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Implementation of power proposals

Bangladesh, Nepal need to have ‘effective dialogue’


Published : 18 Nov 2022 09:35 PM | Updated : 19 Nov 2022 05:20 PM

Sunil KC, Founder of a Nepal-based think tank Asian Institute of Diplomacy and International Affairs (AIDIA), has said that Bangladesh and Nepal need to have “effective dialogue” for speedy implementation of the proposals in the power sector.

Talking to Bangladesh Post, he said, Nepal is a country with “a vast diversity” of potentials for investment, but so far, none of the Bangladeshi private sectors have come up to cash this mass potential.

“Nepal always welcomes foreign direct investment (FDI). Bangladesh has remained an investment partner of Nepal for the last three decades. But an aggressive investment in the sense from Bangladesh is yet to come especially in the hydro power, transmission, and infrastructure sector,” he said while giving an interview during his recent visit to Dhaka.

“As per one of the technical reports, it is considered to have the potential of near about 0.2 million megawatts of hydro-power generation in Nepal whereas Bangladesh is in dire need of abundant energy for further industrialization and domestic needs,” he said.

“Bangladesh is approaching for construction of 1110 MW Sunkoshi II and 550 MW Sunkoshi III project for their need targeting to get constructed 9000 MW power purchase plans from Nepal by 2040,” he said, suggesting “effective dialogue” for speedy implementation of those proposals.

Sunil KC is also a Vice President at Nepal India Chamber of Commerce and Industry (NICCI) and Adviser at the Confederation of Nepalese Industries (CNI) and Federation of Nepalese Chamber of Commerce and Industry (FNCCI).

 The diplomatic relations between Bangladesh and Nepal were established on 8 April 1972.

 Both countries are members of SAARC, BIMSTEC, BBIN, NAM, and the United Nations and work closely on issues of common interests and share similar views at various regional and international forums.

 For bilateral trade and transit promotion, Nepal and Bangladesh had initially concluded a Trade and Payment Agreement in 1976, with protocols to trade and payments and protocols to transit agreements–with amendments in subsequent years.

The Economic and commercial relations between Nepal and Bangladesh have fluctuated in the last five years, but have tremendous potential for expanding and diversifying the bilateral trade.

In the last 5 years, Nepal’s exportable items to Bangladesh remained below 100 whereas, during the same period, Nepal imported around 800 items.

Sunil KC said Bangladeshi investors have invested about NRs 1 billion in 74 projects till 2021 with a total project cost of NRs 1.26 billion.

 In order to create an investment environment for Bangladeshi investors, Nepal and Bangladesh signed a double taxation avoidance pact in 2019, agreeing to mitigate or avoid taxation on the same income by the two countries.

 He said the government of Nepal is formulating new guidelines for export of Nepal with transmissions and grid plans where the developers can come up with the proposal of direct export to India or a third country after construction. “So, the potential in the hydro sector is abundant in Nepal.”

He said investment can also be considered for the development of transmission lines in the private sector with tripartite investments between Nepal, India, and Bangladesh so that it becomes more effective for regional connectivity in the power sector.

“Apart from the energy sector, Nepal is a country of biodiversity wherein world most of the climate are available in Nepal within a dimension of East West 800 km and North-South 200 km and within the altitude of 60 meters in South to 8848 meters from sea level, the top of the world in the North.

“Within this periphery, you can find the purest herbs for Ayurveda that is why Dabur and Patanjali of India are keen to be here.

“We have abundant herbs and formula, but we need mass production technology for the cost-effective production and marketing of quality Ayurveda medicine locally, regionally, and globally.

“Apart from this, there are several infrastructural opportunities for tourism promotion like hotels, cable cars, adventure tourism like paragliding, bumpy jumping, skiing in Himalayan sites, and zip flyers.

“The longest cable car in the world has been planned for and working for the Muktinath area from Pokhara, the finest tourist destination of Nepal,” he said.

“Since we are talking about FDI and technology transfer, we have also the potential for construction and infrastructures like roads, tunnels, bridges, construction of new airports and up-gradation of existing airports, construction and running of ICDs and ICPs, Export Processing Zones in all 7 provinces, Construction and running of railways like East-west railways and Birgunj Kathmandu railway, collaborations for quality hospitals in seven provinces in the health sector, collaborations in management and information technology for quality education as well as collaborations in running of IT companies, because, labour cost in Nepal is relatively cheap with brilliant minds of youngsters."

“Garment sector and other manufacturing sectors, for which dedicated EPZs can also be considered for Bangladeshi investors. We heartily invite all Bangladesh investors to come to Nepal and invest.

“We have an Investment Board for investment proposals above 5 billion Nepalese Rupees and below the benchmark, the investment proposals are seen by the Department of Industry through a one-window policy,” he said.

To give the example of Indian Investments in Nepal, there are several Indian investments in Nepal mainly after the 1996 Trade Treaty, and they have remained major contributors to the national exchequer of Nepal and also remained “a blue chip” company in capital market terminology.

Dabur Nepal, Unilever Nepal Ltd, Surya Nepal (sister concern of ITC India), Asian Paints Nepal, Berger Jenson and Nicholson Nepal, Kansai Paints Nepal, Aarti Strips, Ashok Steel Industries, GorkhaLahari, Pro-biotech Industries, Gorkha Brewery, Highland Distillery, and Nepal Distillery are some of those companies.

Nepal and Bangladesh signed a trade and payments agreement and a transit agreement with Bangladesh in April 1976.

Bangladesh government has provided transit facilities to Nepal in Chattogram and Mongla Ports.

The overland trade route to Bangladesh from Kakarbhitta-Phulbari-Banglabandha has been operational since September 1997. 

The Government of Bangladesh agreed on 10 August 2020 to include Rohanpur as the Port of Call in the Nepal-Bangladesh Transit Agreement.

On 22-23 March 2021, Nepal and Bangladesh signed the Exchange of Letters on the designation of the Rohanpur-Singhabad railway route as an additional transit route for the movement of traffic-in-transit between Nepal and Bangladesh and also for the third country transit trade.

“These routes need to be made operational in practice with cooperation from the government of India,” Sunil KC said.

“Apart from the land route, there is a high potential for waterways connectivity. If this comes to reality, the transit cost of bilateral trade and regional trade could be significantly reduced.”