By Our Reporter
Fate of direct foreign investment worth Rs 15 billion of a Chinese Company has become uncertain after Rorang Benighat Rural Municipality in Dhading scrapped an agreement reached with the company to provide 169 ropanis of land in lease. The Rural Municipality annulled the agreement last week at the instruction of the parliamentary committee. Hongshi Cement has already invested Rs 3 billion since the Investment Board of Nepal gave permission to operate an industry in Panikharka of Dhading in 2017. But the Public Account Committee of the parliament recommended annulment of the agreement.
Chairman Pitta Bahadur Dallakoti of the Rural Municiplaity infromed that they scrapped the decison to provide 169 ropanis of land to Hongshi Cement in lease for 50 years. He said that the decison was taken as the law has a provision to provide land in lease for only 30 years.
This decision of the parliamentary committee is also interpreted as an interference in the jurisdiction of local levels.
The investors have expressed their shock over the decison of the government to annul the decision. The decision has put the Chinese company in a crisis, it has also discouraged other investors. The decagon clearly shows that the government is not serious in practice to lure FDI.
Meanwhile, the Cement Manufacturers Association (CMA) Nepal organised a discussion programme on challenges of the cement industry in the country last week where the producers tried to persuade the Minister for Industry, Commerce and Supplies Matrika Prasad Yadav and concerned departments of environment, forest, industry and standards to bar the Foreign Direct Investment (FDI) in the sector.
Domestic cement producers recommended barring the FDI in the sectors on which the country is self-reliant.
President of the CMA Dhurba Thapa said that the cement market in the country had been saturated, and inviting large investments in this sector could jeopardize the entire industry.
“We will have become self-reliant in cement and by the end of 2020, we will have product surplus. Bringing in more FDI in large cement industry will be suicidal for the existing businesses and the newcomers as well,” he said.
Refuting that the large industry like Hongshi Shivam cement had caused the sudden downfall in the market price of cement, Thapa said that the uninterruptible power supply and decreasing price of coal – used as fuel and raw material – in the international market made the product cheaper.