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State info minister’s Rs 50m Ncell demand raises pvt sector’s hackles

• Says such matters will hit foreign investment plans

Minister of State for Information and Communications Surita Kumari Shah has allegedly demanded Rs 50 million from Ncell, the country’s leading GSM mobile operator, in return for a permission to import microwave frequency equipment to expand its services, a source at the telecom said.

Another foreign company was also recently forced to pay a hefty sum to the Ministry of Industry to conclude its joint venture agreement with its Nepali partner.

The events unfold as the country will soon be marking the ‘Nepal Investment Year (NIY) 2012-13’, through which the government hopes to rope in large-scale foreign investment. The government has already set up the Investment Board and plans an investment summit for the next fiscal year.

However, the Ncell episode shows that doing business in Nepal is not a cakewalk for foreign investors, while corruption in political parties is also on the rise.

“When multinationals like Ncell is being asked for money, it will definitely hit Nepal’s ambition of attracting huge investments in the next fiscal year,” Suraj Vaidya, the president of Federation of Nepalese Chambers of Commerce and Industry, said.

According to the source, Ncell had enquired with the Ministry of Information and Communications (MoIC) after it was denied permission to import the equipment. The minister and her advisor told Ncell that their permit would be processed within a day if they paid Rs 50 million, the source added.

The story doesn’t end here. Minister Shah insisted on the bribe during her telephonic conversation with senior Ncell officials. Ncell was adamant on not making the payment, and three weeks later, Shah’s advisor Gauri Shankar came down to Rs 20 million, the source said. Ncell, however, refused to pay that amount also.NCell from Pg 1

A lot of multinationals, including Teliasonera, have zero tolerance policy when it comes to corruption, the source said.

“It’s a national shame when a sitting minister openly asks for bribe from foreign investors,” Rameshwor Khanal, the economic advisor to the prime minister, said.

The private sector said Ncell’s experience is nothing new for them. “Before 1990, the private sector had to pay money to get licences. After 1990, they paid politicians to get bank loans,” said a businessman. “Now, we are paying them just to make sure our businesses are not disturbed by their sister bodies.”

Many in the private sector term the latest case as a fallout of prolonged political transition. “Many political parties have split in the last three years. With uncertainty over their political career, party leaders use their energy to amass money through whatever means they can,” said a businessman.

Interestingly, a recent report by Transparency International (TI) has revealed that political parties are the most corrupt institutions in Nepal. According to the report, “Daily Lives and Corruption, Public Opinion in South Asia”, 53.7 percent of the respondents in Nepal said political parties were the most corrupt institutions.

Khanal said that until five to six years ago, sitting ministers did not dare demand money as brazenly as they are doing now. “In those days, they were afraid their parties would take action against them. Now, they do not care about the party,” he said.

Increasing demand for money from the political class, especially those in the Cabinet, is forcing many business houses to move to the service sector or trading from manufacturing. “One of the reasons why we sold our stake in Gorkha Brewery and Bottlers Nepal to foreign investors was excessive demand for money,” said Rajendra Khetan, the chairman of Khetan Group.

For Khanal, the Ncell episode also indicates what lies ahead when Nepal fully embraces the federal structure. “This would make the pillars of federalism weak,” he said. “It indicates that there will be more misuse of the state coffers in the federal states.”

Posted on: 2012-04-26 08:22