Cabinet okays BIPA, DTAA signing
Gives go-ahead to the $250m line of credit deal
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KATHMANDU, OCT 20 -
The Cabinet on Wednesday authorised Prime Minister Baburam Bhattarai to sign three agreements with India and approved a 37-member official delegation for his four-day visit that begins Thursday.
Amid strong protest and reservations from four Maoist ministers, the Cabinet endorsed signing of the Bilateral Investment Protection Agreement (BIPA) with India. Ministers were concerned about liabilities Nepal will have to incur from such an agreement.
“Amid some reservations from some ministers, the meeting authorised the PM to take a final call,” a minister told the Post. Once the deal is inked, Nepal will have to treat Indian companies at par with national companies, guaranteeing that they will not be nationalised, while also creating a legal environment to facilitate their compensation claims for non-commercial losses.
The Cabinet also gave a nod to sign the Double Taxation Avoidance Agreement, which will end the need for Indian investors to pay taxes back home on repatriation of income once they pay taxes in Nepal. The meeting also paved the way for clinching the $250 million line of credit with India that New Delhi had announced in 2010 during the state visit of President Ram Baran Yadav.
The US $ 250 million will be spent on infrastructure and development of hydro and irrigation related projects. Export and Import (Exim) Bank of India and chief of Foreign Aid Division at the Ministry of Finance will sign the agreement on behalf of the respective governments.
Besides clinching the three agreements, the PM will request support for a dozen projects for infrastructural development. The PM is also likely to seek a soft loan of US $1 billion for the construction of a Kathmandu-Tarai fast track. The fast track will link Kathmandu and Nijgarh in the Tarai, where Nepal is preparing to build an international airport. The PM is also expected to seek Indian help for construction of the airport.
Bhattarai will also take up the issue of importing 250 MW electricity from India and construction of a transmission line of 440 kv between Mujaffarpur and Dhalkebar.
Posted on: 2011-10-20 08:57
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