Nepal | March 30, 2020

Govt opens Simara GPZ for investment

Himalayan News Service

Kathmandu, May 12

The Special Economic Zone (SEZ) Authority Nepal has called for applications from interested investors to invest inside the Garment Processing Zone (GPZ) in Simara.

Publishing a notice recently, the SEZ Authority has asked firms to submit their applications within May 31 to set up their factories across 68 blocks inside the GPZ.

The SEZ Authority has fixed rental fee of Rs 20 per square feet for investors to establish their factories inside the Simara GPZ.

The authority will provide necessary land to investors on lease for 30 years with the possibility of an extension.

“We have already started receiving queries from investors.

We are hopeful that all 68 blocks will be booked within the application submission deadline,” said Chandika Bhatta, executive director of SEZ Authority Nepal.

According to him, the authority will analyse the applications that it receives for Simara GPZ and soon award the blocks for investors to invest in.

The SEZ Authority has stated that investors in the Simara GPZ will be assured of basic infrastructure including internal road, electricity and water supply, sewage system, weighing bridge, waste water treatment plant, petrol pump, banks and insurance service, among other facilities.

The government came up with the concept of GPZ after the United States extended zero tariff preference for 66 products, including apparels, into its market through the ‘Trade Facilitation and Trade Enforcement Act’ in February 2016. Construction of the GPZ is expected to bring down the production and export cost of garments in Nepal, which is relatively higher when compared with other nations in the South Asian region.

Along with reducing the cost of production and exports, the GPZ is also expected to slash the high transport and shipment costs incurred by Nepali garment traders due to the country’s landlocked status, as the Simara Garment Processing Zone is located near the country’s only rail-linked dry port in Birgunj.

Nepal’s readymade garment industry has been on the verge of collapse since the expiry of Multi Fibre Agreement in January 2005, which provided duty-free access for Nepali garments to the US. Prior to the phasing out of the quota system, Nepal was exporting garments worth Rs 12 billion annually and was generating around 500,000 jobs in the sector. Back then, the sector had drawn investment to the tune of Rs six billion. Since then, over 85 per cent of garment factories have pulled down their shutters.

A version of this article appears in print on May 13, 2019 of The Himalayan Times.

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