Kathmandu, March 26
While the government continues to stress enlarging the market share of domestic production and reducing the trade deficit, the import of wiring cables and conductors, which are deemed necessary for electrification purposes as well as in the development of hydropower projects, has gravely affected the market share of domestic manufacturers.
Despite the country being self-sufficient in producing related products, the imposed duty of one per cent on their imports, disregard for their standards, and stringent criteria set by the government for local industries have affected the market of domestically produced cables and conductors, stakeholders say.
According to Saroj Mishra, vice-president of Litmus Industries Ltd and general secretary of Nepal Electrical and Electronics Manufacturers Association (NEEMA), of the 22 cable and conductor manufacturing industries currently in operation in the country, as many as five of them have the capacity to manufacture a full range of cables, conductors and transformers used in large hydropower and transmission line projects.
"Although the industries here are capable of fulfilling the required demand for wiring cables in the domestic market, a significant number of products continue to be imported affecting local manufacturers," he said.
Mishra also complained that although the electrical and electronic manufacturers in the country need to be 'NS 344' certified as required by the Nepal Bureau of Standards Metrology (NBSM) for production and distribution purposes of related products, which is also maintained in the national gazette, such requirements are not being strictly followed. He emphasised that the concerned government agencies should look into the issue and stop the import of such products to enhance as well as support Nepali industries.
"In the case of domestic wiring cables, 20 per cent of the market share worth over Rs six billion and 80 per cent of the market share worth over Rs 40 billion for products related to huge conductors and transmission cables used in hydropower projects are being imported from outside the country, despite the country being self-sufficient in manufacturing them. The duty of one per cent imposed by the government on related products used on hydropower projects has further increased imports as international and local contractors lean towards imported products as a result, taking a toll on domestic industries.
Meanwhile, domestic industries are required to pay value added tax of up to 13 per cent and a duty of five per cent on import of raw materials, which has made local products less competitive. The government should impose a duty of 15 per cent on their imports to increase the consumption of domestically manufactured products," he opined.
Mishra also shared that although the criteria set by the government for participating in tenders have been relaxed to some extent, it is still restricting domestic industries from being able to supply their products to their full potential.
"While the Nepal Electricity Authority has started promoting domestic industries and products, the government agencies should also do the same. The criteria to participate in related tenders states that the bidding entity should have supplied 10,000 km of conductors over a span of five years to participate in the bidding of 5,000 km of conductors.
Similarly, an entity should have supplied over 5,000 km of conductors over a span of two years to participate in the bidding for 2,000 km of conductors.
Despite the country's industries being able to meet the domestic demands for major conductors and high-tension lines required for hydropower projects as well as house wiring and related cables, we haven't been given the chance to supply the required amounts to meet the criteria set. How can we be eligible if our prospect is not recognised?"
Meanwhile, Jyoti Joshi Bhatta, spokesperson for NBSM, said that it is mandatory for PVC insulated cables for fixed wiring with copper conductor to be certified 'NS 344' for distribution and manufacturing purposes even when they are imported. "While the NBSM has already informed the Department of Customs of the goods that need to be certified before their imports, it is the duty of everyone to ensure that the rule is strictly followed," she shared.
Krishna Raj Panta, director of the Public Procurement Monitoring Office (PPMO), said that while the office has maintained a higher and lower range for interested bidders, there is also a provision where even ineligible suppliers can participate in the bidding if there are no eligible suppliers in the market. "The eligibility criteria is required only if it is demanded by the vendor," he said.
However, Mishra argued that international entities that are eligible and meet the set criteria always take part in the bidding process leaving no ground for domestic industries.
"The government should instead allow domestic manufacturers to bid on the supply of products the country is self-sufficient in while allowing international companies to supply products that are not manufactured here," he said.
A version of this article appears in the print on March 27, 2023, of The Himalayan Times.
