Three Chinese firms in bid to build new Pokhara airport

KATHMANDU, MAY 05, 2012

The Civil Aviation Authority of Nepal (CAAN) received only three confirmed bids to develop the much-talked about regional international airport at Chinnedanda, Pokhara as the tender deadline ended Friday afternoon.

Out of the 10 Chinese firms that obtained bid documents, three, China CAMC Engineering Co, Sinohydro Corporation and China International Water and Electric Corporation, have returned them to CAAN. According to CAAN, all the three bidders are listed by the China International Contractors Association, an international project contracting company approved by the Ministry of Commerce of China.

According to CAAN, the tender documents will be processed after it holds its board meeting. However, that may take some time as the Minister of Tourism and Civil Aviation is the board’s chairperson and a new minister is yet to be appointed.

“After the board meeting, the technical and financial aspects of the contractors will be evaluated to select the finalist,” said CAAN’s Deputy Director General Suman Shrestha.

The lowest bidder will be awarded the contract after assessing the bid documents. Under technical eligibility, the bidder should have at least 10 years’ experience in infrastructure projects and shall have completed at least one airport project including communication and navigational aids equipment with installation outside or within China and a project cost of at least US$ 120 million. Similarly, under financial eligibility, the bidder should have liquid assets or availability of credit facilities of not less than US$ 20 million. Shrestha said that CAAN would select the lowest bidder and recommend the firm to its line ministry. The ministry will forward the selected firm’s name to the Finance Ministry which will then start loan negotiations with the Export-Import Bank of China (Exim Bank). The government plans to develop the airport with a soft loan of around US$ 145 million from Exim bank.

In 1975, the government acquired more than 3,106 ropanis of land to build the planned airport. The government and the Japan International Cooperation Agency conduct a detailed study in 1989.

The study had proposed a 2,500 m long and 50 m wide runway, a terminal and a cargo building.

Construction of the airport, which was expected to be completed in four years, was estimated to cost of US$ 39.6 million at the time. A new study has estimated that the project will now cost more than US$ 180 million.

CAAN invited bids for execution of the project under the engineering procurement and construction (EPC) model on Feb 9 and extended the deadline twice.

The EPC plan allows participation of Chinese companies or joint ventures between Chinese and Nepali companies with the Chinese partner holding more than 50 percent of the shares.

Source: Kantipur

Govt laxity on buyback facility renewal hits RMG exports

KATHMANDU, Feb 23: 2012

Country´s ailing readymade garment industry has received a new jolt, as the government´s laxity to extend buyback facility, including tax and other incentives pledged to exporters operating with raw materials provided by importers, left a huge volume of raw materials stranded at major import points.

“The expiry of the facility has left a consignment of raw materials (supplied by the importers) worth $100,000 stranded at Tribhuvan International Airport,” Indra Chitrakar, senior staff of Sherpa Adventure Gear.

Sherpa Adventure Gear has been exporting ´Sherpa´ brand of garment under the facility by importing raw materials free of cost from Taiwan, Hong Kong, Japan and China.

“If the government did not act promptly, we will lose business worth around $1 million,” Chitrakar told Republica on Wednesday.

Four other apparels manufacturers, including Ami Apparels and Kathmandu Star Fashion, too have lodged similar concerns at the Ministry of Commerce and Supplies (MoCS).

The government had introduced buyback guarantee facility four years ago and it was subject to renewal every two years. Though the latest tenure of the facility expired two months ago, exporters said MoCS has yet to take initiative to extend the facility.

About half a dozen RMG exporters are enjoying the buyback facility, exporting apparels worth around Rs 500 million to overseas markets every year.

“We had requested the government for extension of the buyback guarantee facility long before it expired. Sadly, our requests fell on deaf ears,” said Uday Raj Pandey, president of Garment Association of Nepal (GAN).

The ministry´s inaction, meanwhile, has put the fate of garment orders worth millions of rupees and jobs of hundreds of workers into uncertainty.

Ami Apparel that operates with 300 workers said lack of timely decision on buyback arrangement has exposed it to a risk of losing exports worth around Rs 80 million. The company has been exporting readymade garments to leading branded stores in India.

“We have shut down our factory temporarily. If the government did not extend the facility, we will be forced to shut it down permanently,” Rajesh Udas, proprietor of Ami Apparel, said.

Ashok Shakya, chairman of Kathmandu Star Fashion, too said the government´s indecisiveness is set to cost his industry business worth Rs 180 million. “We are facing shortage of raw materials. We´ve already informed buyers about the problem here,” he stated.

Kathmandu Star Fashion that employs over 500 people has been exporting garment to Europe and the US.

Shakya further said that Nepali apparels industry will face over 30 percent rise in production cost if the government did not renew the facility.

Under the buyback system, no importer of raw materials was required to keep deposits on imports supplied by the buyer and exporters were provided with bonded warehouse facility even without letter of credit. They were also exempted from paying bank guarantee charge.

Readymade garment was once the country´s largest exports commodity with annual exports crossing over Rs 12 billion in 1999/2000. However, its export has presently dropped to Rs 4.08 billion per annum.

Meanwhile, Lal Mani Joshi, secretary at the MoCS, said that ministry has received complaints over the issue and added that the government would take appropriate decisions within few days.

Source: Republica