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