Government seeks support from India, China to set up SEZ

Kathmandu, January 4

The government has sought support from Indian and Chinese governments to set up Special Economic Zone (SEZ) in Nepal.

Chandika Prasad Bhatta, executive director of SEZ Development Committee, said that the committee a few months back had sought support from Indian government through Ministry of Foreign Affairs (MoFA) to invest in the development of SEZ in Nepal. Similarly, Bhatta informed that a letter seeking support from China is being sent to Chinese government via MoFA soon.

“Though the SEZ Act opens the door for private sector to invest in SEZ, domestic companies seem unable to invest in setting up SEZ as top domestic companies have only shown interest in setting up industries within the zones,” said Bhatta, adding that support has been sought from the two neighbours as construction of SEZ requires huge capital.

According to him, construction of a normal SEZ requires up to Rs seven billion while cost of construction of a modern SEZ can shoot up to Rs 10 billion.

The government’s move to seek support of the Chinese government to build SEZ means that it is unlikely to accept, in the near future, the joint proposal made by two Chinese companies — Lhasa SEZ (owned by Chinese government) and Ping An Insurance — that had shown interest to establish a SEZ in Nepal. The two companies had shown interest to build a model SEZ in the country.

“Though SEZ Act opens the door for private sector to establish SEZ in Nepal they need to manage their own land and this is not possible for all investors who have shown interest,” said Bhatta.

“Only the government-to-government dialogue between Nepal and China can facilitate Chinese investment and Ministry of Industry (MoI) is planning to hold talks with the Chinese government authority soon.”

Lately, the government has been focusing on developing SEZ in different parts of the country to promote export-oriented industries and boost exports.

The government, on Tuesday, also unveiled locations in seven provinces where SEZ will be established. It plans to establish SEZ in Biratnagar of Province 1, Simara of Province 2, Panchkhal of Province 3, Gorkha of Province 4, Jumla of Province 6 and Dhangadhi of Province 7. A SEZ has already been established in Bhairahawa of Province 5.

The government plans to establish 14 SEZs in different parts of the country in the long run.