"The summit provided a platform for exchange of relevant experience" Narendra Kumar Basnyat

After the conclusion of the Infrastructure Summit, Narendra Kumar Basnyat, president of CNI, spoke to New Spotlight on various issues. Excerpts:

Nov. 23, 2014, 5:45 p.m. Published in Magazine Issue: Vol: 08 No. -11 November. 21- 2014 (Mansir 5, 2071)

What do you say about summit?

The summit provided a platform for exchange of relevant experience in selected topics including, outlook and opportunities, sustainable development framework for infrastructure, investment climate, infrastructure financing mechanisms and enabling policy initiatives. More interestingly, the event had international attendees from over nine countries, including India, China, Malaysia, the Philippines, and France.

How do you assess its importance?

According to a World Bank Report, private sector investment in infrastructure stood at merely 0.66% of GDP from 2007-12, ranking the country at the bottom in comparison to the neighboring countries in South Asia. With investment exposed to multitudes of risks, infrastructural development remains an expensive and complex undertaking, further magnified by significant constraints on public financing.

Where do you see the gap?

There is a huge gap between the potentialities and realities. This can be bridged by private capital and the summit helped to identify the resources needed to fill the gap. As the government has always been in charge of creating and maintaining large-scale infrastructure facilities in Nepal like roads, energy, and airports, with help from multilateral and bilateral donor agencies, it is impossible for Nepal to meet the gap without the involvement of private sector.

What did you learn from the summit?

We also discussed Nepal’s past experiences. The discussions shed light on ways of developing the institutional mechanism. The summit also provided a platform for investors, who are looking for opportunities while reducing risks. All in all, the Summit, the first of its kind in Nepal, helped build the confidence of local investors, while attracting the foreign investors.

How did you make the summit happen?

This summit was organized in collaboration with different ministries of Government of Nepal, Investment Board of Nepal, Youth Community of Nepalese Contractors, a group of likeminded young construction entrepreneurs in Nepal and also with the support of all our development partners as well as commodity associations.

How do you describe the CNI's role in it?

Confederation of Nepalese Industries, representing large and medium-size industries in Nepal, has always been playing a proactive role in the development process of Nepal. It has been instrumental in shaping the policy guidelines of our country.

How do you highlight the importance of infrastructure?

We all agree that infrastructure development is a precursor to economic development in the current age of globalization. There is no country which has built and developed infrastructure only through governmental funding and initiative. We also know that the role of private sector is vital in this regard. However, in the Nepalese context at present, private investment in infrastructure still comes to be only a small portion of the country’s GDP.

How do you see the role of the private sector?

The private sector involvement in infrastructure can be driven through the mechanism of Public Private Partnership (PPP) where private sector works collaboratively in developing and managing infrastructure facilities and services that are to be developed and delivered by the government. The involvement of private sector in infrastructure development in Nepal goes back to 1992. Similarly, Build-Own-Operate and Transfer (BOOT) policy was also introduced, however, we have to admit that the country has not been able to yield considerable outcome from PPP mechanism.

What is the level of private investment?

Private investment, whether domestic or foreign, needs the right environment as these include- investor-friendly policies, laws and regulations related to infrastructure development. There must also be laws and regulations effectively enforced related to the security of investment as well as fair labour laws.

This summit, which CNI has taken the initiative to organize, will be an important milestone to start and sustain a national level direct conversation between government and private sector on infrastructure development so that in the years to come -- policies, regulations, networks, know-how, financing and expertise on infrastructure development can be pooled and deployed in Nepal which can fulfill the needs and demands from different sectors concerned with infrastructure development and management.

Do you think Nepal's economy is able to meet the demand?

Broadly speaking, the Nepali economy in recent years has been improving. The fundamental and micro-economic situation is gradually taking a positive trend and Doing Business Index is also improving. However, there is always room for improvement. Though our macro-economic situation is also in a satisfactory state, the same cannot be said about the socio-economic development, which is the true measure of economic growth of a nation.

Now the summit has concluded. What will CNI do?

CNI will do the follow-up on the commitments made by different actors along with the government agencies. It will also provide a platform for investors looking at Nepal as an investment destination while reducing their risk in investment.

Why is this emphasis in infrastructure?

Infrastructure development holds the key to complete economic transformation and inclusive growth and, if developed to its potential, it has the ability not only to create economic prosperity in Nepal, but also convert its alarmingly growing trade deficit into a trade surplus. The Government of Nepal, our development partners IFC, EU, JICA, WWF, ADB and many Nepalese Financial Institutions as well as corporate houses helped us to make the summit a success.

 

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