Nepal | May 30, 2020

Bhairahawa SEZ to sign MoU with 11 selected companies

Himalayan News Service
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Kathmandu, August 14

The Special Economic Zone Development Committee has approved the requests for proposal (RfPs) of 11 companies and has invited them to sign the agreement for setting up industries in the Bhairahawa Special Economic Zone (SEZ).

The SEZ Development Committee had sought RfPs from both domestic and foreign investors on May 2. The RfP evaluation committee, led by executive director of SEZ Development Committee, has approved RfPs of 11 firms out of the 23 that had filed their applications.

These 11 firms will occupy around 30 plots of Bhairahawa SEZ and they will have to set up their industries within a year of the agreement being signed. There are altogether 69 plots in the Bhairahawa SEZ.

“The 11 firms whose RfPs have been approved have been invited to sign memorandum of understanding and we will sign the MoU within this week,” said Chandika Prasad Bhatta, executive director of SEZ Development Committee. “After signing the MoU, the firms need to deposit the rental charge of six months as security deposit and also pay the rental charge for three months in advance.”

Bhatta further informed that SEZ Development Committee can extend the period but by no more than a year for the firms to set up their industry.

The Committee has approved RfPs of Hulas Steel Industries Ltd; two industries under Siddhartha PET Plast Industries Pvt Ltd; Action Polymer Industries Ltd; Chetan Singh Multipurpose Pvt Ltd; Sugam Nano Herbal Industries Ltd; Kiran Shoes Manufactures; Lohiya Soap Industries; Mahendra Kumar Goel Readymade Garments; Arun Khola Multipurpose Company and Jagadamba Synthetic Industries.

The Committee has also sought advice from the Ministry of Industry as the Mc Group submitted RfP to set up a gutkha factory. The Mc Group has asked for four plots in the SEZ. The SEZ Development Committee will take a decision on Mc Group’s proposal as per the ministry’s advice. The remaining 11 firms who have submitted RfPs have been asked to submit required documents within a week from August 9.

Altogether, 23 firms have requested for 48 plots. If the remaining firms do not come with the detailed documents sought by SEZ Development Committee, it will ask for RfPs for the remaining plots in the second lot, according to Bhatta. “We will also try to lure foreign investors the next time.”

The rental charge in Bhairahawa SEZ has been fixed at Rs 20 per square metre and an entity must have fixed capital worth Rs 20 million to be eligible to set up an industry there.

The Bhairahawa SEZ was inaugurated on November 18, 2014. Since the country does not have SEZ Act, the government had developed operation procedure to operate the SEZ. SEZ Bill was tabled by the industry minister in the Parliament just a few months back.

SEZ allows every type of industry except security printing, and arms and ammunition, among others, listed in the negative list of the proposed Industrial Enterprises Bill. The SEZ provides numerous incentives including rental charge rebate, duty-free facility to import raw materials, and corporate tax exemption, among others. However, industries set up in SEZ must mandatorily export 75 per cent of their production.

The government has been developing other SEZs in various parts of the country to promote export-oriented industries in a bid to attain higher and sustainable growth by boosting exports.

A version of this article appears in print on August 15, 2016 of The Himalayan Times.

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