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Why did the investment summit fail to produce the desired result?

Why did the investment summit fail to produce the desired result?

The two-day third Investment Summit concluded on Monday with only a few investment commitments. Observers say Nepal Investment Board has failed to send out positive messages about the investment climate in the country.

The Summit saw the stark lack of coordination among the government agencies and there were several loopholes in the management of the event. Though the government tried to give a message that there is an all-party consensus and policy continuity, international investors are still skeptical about several issues such as security of the investment, tax system, markets and bureaucratic red-tape. The amendment of nine acts was conducted at the eleventh hour through the ordinances.

The event saw participation of over 2,500 delegates including over 800 foreign delegates. The government showcased a total of 154 projects. It sought expressions of interest for 19 projects. Investors have been given 45 days to submit their expression of interest for hydropower projects and 35 days for other projects.

According to the Office of the Investment Board Nepal (OIBN), representatives of the World Bank Group as well as from China, India, Kuwait, UAE, UK and US held discussions with concerned stakeholders in Nepal and studied investment opportunities.

Officials of the OIBN said foreign delegates showed concerns and made queries on different projects showcased during the summit. But there were no significant investment agreements.

On the first day of the summit, BLC Group of Nepal signed an agreement with Yotta Data Services of India to set up a data center in Ramkot, Kathmandu. Likewise, the Federation of Nepalese Chambers of Commerce and Industry (FNCCI) signed a Memorandum of Understanding with the National Chamber of Commerce, Malaysia for bilateral trade and investment cooperation. FNCCI also signed an MoU with the Federation of Malaysian Manufacturers.

Likewise, the Nepal Association of PPP Professionals and Practitioners (NAPPP) signed an MoU with the World Association of PPP Units and Professionals (WAPP) for promoting private-public partnerships on the second day of the summit. Similarly, Saakha Group of Nepal signed an agreement with the Hong Kong-based Bower Group for cooperation in the wellness resort and hospitality sector. An investment of 100m yuan has been proposed in this venture.

Separate MoUs were also signed between Nexgen Management Solution Pvt Ltd of Nepal and MABC Investment of China, and between the Federation of Nepalese Industries and Commerce and Dongguan Jinyang Lighting Co Ltd of China for investment facilitation. Likewise, Hydroelectricity Investment and Development Company Ltd signed an MoU with the Non-Resident Nepalese Association to mobilize workers' remittances for hydropower development.

Meanwhile, the Department of Industry (DoI) approved investment proposals worth Rs 9.13 billion for four different projects. During the summit, DoI also inaugurated an automated system for investment approvals. Japanese bank interested in Nijgadh airport project

OIBN had showcased the airport project in the 2019 Nepal Investment Summit as well. This time, OIBN bundled the Nijgadh International Airport project with the Tribhuvan International Airport (TIA) of Kathmandu. The Public-Private Partnership Study Committee formed by the tourism ministry had recommended to the ministry to include a management contract for TIA as an incentive for the Nijgadh International Airport project.

Since the number of passengers using TIA is expected to reach 20 million by 2030, the government has been considering developing an international airport in Nijgadh, Bara. An expressway connecting Nijgadh to Kathmandu is already under construction. As per the feasibility study conducted in 2011, the Nijgadh International Airport is estimated to cost $6.56bn. OIBN has proposed to build the airport under the build, own, operate and transfer (BOOT) model.

Addressing the concluding ceremony of the summit, former Prime Minister and CPN-UML Chairperson KP Sharma Oli said all political parties share a common commitment to fulfilling Nepal’s aspirations for development and prosperity. He stated that Nepal has emerged as a new investment destination and assured the foreign delegates that the country remains committed to ensuring investment security. The summit featured different plenary and parallel sessions on different themes.