Nepal's Investment Climate

Korean automaker cleared to invest in Nepal – but no land provided for 2 years

The uncertain political and bureaucratic climate yields non-starters

KATHMANDU: It has been two years since South Korean automaker Motrex got approval from the Investment Board to produce vehicles in Nepal. Even 22 months after the government approved the Vehicle Manufacturing and Assembled Plant project, it has not been decided where to set up the company.

It is claimed that the government is taking the initiative to attract foreign investment in Nepal. As a result of the lack of clear and smooth policies, the multinational project of the Korean company is in a state of confusion.

The company has demanded at least 100 Ropanis of land from the government for the plant. So much time has been spent seeking government land. At the time of the agreement, it was said that car production would start from 2021.

The company has repeatedly discussed with the board to get land for the construction of the plant with an estimated investment of Rs 10.54 billion. Last December, the company officials had a virtual discussion with government officials. During the discussion, it was said that the company would be established as per the Financial Act 2076, but now the work will move forward as per the Financial Act 2077.

Although the Board officials told Nepal Press that they have taken forward the task of managing the land in the industrial area of ​​Motipur in Rupandehi, the industrial area has no information. Dhamendra Kumar Mishra, Spokesperson of the Investment Board, claimed that the land would be made available to Motrex Company in the same industrial area.

Nanda Kishore Basnet, Chairman of the Industrial Zone management, told Nepal Press that there was no proposal for land for the Korean Motrex company in the industrial sector. Chairman Basnet said, “No one has come so far to ask for land for the Korean Motrex company. We have no information on this.”

The government has been holding investment conferences from time to time to attract foreign investment. A single point service center is also in operation in the Department of Industry and Investment Board to attract foreign investment. Even if foreign investors invest in Nepal, they face problems in building infrastructure including land, roads, electricity and water.

Due to such problems, Dagote Cement Company, which had come with a big investment some time ago, had to return. The government has said it will amend the current law to attract foreign investors. However, the officials of the Investment Board admit that there is no homework done for amending the Act.

Earlier, the Board had issued a letter to the Butwal Yarn Company (currently closed) land outside the jurisdiction of the Industrial Area Management Limited to be merged with the vehicle company. However, the company could not get the land as it did not fall under the jurisdiction of the Industrial Area Management Limited.

According to the statistics of the Department of Industry, in the five months of the Fiscal Year 2077/78, foreign investment of Rs. 21.11 billion has been committed in the industries and factories of Nepal.



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