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The draft of the detailed project report (DPR) of the Raxaul-Kathmandu Cross-Border Railway Project has been handed over to Nepal. India handed over the draft DPR to the Ministry of Physical Infrastructure and Transport (MoPIT) this week. According to MoPIT officials, the southern neighbor will submit the final DPR to the Nepal government after incorporating suggestions from Nepal. The ministry’s spokesperson Bhimarjun Adhikari acknowledged that the draft DPR of the Raxaul-Kathmandu Railway Project has been received from India. “The draft DPR has been sent mainly seeking suggestions from Nepal,” said Adhikari, “We will submit it to the Railway Department who will study the report and make suggestions. Based on that, India will finalize the DPR and submit it to us.” India’s Konkan Railway Corporation Limited (KRCL) has been doing the DPR of the railway project which will connect Kathmandu with the Indian border town of Raxaul in the south. As per the memorandum of understanding (MoU) signed between Nepal and India on October 8, 2021, the detailed project report of the project should have been completed within 18 months, i.e., by mid-April, 2023. The Indian side has submitted the draft DPR two and half months later than the stipulated time. India has already given the report of the preliminary engineering and traffic survey of this railway to Nepal. According to the preliminary report prepared by KRCL, the length of the proposed Raxaul-Kathmandu railway will be 136 kilometers. As per the initial report of the Konkan Railway, a total of Rs 320bn will be required to build the broad-gauge Kathmandu-Raxaul Railway. Once completed, the broad-gauge line will give the Nepali capital a direct connection with the Indian railway network, enabling non-stop train travel to all Indian cities. The initial report of the project has shown that there will be 32 tunnels, with the longest would be eight kilometers long. The 136-kilometer-long railway project would have 40 kilometers of tunnelway and 35 small and large bridges. The preliminary study has shown that there will be 13 stations on the railway line. After receiving the DPR, the discussion about the modality of construction of the project will begin, according to the ministry officials. Nepal has been requesting India to build the project with a grant. Nepal and India had agreed to construct a cross-border electrified railway connecting Raxaul and Kathmandu during the then Prime Minister KP Sharma Oli’s India visit in April 2018. The two countries, in August 2018, exchanged a memorandum of understanding to carry out a preliminary engineering-cum-traffic survey of the broad-gauge line. With the submission of the draft DPR by India, the basis for the construction of this project has now been set. Once construction is completed, the railway line will provide Nepal with direct access to the huge Indian market. The electric railway line will also help replace fuel-based transportation, saving huge amounts of money being spent on the import of fuel, according to ministry officials. After the construction of the railway, goods can be transported directly to Kathmandu from India and third countries.  

With the deadline to repay the loans ending in mid-July, the Pokhara-based Fulbari Resort & Spa has again sought a nine-month time extension. Piyush Bahadur Amatya, chairman of Fulbari Resort has recently written to Nepal Bank Limited seeking nine-month time to repay the loans. Nepal Bank, in the second week of November 2022, had given a deadline of mid-July, 2023 to Fulbari Resort to pay the loans. An agreement was reached between the bank and Amatya to pay the principal and interest of the loans by mid-July, 2023. Amatya has promised to pay Rs 2.75bn to the bank if the loan payment period is extended by another nine months. However, Nepal Bank has not decided on Amatya’s request. The bank’s CEO Krishna Bahadur Adhikari said that they are currently discussing Amatya’s proposal. “The deadline given to Amatya is ending in mid-July. But he hasn’t paid any loan during this period,” said Adhikari, “We have forwarded his (Amatya’s) proposal to the bank board.” A consortium of banks led by Nepal Bank had given loans worth Rs 1.31bn to construct the five-star property in the mid-90s. Mired in financial difficulties, Fulbari Resort has not paid the regular installment and interest of the loan for more than a decade. According to CEO Adhikari, if the Nepal Bank board decides on a time extension, the resort will get additional time to pay back the loans. “Otherwise, we will initiate the auction process,” he said. The resort owes nearly Rs 4bn of loans taken from Nepal Bank as well as Rastriya Banijya Bank, and the Employees’ Provident Fund. As the lead bank, Nepal Bank had initiated the auctioning of the hotel in the last fiscal year. But Amatya went to court to stop the process. However, the Patan High Court in the first week of August 2022 issued an order in favor of the bank, allowing it to proceed with the auction. The 165-room five-star hotel was one of its kind properties in Nepal when it began operation in the late 90s. The resort came into operation in 1998 when Nepal was celebrating the Visit Nepal year 98. Established to cater the high-end tourists, the hotel has its own golf course also. Four years ago, Amatya and Nepal Bank signed an agreement to reopen the resort after it was shut down in 2017 following a labor dispute. At that time, Amatya committed to repay the bank loan and take the remaining money by selling the land owned by the resort. In 2019, the resort decided to reopen under new management. The Nepal Bank agreed to debt restructuring after the resort decided to bring in Marriott International to manage the hotel. However, the outbreak of the Covid-19 pandemic spoiled the plan.  

The price of gold has increased by Rs 100 per tola in the domestic market on Thursday. According to the Federation of Nepal Gold and Silver Dealers’ Association, the precious yellow metal is being traded at Rs 110, 700 per tola today. It was traded at Rs 110, 600 per tola on Wednesday. Meanwhile, tejabi gold is being traded at Rs 110, 150 per tola. Similarly, the price of silver has increased by Rs 15 and is being traded at Rs 1,395 per tola today.

The acute shortage of liquidity, rising interest rates, and the slowdown in demand have hit the industries in Madhes Province badly in the first half of the current fiscal year. As industries grapple with multiple issues, their capacity utilization dropped by 5.36 percent points in the first half of FY 2022/23. The average capacity utilization of industries in Madhes Province stood at 44.56 percent in the first half of FY 2022/23 compared to 49.92 percent during the same period of the last fiscal, states a new report of Nepal Rastra Bank (NRB). The decline in the average capacity utilization of the industries in the province is due to the shortage as well as the price rise of raw materials, says the NRB report. As the supply of raw materials remained not easy and the construction sector came to a standstill due to the economic recession, the industrial production and activities in the Madhes Province suffered in the first half of this fiscal. “The capacity utilization of the industries producing vegetable ghee and oil, rice flour, beverages, cement, iron rods, and medicinal products has decreased compared to the last fiscal,” says the NRB report. According to the NRB report titled “Provincial Economic Activities Report-Koshi Province”, the liquor industry has the highest capacity utilization of 96.32 percent, while the vegetable ghee industry has the lowest capacity utilization of 3.85 percent. The capacity utilization of the wheat flour industry stood at 91.69 percent, the aluminum industry at 71.25 percent, the iron rod industry at 64.13 percent, the soap industry at 63.43 percent, and the soft drink industry at 37.23 percent. The capacity utilization of the soybean oil industry stood at 28.63 percent, the synthetic yarn industry at 6.65 percent, the animal feed industry at 37.87 percent, and the steel industry at 13.90 percent. The slowdown in the construction sector has badly hit the cement industry whose capacity utilization, according to the NRB report, has fallen to zero in this fiscal year. The capacity utilization of the cement industry during the first half of the last fiscal was 98.3 percent. Similarly, the capacity utilization of the iron rod industry and vegetable ghee industry also declined in this fiscal. With industries operating below capacity, the bank and financial institutions’ (BFIs) loan disbursement to them grew marginally in the first half of FY 2022/23.  The BFIs’ loan disbursement to industries surged by 1.5 percent to Rs 114.02bn. The BFIs’ loan to the industrial sector had stood at Rs 112.34bn during the first half of FY 2021/22. Of the total industrial loans disbursed by the BFIs in Madhes Province, Parsa district has the highest share of 59.97 percent while Saptari district has the lowest share of 2.32 percent. As the majority of industries are based in the Parsha district, the BFIs’ disbursement of loans to the district stood at Rs 68.39bn. Of the total loans, the share of the non-food-producing sector is the highest. The BFIs disbursed 53.01percent of total industrial loans) to the non-food-producing sector. The agriculture sector was the second highest recipient of industrial loans with the BFIs disbursing 28.98 percent of loans. The BFIs’ loans to the electricity and gas sector surged by 90.9 percent, the mining sector by 43 percent, and the non-food-producing sector by four percent. However, loan disbursement to the construction sector declined by 50 percent in the first half of the current fiscal.