Tuesday, January 23, 2018

Cargo movement to Nepal via Visakhapatnam up but lags behind Kolkata port and more

More and more Nepali traders have started using the seaport in Visakhapatnam, India, for third country trade. In the last six months, the country’s only dry port in Sirsiya, Birgunj, received 19 railway rakes of goods from Visakhapatnam port. Each rake contains 90 containers of 20 feet long each.

The number of rakes dispatched through Visakhapatnam port is still small considering 16 rakes that Kolkata port sends to Nepal per month. But concerned stakeholders consider rise in movement of cargoes from Visakhapatnam port a good sign for Nepal’s third country trade, as it will exert pressure on Kolkata port to improve its services. Indian authorities had opened Visakhapatnam port for Nepal after traders demanded an alternative port for the landlocked country to conduct third-country trade.

India had agreed in principal to allow Nepal to use the Vishakhapatnam port in 2009. Nepal got the permission to use the port for third country trade in February 2016. Vishakhapatnam port is 1,436 km away compared to 704 km distance to Kolkata port (which is heavily congested, affecting trade).

At a time when the industries selected to set up plants in the Bhairahawa Special Economic Zone (SEZ) are waiting for grid connectivity with adequate power supply to operate their factories, Nepal Electricity Authority (NEA) today issued a disappointing statement that the industries in SEZ may be deprived of adequate power supply for next two years.

The power utility has stated that Bhairahawa SEZ and SEZ Development Committee have not taken any initiative to develop a substation at Bhairahawa SEZ. NEA will provide 33 kV dedicated line to Bhairahawa SEZ from its Dhagdhagi substation, which is at a distance of 15 kilometres from the SEZ. NEA has criticised Bhairahawa SEZ for blaming the authority for lack of grid connection with adequate power as the SEZ has not initiated the process to set up a substation to distribute power to individual plants. 

NEA is responsible to install 33 kV dedicated line for the SEZ from Butwal substation to Dhagdhagi, but the SEZ itself has to instal a 15-km 33 kV transmission line from Dhagdhagi to the SEZ and distribute it to the individual industries through their 33/11kV substation.

The government has directed cement factories to rollback the decision to increase the price of cement within three days. The decision comes in the wake of as much as 16 percent increment in the price cement - a key construction material - in recent weeks.

A survey conducted by the Department of Supply Management and Protection of Consumers Interest (DSMPCI), the agency for market monitoring and consumer protection, in Kathmandu and some major cities of the country in the past two weeks showed that price of cement has gone up by 10 to 16 percent, while factory input cost has increased by only 7 to 9 percent. The rise in the price of construction materials has affected victims of the 2015 earthquakes as most of them are rebuilding their homes. Factories hiked the price to cash in on the rise in demand for construction materials.