The government has decided to move ahead with the construction of the Naubasta Industrial Zone in southwest Nepal which has been stymied for years due to land disputes.

Along with the Rs9 billion trade infrastructure project, other schemes announced years ago are now gradually beginning to stir.

Problems related to land acquisition, compensation distribution and other matters have prevented the development of many projects, chiefly construction of the industrial zone.

Last year, residents of Baijanath Rural Municipality in Banke protested against the government’s decision to set up an industrial area in the local unit. They claimed that freed Kamaiyas (bonded labourers) and landless people had been living on the land proposed for the industrial area for years.

Despite the disputes, the government is now continuing with the work.

In March 2016, the government announced that an industrial zone would be established at Naubasta. Following the announcement, the government set up the Industrial Area Project Office in November 2018.

Despite being held up for years because of land disputes and other issues, industrialists and traders have been encouraged by the progress made in recent days.

Krishna Bahadur Pun, chief of the Naubasta Industrial Area, said that things were moving forward. “Work on the infrastructure will start soon," he said. Pun said that efforts were being made to resolve the land dispute at the construction site.

The government had announced that it would set up an industrial area on 525 bighas of land in Baijanath seven years ago. Out of the total area, 338 bighas are unoccupied while the remaining land is home to several settlements of freed Kamaiyas and landless squatters.

A total of 111 plots ranging in size from 9 to 30 ropanis will be constructed in the industrial zone.

The government estimates that a total of Rs8.77 billion will be required for the project.

Although the industrial area was set to be completed within five years, officials said the time limit was extended for the preparation of an environmental impact assessment and detailed project report.

All the necessary facilities will be provided to the factories established in the industrial zone, according to the detailed project report.

Infrastructure such as roads, electricity, water, industrial residence, administration, service, customs, petrol pump, water treatment plant and heavy truck parking will be built in the industrial area.

According to Industrial Area Management Services, applications will be invited from potential investors desiring to establish factories in the industrial area. The government estimates that the industrial area will create more than 20,000 jobs.

Plots have been allocated according to industry clusters, and plants based on local raw materials will be given special consideration.

"Industries based on local raw materials are our priority," said Pun. "Apart from cement plants, other manufacturing units will operate within this industrial zone," he said.

Industry entrepreneurs expect that the economy of the area will flourish after the establishment of the Naubasta Industrial Zone.

Krishna Prasad Shrestha, former president of the Nepalgunj Chamber of Commerce and Industry, says the Naubasta Industrial Zone is an important pillar for industry entrepreneurs and traders.

"After the establishment of the industrial zone, it will help industry to flourish," he said. “I believe that the establishment of the industrial area will help in boosting Nepali industry and uplift the overall economy of the country.”

Although there were some problems in the past during the construction of the Naubasta Industrial Area, now there is a lot of hope among industry entrepreneurs. Based on the detailed project report, the project office has received 350 letters of intent.

The project is expected to be completed within five years from the fiscal year 2020-21.

In order to attract and promote industry in the industrial sector, the government has announced complete exemption from land rent for a minimum of five years. The full rental rate will be applied only after 10 years.

There will be discounts on the water bill and a request will be made to the government to provide reductions on electricity charges based on consumption, and the existing industrial zone management and operation regulations will be amended in time to make them industry-friendly.

Industrial Area Management said it would work to secure a waiver of customs delay charges for the import of raw materials and equipment required by the companies in the industrial area.

In view of the difficulty of obtaining loans from banks to establish factories in the industrial area, the management has said that it will simplify credit issue.

Nanda Kishore Basnet, chairperson of Industrial Area Management, said that after the first phase of the construction of infrastructure in the industrial area is completed, the second phase would begin soon.

"We are in the process of resolving the disputes that have arisen at the construction site," he said. According to him, they have been discussing the issue with the commission formed to resolve the land issues.