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Government likely to launch SEZ Operation Manual

The government is planning to launch Special Economic Zone (SEZ) Operation Manual tomorrow.
The manual aimed at paving the way for the operation of Bhairahawa SEZ has been long due to kickstart the industrialisation in the country.

The constractors have completed construction in Bhairahawa SEZ but lackof law has made it difficult for the government to take it under its control to start operation. “The SEZ Manual will work as a stopgap measure as the parliament is yet to endorse the SEZ Bill,” according to the Industry Ministry that had tabled SEZ Bill in the parliament in 2008.
Currently, SEZ Development Committee – under the ministry – is looking after the SEZ construction.

The ministry has prepared SEZ Operation Manual to bring Bhairahawa SEZ into operation at the earliest. The manual is likely to be approved by the cabinet tomorrow, industry minister Karna Bahadur Thapa said, adding that the ministry has requested Prime Minister Sushil Koirala to inaugurate Bhairahawa SEZ once the operation manual is approved.

The government has spent around Rs 520 million for the construction of infrastructure and acquisition of land for the SEZ. The administrative blocks cost around Rs 60 million and the service centres around Rs 50 million.

The SEZ is spread over 35 hectares and has been divided into 68 plots of 2,200 sq m each. It is expected to house over 200 factories.

Bhairahawa SEZ – spread over 52 bighas of land – boasts of all the facilities required for industries, according to executive director of SEZ Development Committee Shankar Man Singh. “We are waiting for the SEZ Operation Manual to formally bring Bhairahawa SEZ into operation,” he said, adding that the committee will soon call for Expression of Interest from parties interested to open factories in SEZ.

Last year, the government decided to run the SEZ through the SEZ Development Committee after it repeatedly failed to introduce a separate Act. Though the committee had planned to launch the first SEZ in February-end, lack of legal teeth has also delayed the handover of the ready SEZ.

According to the SEZ Operation Manual, industries in SEZ should export 75 per cent of their total production, as they enjoy income tax exemption.

The proposed Act – that is still in parliament – has also offered special treatment to factories inside SEZs, including 100 per cent income tax exemption for five years and a 50 per cent for another five years.

Production units working inside SEZs will have to export at least 75 per cent of their production. The act has also provisioned refund of a specified amount of customs duty, excise duty and value added tax to the exporters.

The country is facing ballooning trade deficit due to increasing imports and decreasing exports. The SEZ has been planned also at Panchkhal in Kavre, Simara in Bara and Biratnagar in Morang is expected to increase exports apart from generating employment in the country.

Likewise, the government is also studying Kapilvastu, Jumla, Dhangadhi Rautahat, Gorkha, Siraha and Dhanusha for proposed SEZ.