Nepal | July 11, 2020

Industries yet to be set up at Bhairahawa SEZ

Himalayan News Service
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Kathmandu, March 21

Though all the 69 plots in Bhairahawa Special Economic Zone (SEZ) were booked in October last year, none of the companies that have been authorised to set up industries within this special zone have started construction work.

Due to the delay by the government in creating a favourable environment as pledged, 22 companies that have acquired permission from the government have not even completed their registration process so far.

The SEZ Development Committee in October had approved the request for proposal (RfP) of 22 domestic companies to set up industries within the Bhairahawa SEZ, allowing these companies to begin construction work after fulfilling industry registration requirements of the government. But the Bhairahawa SEZ Office is yet to begin the registration process of industries. This has delayed the timely operation of the only SEZ that has been inaugurated in the country so far.

“Industries had already begun the registration process at different government agencies. However, the meeting of Industrial Promotion Board (IPB) in the first week of March recommended the government to introduce a provision whereby industries can complete entire registration process from the respective SEZ offices itself,” Chandika Bhatta, executive director of SEZ Development Committee said, adding that the registration process currently has been delayed as this recommendation of the government is yet to be endorsed from the Cabinet.

In a bid to promote export-oriented industries in the country to narrow down Nepal’s trade deficit, the government had accelerated its efforts to establish SEZs in the country and Bhairahawa SEZ, the first in the country, was inaugurated in November 2014. Though domestic companies were reluctant to set up industries within Bhairahawa SEZ, it received overwhelming response from domestic investors after the endorsement of SEZ Act in August last year. Nevertheless, the procedural delay from the government has been interrupting the full-fledged operation of Bhairahawa SEZ.

Moreover, the government also has not been able to ensure dedicated supply of power in Bhairahawa SEZ. Though the SEZ Development Committee has asked Ministry of Energy (MoE) for 15 to 20 megawatts of dedicated electricity supply in Bhairahawa SEZ, MoE has not yet taken a decision on the proposal. “The government should ensure energy supply that is required for industries to run inside Bhairahawa SEZ as soon as possible,” Bhatta said.

As the SEZ Act ensures different taxation waiver facilities for industries within SEZ, domestic companies have shown interest to set up different industries inside Bhairahawa SEZ related to water bottling plants, polymer, beverage, metal processing, electric products and noodles, among others.

Shankar Koirala, secretary of Ministry of Industry (MoI), informed that the Cabinet has recently given a nod to the recommendation of IPB to complete all registration process of industries in their respected SEZ Offices. “We will soon publish a notice to this effect in the gazette enforcing the recommendation of IPB,” said Koirala.

A version of this article appears in print on March 22, 2017 of The Himalayan Times.

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