Kathmandu. The government has urgently started the process of opening an alternative development finance company worth Rs 100 billion. The concept of the company has been put forward by drafting the Alternative Development Finance Mobilization Act, 2081.
The Ministry of Finance had hurriedly started the process of including the act in the ordinance. But due to lack of preparation, it could not be included in the ordinance. The ministry is now preparing to finalize the act to create the fund. Looking at the purpose of the fund, it will not be a company established to do any new work. Because its pure purpose seems to be to provide jobs to some people safely. Rather than raising funds from outside, the fund aims to collect funds from government funds.
In which it has planned to recover funds from the Social Security Fund, Provident Fund, Citizens’ Investment Fund, Life and Non-Life Insurance Companies and foreign missions. But its purpose is to invest in infrastructure started by the Government of Nepal or the private sector. This investment is like a loan given by a bank with collateral.
Currently, the government has been investing in infrastructure by taking internal and external loans. When taking loans in this way, the Rastra Bank and the Public Debt Management Office have been working. Now the fund will do the same kind of work and has been prepared to work by keeping a margin in between.
The government had established the Nepal Infrastructure Bank (NIFRA) some time ago with the aim of connecting the private sector to infrastructure development. But this bank has not been able to make any significant progress so far. This bank, which was started with a capital of 20 billion, has not been able to do the expected work. If the existing banks and agencies are also unable to do significant work, the government is trying to set up a fund more powerful than the Rastra Bank with the aim of snatching the deposits of banks and financial institutions.
According to the source, the Ministry of Finance has introduced the concept of the fund to provide jobs to a limited number of people. Two people from within the UML were competing to become the CEO of the Investment Board. One was Sushil Gyawali and the other was Ramkrishna Khatiwada. The source said, “Ramkrishna Khatiwada was angry when the UML put forward Sushil Gyawali. After the UML agreed to form a company worth 1 trillion to appease him and provide him with a job, he withdrew from the race for the CEO of the board.” The source claims that the ministry has been working hard to provide jobs to him and some other people. The source claims that the fund was invented by powerful middlemen rather than employees of the Ministry of Finance. The source claims that the Ministry of Finance has started the process of establishing the fund based on the design of the middlemen.
The National Bank, which acts as the government’s economic advisor, has made it clear that such a fund is not necessary. An employee of the National Bank said, “This fund is not necessary under any circumstances, its purpose is not good, similar work of this nature is currently being done by the National Bank and the Public Debt Management Office. We have already written a 4-page ‘Note of Dissent’ saying that this is not necessary.”
A former governor of the National Bank said that if such funds fall into the hands of the wrong people, it can ruin the country’s economy. The governor told Singha Durbar, “If we do good work, no institution is needed now, the government has all the necessary bodies, if such institutions are created and fall into the hands of bad people, it will create problems in the country’s economy.”
The Ministry of Finance is pushing hard to establish the fund without the consent of the National Bank.
The investment rights of the general public have been taken away
The proposed law initially drafted by the Ministry of Finance stated that there would be a capital of 50 billion and 15 percent investment would be by the general public. However, before the law was submitted to the Council of Ministers, the capital and the right to invest by the general public were amended and removed. Along with the investment rights of the general public, the provision that employees working in the fund could invest has also been removed.
This is the investment area of the fund
The company will invest in 11 specialized projects of various national priorities. It will invest in energy development or electricity generation, electricity transmission or distribution, road construction or road improvement, railway construction, airport construction or improvement, tunnel construction or tunnel expansion. Similarly, it will invest in the construction of industrial development infrastructure (special economic zones, industrial parks, dry ports, information technology parks or special tourism areas). Similarly, it will invest in the construction of urban development infrastructure, establishment and operation of data centers, construction or operation of cable cars, ropeways or podways. It will invest in the construction or operation of cable cars, ropeways or podways.
The Act states that the Fund may invest in national priority projects under public-private partnership in accordance with the law implemented by the private sector. It may invest in financial instruments or other areas of a similar nature in accordance with the objectives of various funds. Similarly, there are preparations to authorize the company to purchase trains or aircraft or their parts or equipment required to operate infrastructure.
However, Section 6 of the Act specifies the areas in which the Fund cannot invest. The Fund will not be allowed to invest in projects with an estimated cost of less than one billion. The Fund will also not be able to invest in projects that cannot provide immediate returns after implementation. It will also not invest in projects that cannot provide collateral for loans or guarantees provided by the Fund.
The Fund shall not be allowed to invest in projects that seek loans by pledging bonds or debentures issued by the Fund as collateral or security. No natural person shall be allowed to invest in projects that are implemented by them. No firm, company or organization shall be allowed to invest in projects that are implemented by the current director or chief executive officer of the Fund or a firm, company or organization that has been a fundamental shareholder, partner, director or member of the Fund for at least three years prior to the appointment of such officer.
Functions of the Fund, Duties and Powers
The functions, duties and powers of the Fund include making necessary financial investments in infrastructure projects and production sectors that contribute to economic development, employment promotion and increase in the country’s gross domestic product.
The purpose of the Fund is to mobilize finance by issuing letters of credit on behalf of the Government of Nepal, provincial governments, any organized organization or project, taking collateral. It is mentioned that the fund will invest by putting the project itself as collateral.
It has been arranged to receive loans or grants from Nepal Rastra Bank, international financial institutions or foreign banks or financial institutions.
The fund aims to raise loans or equity by issuing bonds or mixed financial instruments of bonds and equity in the domestic or foreign capital market.
The fund aims to list the bonds or debentures issued by the fund in the domestic or foreign capital market and buy and sell them in the securities market or develop a liquidity market.
The Fund has been granted the authority to purchase, sell, hold or underwrite bonds, debentures, debenture stocks, securities, commercial paper or certificates of deposit issued by the Government of Nepal, Nepal Rastra Bank, foreign governments, foreign central banks or domestic or foreign financial or corporate institutions. The Fund has the authority to establish financial trusts for the purpose of investing in projects of national pride or national priority or public-private partnership projects that can provide significant returns to the national income.
प्रतिक्रिया दिनुहोस्