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The Supreme Court has issued an interim order against the Nepal Army’s move to award the contract of the sixth package of the Kathmandu-Nijgadh Fast Track project to a controversial Chinese company. The Nepal Army on December 12 had sent a letter to the Chinese company and asked its officials to come to the Nepal Army headquarters within 15 days for the contract agreement. Responding to a writ petition filed by advocate Rojan Khadka on behalf of an Indian company—Afcons Infrastructure Limited, on Tuesday, a single bench of Justice Tanka Bahadur Moktan on Wednesday issued an interim order directing the Nepal Army to not award the contract to the Chinese company at a time when the case is under consideration at the court. In his writ, Khadka had demanded that the Nepal Army’s invitation to award the contract to the Chinese company be stopped at the earliest. After the hearing on December 6, a division bench of Acting Chief Justice Hari Krishna Karki and Justice Pushpalata Mathema on December 12 had ordered the Nepal Army to submit the original documents of the contract. But, the Nepal Army wrote a letter to the Chinese company—China First Highway Engineering Company Limited, on December 12 and asked the officials to come to the Nepal Army headquarters within 15 days for the contract agreement. Later, the Indian company—Afcons Infrastructure Limited on December 20 filed a writ against the decision of the Nepal Army. Nepal Army, in charge of the project, on November 11 had decided to award the contract to the China First Highway Engineering Co. Ltd, which was disqualified earlier in the bidding process. Later, the company was deemed qualified and included in the bidding process on November 6. A total of 12 companies had applied for the bidding process of ‘Double Lane Dual Carriageway Standard Expressway Road, Bridge, Slope Stabilization, Interchange, Toll Plaza and Allied Works, in the sixth package of the Kathmandu-Tarai-Madhesh Expressway. Based on Nepal Army’s technical evaluation, five companies were qualified for the bidding process. The China First Highway Engineering Co. Ltd, which was not selected in the bidding process, filed a case against the decision at the Public Procurement Review Committee. Later, the Committee issued a directive to include the Chinese company in the bidding process which was called on June 1. After the inclusion of China First Highway Engineering Co. Ltd, six companies were selected for the bidding process. Of the qualified companies, CFHEC won the contract to construct the fast track at Rs 18. 80 billion.  

Senior member of the House of Representatives Pashupati Shumsher JB Rana took the oath of office and secrecy on Wednesday. President Bidya Devi Bhandari administered the oath of office and secrecy amidst a program organized in Sheetal Niwas this afternoon. Rana is a PR lawmaker. He was born in Maharajgunj, Kathmandu on May 7, 1941. Vice-President Nanda Bahadur Pun, Prime Minister Sher Bahadur Deuba, National Assembly Chairman Ganesh Prasad Timilsina and acting Chief Justice Hari Krishna Karki among others were present in the program. Rana will administer the oath of office and secrecy to other lawmakers on Thursday.    

At a time when serious discussions are going on about a new power sharing, CPN-UML Chairman KP Sharma and Rastriya Prajatantra Party Chairman Rajendra Lingden held a meeting on Tuesday. During the meeting held at the residence of Oli in Balkot, the duo discussed a new power sharing, future strategy and contemporary political issues among others. The UML and RPP had forged electoral alliances in some places. Both Oli and Lingden were unanimously elected as the Parliamentary Party leader of their respective parties on Tuesday itself. The UML intensified meetings with senior leaders of various political parties after President Bidya Devi Bhandari called upon the political parties to form a new government by December 25. Earlier on Tuesday morning, UML Vice-Chairman and former speaker Subash Chandra Nembang formally proposed CPN (Maoist Center) Chairman Pushpa Kamal Dahal to become the prime minister. A few days ago, the Maoist Center itself had formally proposed UML for the power sharing. Dahal, who had moved forward with a strategy to rout Nepali Congress President Sher Bahadur Deuba, had sent General Secretary Dev Gurung to Balkot making him his messenger. On the occasion, Gurung had sought Oli’s opinion on power sharing. Saying that the left alliance is essential to form a stable government in the country, Gurung had formally proposed for power sharing. With the response of the same proposal, Nembang had reached Khumaltar with the proposal of the prime minister. During the meeting, Nembang also put forth two conditions. The UML will take the post of president and not incorporate Madhav Kumar Nepal-led CPN (Unified Socialist) in the alliance. Nembang had also said that the UML will be flexible in sharing other posts also if the Maoist Center accepts the two conditions, a Khumaltar source said. “We are ready to accept you as the prime minister. You become the prime minister, we are ready to take the post of president,” a source said, quoting the dialogue of two leaders. “Other posts will be shared in consensus. Let’s take politics ahead through a new course to take the country towards the path of stability.” Deuba and Dahal have been staking claims for the post of prime minister in the ruling alliance. No party in the 275-member House of Representatives has 138 seats required to form the government. The Nepali Congress has emerged as the single largest party in the November 20 elections with 89 seats. The UML secured 78 seats. The CPN (Maoist Center) garnered 32 seats, Rastriya Swatantra Party 20, Rastriya Prajatantra Party 14, Janata Samajbadi Party 12, CPN (Unified Socialist) 10, Janamat Party 6, Democratic Socialist Party 4, Nagarik Unmukti Party 3, and Rastriya Janamorcha and Nepal Workers and Peasants Party won one seat each. Independent candidates got five seats.  

Nepali Congress General Secretary Gagan Thapa has announced that he would not join the government. Thapa said that he would not join the government and would take an initiative to form the government under the leadership of the Nepali Congress. He said so after the results of the Parliamentary Party leader election were made public on Wednesday. “Other friends will join the government if it is formed under the leadership of Nepali Congress. There is a need for transformation and generational transfer of power in the party,” he said. He was of the opinion that he will make preparations to become the Parliamentary Party leader in the coming days. “I am not disappointed with this result. Instead I will work hard. The time will come when the friends will feel it,” leader Thapa said. He faced a defeat at the hands of party President Sher Bahadur Deuba in the Parliamentary Party leader. Deuba secured 64 votes while Thapa garnered 25 votes.

The price of gold has increased by Rs 800 per tola in the domestic market on Wednesday. According to the Federation of Nepal Gold and Silver Dealers’ Association, the precious yellow metal is being traded at Rs 111, 000 per tola today. The gold was traded at Rs 100, 400 per tola on Tuesday. Meanwhile, tejabi gold is being traded at Rs 100, 700 per tola. Similarly, the price of silver has increased by Rs 25 and is being traded at Rs 1,400 per tola today.

With government policies favoring the sales of 100kW electric vehicles (EVs) in the market, Nepali EV dealers are now importing more vehicles of this motor capacity. The success of NETA V in the market along with the government tax policy has forced EV dealers to go for 100 kW vehicles. First, Paramount Motors, the authorized dealer of MG Motors in Nepal, recently requested the Chinese manufacturer of MG to manufacture EVs below 100 kW. Now, Cimex Inc, the authorized dealer of BYD in Nepal has also started the process to import Atto-3. Paramount Motors, which logged strong sales in the last fiscal year, has been struggling to maintain that position following the government’s decision to change the customs tariff on electric vehicles (EVs) import. The company has been selling two variants of MG EV – 114 kW and 124 kW in the domestic market. With the new tariff structure, which came into effect in mid-July this year, importers of EVs above 100 kW capacity have struggled to sell the EVs. The government levied excise duty on top of the existing customs duty on electric vehicles above 100 kW capacity. This, according to automobile importers, has made electric vehicles costlier for buyers. In the Finance Bill for the current fiscal year, the government has imposed a 30 percent excise duty on vehicles with 100-200 kW motors. Similarly, the government has imposed a 45 percent excise duty on importing electric vehicles with electric motors of 201-300 kW capacity. For vehicles with more than 300 KW motor capacity, excise duty has been maintained at 60 percent. The data from the Department of Customs shows the import of up to 100kW EVs has increased by a whopping 371.42 percent in the current fiscal year. Nepali EV dealers have imported 990 units of 100kW EVs in the first four months of the current fiscal year. However, there has been a sharp decline in imports above 100kW. The overall market share of EVs was 3-4 percent in the fiscal year 2019/2020. It dropped significantly to one percent in FY2020/2021, due to the Covid-19 pandemic and revision in the taxation by the government. In FY2021/2022, the market share of EVs bounced to 7-8 percent. Automobile dealers predict that the overall market share of EVs by the end of the current fiscal year would be 20 percent.

While the pace of digitization of the economy is accelerating rapidly, government agencies and private businesses still lag in terms of the adoption of digital services. The gaps in access to affordable broadband internet have limited the ability of many people and businesses to use digital technologies, states a new study by the World Bank. Compared to other South Asian countries, broadband internet usage is yet to gather significant momentum. Higher data prices, unreliable coverage, and higher mobile handset prices have hindered the use of broadband services. The World Bank study titled 'South Asia’s Digital Opportunity: Accelerating Growth, Transforming Lives' states that an entry-level mobile broadband package is about 2.75 percent of the gross national income (GNI) per capita in Nepal, which is higher than the 2 percent threshold for affordability. "The cost for a fixed-broadband basket with monthly data usage of (a minimum of) 5 GB stands at 2.30 percent of GNI per capita, which is also beyond the affordability threshold of 2 percent," reads the World Bank report. In addition, handset market prices are expensive with Nepal ranking 115th out of 134 countries in terms of device affordability. The high price of devices, especially smartphones, high customs tariffs, and lack of digital literacy has contributed to these digital access gaps, according to the report. With limited players in the market, the development of the broadband market in Nepal has also been curtailed as there is limited competitive pressure on the market to drive investment and innovation. While Nepal has six national mobile network operators, the lion’s share of the market (94.5 percent) is held by just two operators, namely Nepal Telecom and Ncell, which has effectively created a duopoly in the domestic telecommunications market. Despite having a larger number of players in the internet service providers (ISP) business, internet service is primarily concentrated in urban areas. "This is due to the potential of better returns in urban areas and also due to persistent barriers to market entry," reads the report. According to the World Bank, the limited infrastructure sharing and coordination between telecom network providers and other linear infrastructure providers have discouraged new players from entering the market. The report points out that the limited reach of middle-mile fiber networks affects the quality and affordability of services, especially internet services. As a landlocked country, Nepal faces some additional costs in connecting to global telecommunications networks; prices of wholesale data services are much higher than in neighboring countries. According to the report, the absence of cable landing stations on the northeast coast of India is particularly challenging for Nepal and Bhutan, as the international bandwidth they procure needs to be routed over 2200 km to the border. "Improving the capacity and quality of key fixed network transmission routes within India that transport this bandwidth, in addition to expanding access to international connectivity via Bangladesh, can improve access to greater international capacity for Nepal and Bhutan," states the report. The lack of a national payment switch in Nepal has forced banks and financial institutions (BFIs) to pay a hefty price for digital transactions through international payment gateways. Nepal is still in the process of developing a National Payment Switch, which would make payment systems interoperable. Experts say Nepal needs to develop a national payment switch as early as possible. "Establishing the national payment switch is crucial," said Sanjib Subba, CEO of Nepal Electronic Payment System (NEPS), adding, "Once established, we can have our own domestic card like India's RuPay." Currently, the Nepal Clearing House Limited (NCHL) is working on establishing and operating the national payment switch. NCHL has divided the payment switch project into two phases. The first phase will enhance the Retail Payment Switch for enabling non-card-based transaction interoperability through the enhancement of the existing National Payment Interface (NPI) and connectIPS Retail payment switch for routing and settlement of transactions along with establishing a QR scheme. In the second phase, NCHL plans to implement interoperability of card-based transactions through the rollout of the Interoperable Card Switch and Domestic Card Scheme for Nepal. Despite the proliferation of digital businesses, especially new technology startups focusing on areas like education, fintech, and e-commerce, Nepal scores lower than India, Pakistan, Sri Lanka, and marginally higher than Bangladesh, in the Digital Entrepreneurship Index. According to the report, the growth of digital start-ups is expected to accelerate in the next five years. Nepal’s e-commerce sector is valued at close to US$30 million and is experiencing a growth of more than 40 percent per year. "Even so, e-commerce is still nascent, with limited retail infrastructure to support digitization and few digital payment options," says the report. The lack of a large digitally skilled workforce, difficulty in establishing operations, and issues relating to remittances and international payments have created barriers to the entry of large multinational digital firms in Nepal. The report states

• The gaps in access to affordable broadband have limited the ability of many people and businesses to use digital technologies.

• The higher broadband prices, poor as well as unreliable coverage, and higher mobile handset prices have hindered broadband usage.

• The entry-level mobile broadband package is about 2.75 percent of GNI per capita, which is higher than the 2 percent threshold for affordability.

• Nepal is ranked 115th out of 134 countries in terms of device affordability.

• The lack of a national payment switch in Nepal has forced banks and financial institutions (BFIs) to pay a hefty price for digital transactions through international payment gateways.

• Nepal scores lower than India, Pakistan, Sri Lanka, and marginally higher than Bangladesh in the Digital Entrepreneurship Index.

• The lack of a large digitally skilled workforce, difficulty in establishing operations, and issues relating to remittances and international payments have created barriers to the entry of large multi-national digital firms in Nepal.

The Social Security Fund (SSF) on Tuesday enforced a new working guideline to provide coverage to workers from the informal sector, foreign employment, and self-employed people. Kapil Mani Gyawali, Executive Director at SSF, said the rule is aimed at managing funds for pension and security against accident and physical disability for the workers of the three categories. “Workers from these sectors will receive similar benefits as those from formal sectors,” he said. This is the first time that SSF is making an official attempt to bring migrant workers into its cover. Gyawali said these workers will be provided with long-term pensions after they are included in the social security scheme. “We will include migrant workers under the scheme while they receive the permit for employment abroad,” he added. While considering the informal and outbound workers, SSF will maintain the minimum wage fixed by the government for the contributions of the workers in the fund. “They will have to pay a certain percentage of the minimum wage as defined by our guideline,” mentioned Gyawali. For the workers from domestic informal sectors, SSF has categorized them into four types—household, agriculture, construction and transport. Those falling under these categories will be identified as recommended by local governments. An analytical report on the informal sector published by the Central Bureau of Statistics shows that out of the total of 923,027 business establishments operating in Nepal, about half (460,422 firms) are not registered, and have been kept under informal enterprises. According to the report, out of the 3.22 million individuals employed in the country, 25.8 percent or 832,187 individuals are employed in the informal sector. The contribution-based Social Security Scheme is one of the most ambitious programs launched by the government in 2019. Under this, a contributor will receive cash in social security on a monthly basis after s/he retires at the age of 60. According to Gyawali, apart from the pension, the contributors’ spouse will also get medical expenses and the contributors will also get medical expenses for chronic disease. In the past three years, many public sector companies have joined the SSF. By enacting Social Security Act 2018, the government has made it mandatory also for private firms to join SSF. However, a large number of private organizations in particular are still reluctant in joining SSF, claiming a number of provisions in the SSF law are ‘impractical.’ According to them, the scheme is still not clear in terms of double taxation and the payment mechanism, among others. In July 2021, employees of banks and financial institutions even launched protests after SSF's attempt to force banks to join the fund. Later on, the trade unions of 22 commercial banks filed a case at the Supreme Court against the SSF. According to Gyawali, the case is now under the purview of the apex court. Citing the low participation of the private sector, the government revised the SSF working guideline for the first time in December 2020. As of now, the SSF has incorporated 381,000 employees from around 18,000 formal sector organizations and has collected over Rs 26 billion in contributions from them.