times Perspectives

Price of construction material could witness significant hike next fiscal

The price of construction material could increase by up to 40 per cent after the ban on construction is revoked

Sujata Awale

Kathmandu

The cost of construction material is likely to increase in coming fiscal year 2015-16. The business of construction material such as bricks, sand, aggregates, cement and iron rods is facing tough time due to the government’s ban on construction till mid-July. However, it is anticipated that the price of construction material will swell up to 40 per cent after revoking the ban owing to high demand. Even the scarcity of materials is likely to hit the market.

As per the Federation of Construction Materials Business Association of Nepal (FCMBAN), consumer will face 10 to 15 per cent price hike on cement, 10 per cent on iron rods, 40 per cent growth on sand and aggregates and the price of bricks will increase arbitrarily along with 25 per cent price hike on wages of workers while conducting construction the next fiscal. If it is something to go with the announcement of the government to provide home loans to earthquake victims, the industry will face massive growth in demand by mid-July to mid-September.

While the construction industry is in stagnant state with the imposed ban, the effect is seen to the construction material business. As much as 70 per cent sales have dipped after earthquake on April 25, according to the FCMBAN. “The demand of bricks industry came to nil while the demand for other construction material such as cement, sand, aggregates and rods have confined to 30 per cent as compared to the same time last fiscal year,” said Yubak Rajbhandari, President of FCMBAN. However, he said that the market is witnessing gradual momentum in sales a week ago. According to him, earlier April to June used to be peak season for the sales of construction material.

Providing example of recent price hike on sand and aggregates, Rajbhandari said, “The price of sand per tipper was Rs 8,000 just a month ago. But with the gradual demand seen in market, the price has jumped to Rs 9,500 per tipper.” According to him, the government should plan ahead about probable demand and control mechanism on pricing for construction material. “We have sufficient capacity to fulfil demands on cement industry. However, we will face crisis on iron rods and brick industry,” he asserted, adding that there will be the chance of artificial scarcity and stipulation in price for bricks, sand and aggregates.

Brick industry faces nil in demand after the earthquake. Earlier in mid-February, due to heavy rainfall green clay worth Rs one billion were destroyed and the earthquake further dipped the production of bricks this year. As districts like Sindhuli, Ramechap, Dhading, Sindhupalchowk, Kavre and the valley are the most affected by the earthquake, the stock of bricks is confined to merely 100 million units.

“Viewing with the current trend, we feel that the stock will be more than enough for the reconstruction,” said Mahendra Bahadur Chitrakar, President of Federation of Nepal Brick Industries (FNBI). He also stated that as the government will pose revised National Building Code and By-laws, the demand for bricks will not increase by December. Assuring that there will not be scarcity of bricks in the market, he said, “If there is a high demand, we will fulfil the products by bringing in from districts like Nawalparasi, Parsa and Janakpur.” According to him, the Federation has appealed all entrepreneurs to trade in same price set prior to the quake. Earlier the price of bricks set for Rs 14,000 to Rs 15,000 per thousand units. There are altogether 800 brick kilns across the country.

As the restriction on construction industry has multiple chain effect, entrepreneurs appeal to the government to revoke the ban at the earliest. With the ban in construction, the cement industry faces 85 per cent dip in demand. “The government should work efficiently and considering the emergency should introduce new Building Code and revoke the ban. If not it will create negative impact on whole economy,” said Dhurba Raj Thapa, President of Cement Manufacturers Association of Nepal (CMAN).

Citing that the cement industry can fulfil extra 50 per cent demand, Thapa said, “We are operating only 50 per cent of installed capacity. If also the demand soars another 50 per cent, domestic production can meet the demand.”According to the CMAN, the annual consumption of cement totals 4.5 million tonnes and there are 45 cement factories operating across the country. 

Published on The Himalayan Times June 20, 2015 at THT Property Plus

http://epaper.thehimalayantimes.com/epaperpdf/20062015/20062015-md-hr-14.pdf