The Finance Ministry will arrange funds to build six industrial zones across the country, the finance minister said last week during a meeting with the Ministry of Industry, Commerce and Supplies and Industrial District Management (IDM).

Nanda Kishor Basnet, president of IDM, a government undertaking, said they had speeded up preparations because Finance Minister Bishnu Prasad Paudel had assured them that they would not have to worry about financing.

“We will submit a budget proposal to the Finance Ministry again this week,” he said. The construction of the industrial areas will start after the government pledges funding as per the estimated cost stated in the detailed project report, Basnet said.

“The finance minister said that the industrial areas planned to be built in Jhapa, Chitwan and Rupandehi would have foreign investment as they are expensive, but the other three in Makwanpur, Kanchanpur and Banke, which are estimated to cost a combined Rs25 billion, will be built by the government,” Basnet told the Post.

According to Basnet, the Finance Ministry has said that there will be no money problems as a budget assurance will be provided for five years under the five-year plan.

The Industry Ministry directed IDM to conduct the necessary work to begin construction of the industrial zones, said Narayan Regmi, joint secretary at the Industry Ministry.

Accordingly, IDM has almost completed all pre-construction work, Basnet said. The land identification and acquisition, preparation of a detailed project report and environmental impact assessment have been completed, he added.

According to IDM, one of the proposed industrial areas will be constructed in Damak, Jhapa on 2,100 bighas of land at a cost of Rs64 billion which has been approved by Investment Board Nepal. The industrial area is projected to create 30,000 jobs. The first phase will be implemented on 1,384 bighas with foreign direct investment, Basnet said.

The industrial area planned to be built in Mayurdhap, Makwanpur will be spread over 200 bighas and cost Rs7 billion. It will provide employment to 10,000 people. The government will build the industrial area on its own, he added.

Another industrial area will be constructed in Shaktikhor, Chitwan on 1,741 bighas. The Rs36-billion scheme will create employment for 50,000 people. Investment Board Nepal will seek funding from foreign investors to build it, Basnet said.

The industrial zone to be constructed in Motipur, Rupandehi will occupy 813 bighas and cost Rs13 billion. The Ministry of Finance and Investment Board Nepal are looking for potential financers for the project which is expected to provide 30,000 jobs.

The industrial area proposed to be established in Daiji, Kanchanpur will occupy 400 bighas and cost Rs9 billion. The government will build it with its own resources, Basnet said, adding that it would generate employment for 22,000 people.

The sixth industrial area will be constructed in Naubasta, Banke on 338 bighas of land with an investment of Rs9 billion. The government will invest in the project which is expected to create 20,000 jobs, he said.

“We will construct the infrastructure required for an industrial area such as roads, compounds, electricity, sewage and drinking water while interested industrialists will build the necessary infrastructure for them like buildings,” he said.

The construction of the infrastructure will proceed simultaneously with the construction of factories. "The infrastructure will be ready within five years after we get the budget assurance," Basnet said.

"As per the new policy that IDM has formulated, we will invite requests for proposal within six months, and guarantee the land needed for the construction of the factory. Once the firm submits its infrastructure requirements, IDM will move ahead accordingly."

It is uncertain whether there will be takers for plots in the proposed industrial estates or not, so the government should ensure that companies come forward to establish factories, Basnet said.

“To this end, we have requested Nepal Rastra Bank to provide project loans. We have also asked for waivers for companies that want to set up in an industrial area. As factories are being established in different places, it would be better if the government brings a policy to group them inside industrial zones,” he said.

“We will provide land so firms can start constructing the infrastructure they need while we build the infrastructure required for the industrial zone,” he said. “In this way, our master plan is ready,” he said.

The required infrastructure has been built at the special economic zones, but no companies are operating there. “So in order to prevent something like that from happening here, we plan to proceed simultaneously with the construction of the infrastructure and the construction of the factories.”

The land will be provided on lease. “We will not start charging rent until the construction of the factory buildings is completed,” he said. “We are discussing with the Industry Ministry regarding the subsidies that will be provided to the companies based in an industrial area,” he said.