National Housing Expo 2011, Ratnagar, Chitwan














National Housing Expo concludes on a high note


The ten day long Nepal Tourism year and National Housing Expo 2011 concluded with grandeur at Ratnanagar, Chitwan. The event has been organized by Narayani Land and Housing Entrepreneurs Association. This expo has given platform to various exhibitors to put up more than 150 stalls to display their products and services. The mega event features housing real estate companies, furniture dealers, construction materials ,decoration materials,financial institutions, restaurants, hotels among others.This expo has been successful in meeting the expectations of all exhibitors, visitors and consumers as well.

Dinesh Kumar Chuke, president-organizing committee, expressed satisfaction over the fact that this expo has also given mileage to housing and tourism business in Chitwan. The expo was said to be participated by over 100,000 visitors.The exhibitors said that the kind of encouragement they have received from the visitors have only added to their zeal to better their business in the future.

Homemaker makes them

Homemaker at Maitighar and Kupandole offers a whole range of furniture you may want for your home. One of the established names in the Nepali furniture market, the company started operations in 1982. It stocks furniture ranging from side tables, coffee tables and home study tables to sofa sets, dining tables and beds.

“For those who want a complete solution, Homemaker is the perfect destination. We provide both furniture and furnishing. Customers can choose from our selection of more then 400 designs,” said Sanchit K. Shrestha, director of Homemaker. “We also provide interior designing service on a turn-key basis.”

Homemaker manufactures 90 percent of its furniture products at its factory at the Patan Industrial Estate. The company has around 300 employees. It has its own designers to create new designs. “We want to develop Homemaker as a depot of home products. So we play with designs and try to provide people with designs as per their choice and also provide furnishing and interior services,” said Shrestha.

He claimed that the products manufactured and stocked by them were of a very high quality. “Quality is something we never compromise on. We want to make sure our products are reliable to strengthen our motive of building a strong brand image by building love and trust,” said Shrestha.

Prices at Homemaker range from Rs 700 for a lamppost to Rs 300,000 for a sofa set. If you purchase furniture items in a package, the company gives a discount depending on its value. “We are considered to be a one-stop shopping destination for customers from the higher income bracket. However, we want to change this concept by catering to middle class people from each and every aspect,” said Shrestha. “However, there will be no compromise in terms of quality.”

Shrestha added that they would be focusing on products suitable for the middle class. “In 2011, we will be manufacturing relatively cheap furniture items suitable for middle class people. We will be bringing in product packages ranging in price from Rs 60,000 to Rs 70,000.”

The company will also be launching Homemaker Superstore at Dhobi Ghat within the next 12 months. “Due to lack of adequate space, we are unable to feature the whole range of our products at our stores at Maitighar and Kupandole. At Dhobi Ghat, we will be featuring all our best and innovative products on at least five storeys,” said Shrestha. “We want to make sure that our customers will get to select products from a wide range of products.”

Homemaker has been seeing an annual growth of around 20 percent in the furniture segment. “Due to increasing brand awareness among Nepalis, we are witnessing a healthy growth rate. In earlier days, we were facing competition from Chinese products in terms of price. However, the competition currently is in both price and quality; and in the latter category, Chinese products cannot compete with us,” said Shrestha. He added that strong after sales service was also one of the factors contributing to the continuous growth. The company claims that it holds a market share of around 25 percent in the organised furniture sector.

Besides furniture, Homemaker also provides interior designing services on a turn-key basis. In the interior segment, the company holds a strong portfolio with tie-ups with most of the big corporate houses, banks, embassies, NGOs and INGOs. The interiors done by Homemaker at the offices of the chief executive officers of Nepal Investment Bank and Himalayan Bank are considered to be one of the finest interiors in Nepal, claimed Shrestha.

source:The Kathmandu Post

Class B, C Fls clever in realty lending

Development banks and finance companies have realty loan exposure of 30 percent compared to 20 percent of commercial banks.Total lending of development banks (‘B’ class FIs) and finance companies (‘C’ class FIs) to the realty sector stands at around Rs 37 billion, according to the Nepal Rastra Bank (NRB). While finance companies have lent Rs 24 billion in the sector, development banks’ lending stands at Rs 13 billion. Commercial banks have provided loans worth around Rs 100 billion in the sector. There are 83 development banks and 79 finance companies in the country. However, not all have made uncontrolled lending. FIs from Kathmandu and Chitwan have made huge lending in the sector, according to a senior NRB official. “Those making uncontrolled lending will have to struggle to reduce their realty loan exposure,” said the official.
The central bank has directed BFIs to reduce their exposure to the realty sector, including home, apartment, commercial complex and land, to 30 percent by mid-July 2011. They should bring down the size to 25 percent by mid-July 2012.

“As only a few national level development banks have huge investments in the sector, it will not create a big problem,” said Jhapat Bohora, president of Development Bankers’ Association. “The situation can be handled.”

Bohora added that many FIs have adopted ‘wait and watch strategy’. “Entire economy will receive severe blow if realty sector recession continues,” he said.Finance Companies’ Association of Nepal President Ram Shanta Shrestha said they have stopped lending in the sector and are focusing on loan recovery.

Realty traders say they are not even being able to pay bank interest due to the recession in the sector. They are finding it hard to sell land. “How can we repay loans without selling land?” asked an official of Housing Developers’ Association.

Although deposits in ‘B’ and ‘C’ class financial institutions had increased last year, their deposit collection is not so encouraging this year. During the first quarter of the current fiscal year, deposit growth of development banks and finance companies stood at 4.1 percent and 4.2 percent, respectively. The rate was 52 percent and 24 percent, respectively, last year, according  to NRB.

Although the central bank is yet to receive financial details of the second quarter, the NRB official said prospects are not so encouraging.

source:The Kathmandu Post(2011),"Class B, C Fls clever in realty lending", The Kathmandu Post, 27 feb 2011

Banks put payback squeeze on realtors

In a bid to bring down their realty loan exposure to the level prescribed by the central bank, banks have started to press realty traders to sell land and repay loans at the earliest.The monetary policy has provisioned that banks and financial institutions (BFIs) should reduce their loan exposure to realty to 10 percent and housing to 25 percent this year.

Although banks have made long-term lending to the real estate sector, they are exerting pressure on borrowers to sell land for early repayment. This move has helped them reduce the size of lending in the sector to some extent. Bankers, however, prefer to use the word ‘suggestion’ instead of ‘pressure’. “Possibilities of downturn in realty price are high as long as land remains unsold,” said a chief executive officer of a commercial bank. “We are suggesting them to sell land as they are even struggling to pay interest.”

Banks had made lending up to 80 percent of the market price during the heydays of realty business. “There is a risk that traders may not even get their cost price,” said Ajay Shrestha, chief executive officer of Bank of Kathmandu. “That is why we are suggesting them to sell their land and repay loans.”
Shrestha said traders may not be able hold land for a long time as they also have to pay interest to banks. “It is better to sell land and repay loans before price downturn begins,” he said.

Commercial banks have invested more than Rs 100 billion in the realty sector as of the second quarter of the current fiscal year. The figure is around 20 percent of the total lending. Banks’ loan and advance stands at Rs 502 billion. A big chunk of lending is in land.

Realty traders also admit that banks are worried about risks associated with the downturn in real estate prices. “Banks will be affected if the real estate market does not improve,” said Bhesh Raj Lohani, secretary of Nepal Land and Housing Developers’ Association. “It is natural for them to worry and take measures to ensure early repayment.”

Some traders said banks are pressing them to repay loans by selling land or repay 25 percent of the loans immediately. Major realty lenders—Kist, Machhapuchhre and DCBL banks—have brought down their total loan exposure by Rs 1 billion during the second quarter of the current fiscal year compared to the same period last year.

New banks and banks having insignificant loan exposure to realty have, however, increased their lending to the sector. Global, Janata, Laxmi, Lumbini, Mega, Nepal Bank, NIC, NMB and SBI are some banks that have increased their lending to the sector over the period. Commerze and Trust Bank, however, has not made any lending to the sector, according to its financial report of the second quarter.

Of late, both non-performing loans (NPL) and provisioning of banks have grown with the delay in repayment of realty loans. Both bankers and realty traders are saying that the central bank should be more flexible on lending in the sector. “There are no risks in home loans as house is the basic need of people,” said an official of Nepal Bankers’ Association. “We have asked the central bank to be more flexible on home loans.”
Lohani also said that they have a similar request to the central bank. With the slowdown in realty trading, there has been a significant drop in revenue collection from the sector. Revenue collection from the sector used to be higher than targeted until the last fiscal year. This year, the situation is just opposite. During the first six months, five land revenue offices of the Kathmandu Valley have collected Rs 1.54 billion, whereas the target stands at Rs 3 billion.

source:Shrestha, Prithvi, Man(2011),"Banks put payback squeeze on realtors", The Kathmandu Post:Money, 24 feb 2011, page.1

Documents required during the purchase of a house


Checklist of a few important documents that are required during the purchase of a house:

• Lal purja (Land-ownership certificate)
 • Char killa (Four boundary certificate)
 • Blueprint
 • Planning permit from concerned Town Development Committee
 • Approval from IEE or EIA or Ministry of Environment
 • Approval from concerned division office
 • Required certifi cates and Drawing approval from the local authority (VDC/Municipality)
 • Sale agreement
 • Rajinama
 • Construction drawings of the building
 • Receipts of payments made like Property Tax, Electricity,

Maintenance payments and registration fees. You may check the originality of the above documents in the official records at the respective authorities/government offices.

Westar Properties certified with ISO 901:2008


Westar Properties Pvt. Ltd, a member of Golyan Group, has been certified with ISO 9001:2008 Quality Management System and OHSAS 18001 Occupational Health and Safety Management System by Austria based international certification company Quality Austria. Westar Properties was certified for meeting quality standards on their ongoing project Westar Residency in Balkumari, Lalitpur, according to a company press release.

Booking open for jhamsikhel colony

 
1298089038jhamsikhel_400.jpg
Kohinoor Hill Housing has opened bookings for its jhamsikhel colony located at Hasapata Ganeshsthan Sanepal, lalitpur.The colony consists of individual homes of 2 and half storey with price starting from NRs. 92.30 lakh.The area of homes ranges from 1537 sq. ft. to 1628 sq. ft.

Price and Area Detaila are as follows:
Land:3 anna with builtup area: 1537 sq.ft.
Price starting from NRs. 92.30 lakh

Land: 3 anna with bultup area: 1628 sq.ft.
Price starting from NRs. 94 lakh

For more details contact:4107789,4107825

National Housing expo 2011 begins


A ten-day Nepal Tourism Year and National Housing expo 2011 began at Ratnagar in Chitwan on Friday.The event has been organized by Narayani Land and Housing Entrepreneurs Association. The event was jointly inaugurated by Ichha Bahadur Tamang, Rajesh Hamal,Deepak Bista and Yogendra Shakya.


The mega event organized by Narayani Land and Housing Entrepreneurs Association features housing real estate companies, furniture dealers, construction materials and decoration materials, among others. The organizers have included Sauraha, Devghat, Golaghat,Hatibang, Sirai Chuli, Maula Kalika Mandir, Ganeshsthan and Bish Hijari Taal, among others.

According to the organizers, there are more than 150 stalls related to real estate, constructions,auto and tourism products and services. The organizers believe that the expo will give a boost to the housing sector and tourism sector in Chitwan as well.

Dinesh Kumar Chuke, president organising committee is hopeful that Expo will be a great success with number of visitors expected to be over 3,00,000.

Modular kitchen offer from Downtown Housing on National Housing Expo

Downtown Housing Company is participating in the national Real Estate Expo, commencing this February (18th-27th, 2011) in Saurahachok, Ratnanagar municipality (Hotel Gangotri highway area).It is organized by Narayani Land and Business Association.

On this occasion, our esteemed clients will be offered a modular kitchen on booking. This offer is valid only for the Mela and is applicable for both the projects Cityview and Downtown apartments.

Real sector reluctant to submit financial report

At the time when the need of bringing more real sector companies in the Nepali capital market is being asserted, the existing companies under the manufacturing sectors in the stock exchange are less interested in following the regulation.

Among the 18 listed manufacturing companies on Nepal Stock Exchange (Nepse) – only three have submitted their financial report of the second quarter to Securities Board of Nepal (Sebon) on time. The listed companies have to submit their financial report of the second quarter of the fiscal year to the regulator by February 13.

The three companies that have submitted the reports within the time are Bottlers’ Nepal Ltd, Bottlers’ Nepal (Terai) and Himalayan Distillery Ltd.

The overwhelming presence of financial intermediaries in the secondary market is supposed to do not much good to the secondary market thus the stakeholders have been expressing the need for more manufacturing companies to enter the capital market.

“In the absence of tight regulations and penalties, the companies keep disregarding the rules,” said the stock market analyst, Rabindra Bhattarai.

Of the total 197 listed companies in the stock exchange, 169 are banks and financial institutions dominating the secondary market and creating tussles at times among the regulatory authorities of the capital market-Sebon and financial market-central bank.

However, the experts are not that much hopeful of increasing the numbers of real sector companies in the capital market in the absence of tight regulations.

“Increasing the numbers of the ‘real sector’ companies will not be beneficial to the capital market or the shareholders unless the companies are sincere about their responsibilities after going public,” Bhattarai said, adding that most of the companies do not care about the investors – all they care about is raking in money from the public and spend it to fulfil their own interest, putting the investors’ interest on the backburner.

“Unless the attitude of the promoters of the the real sector companies is changed and they are conscious about their goodwill in the market, the quantitative increment in numbers of productive sector companies in the stock exchange will do nothing to boost the confidence of the market,” he said, adding that the peformance and the good corporate governance of the listed real sector is an example.

Of the total listed companies in the secondary market that were supposed to submit the report to Sebon, 119 have submitted their financial report within the stipulated time.
source: The Himalayan�Times(2011),"Real sector reluctant to submit financial report ", The Himalayan Times, 19 feb 2011

Nepalis imprisoned in land fraud case

Two Nepalis were sentenced to two months in jail for not returning a property they had cheated from a US citizen as per a two-year-old Supreme Court order.

The Supreme Court jailed Ashok Amatya, resident of Panouti-5 Kavre District and his father-in-law Mohan Ba hadur Mainali, resident of Ratnanagar-9 Chitwan, for their involvement in cheating Francine Augustine Marshal. A division bench of Tahir Ali Ansari and Gyanendra Bahadur Karki delivered the verdict today following a final hearing. The bench found them guilty of not transferring a land, plot No 443 with 10 kattha area at Bachhouli VDC-2, Chit wan District, to Blue Lagoon Pvt Ltd owned by the US citizen as per the agreement signed on February 23, 1997.

"Since I am not a Nepali citizen, the land could not be registered in my name, so we signed a contract in his name and agreed to return it to the company later when the company is formally registered. However, he did not return the land and reg istered it in the name of his father-in-law," she claimed in the petition.

On February 21, 2008, the Supreme Court convicted them for cheating and ordered to compensate the US national by paying Rs 30,76404. But when they did not abide by the apex court order, she again filed a contempt of court case against them on January 13, 2009.
source: The Himalayan Times

Offer from Downtown housing on National Housing Expo 2011

Downtown Housing Company is participating in the national Real Estate Expo, commencing this February (18th-27th, 2011) in Saurahachok, Ratnanagar municipality (Hotel Gangotri highway area).It is organized by Narayani Land and Business Association.

On this occasion, our esteemed clients will be offered a modular kitchen on booking. This offer is valid only for the Mela and is applicable for both the projects Cityview and Downtown apartments.

Real Estate And Housing Business: Now In The Doldrums

The real estate and housing business has been in the doldrums for around a year. The business has met with this fate since Nepal Rastra Bank issued stringent directives on this business last year in order to stop artificial skyrocketing prices of land and buildings. As per the directives, housing and real estate loans have to be restricted to 30 per cent of the total portfolio by the end of this fiscal year and to 25 per cent by the end of the next fiscal year.

Driving force
Bank financing is a driving force behind housing and real estate transactions. In a country like Nepal where majority of the people are living a hardscrabble life, there are very few people who can afford a house. For such people, bank financing has become an easy means of scraping together funds required for building or purchasing a house. Real estate businessmen also rely on bank financing to carry on their business.
With the directives in force, banks are unable to make adequate investments in housing and realty sectors so much so that some banks are finding it arduous to bring their housing and real estate loans to the level as required by the directives. Furthermore, a hike in interest rates has made housing and real estate loans - and for that matter other loans as well - costly, making it difficult even for the existing loan clients to repay their loans.
What’s more, a housing or realty loan can be renewed for one year after 25 per cent of the loan - together with all the outstanding interest - has been repaid, creating an additional financial burden on the loan clients.
Besides, there are other bottlenecks that are acting as a stumbling block to the growth of housing and real-estate transactions. Income sources need to be declared for the purchase of land costing Rs. 2.5 million or above and for the purchase of a house costing Rs. 5 million or above. There is a compulsion for people to reveal sources as per the Anti-Money Laundering Act-2064, whenever an amount of Rs. 1 million or above is deposited with a bank.
The liquidity crisis is still persisting in the banking sector. Most of the banks have stopped disbursing new loans for lack of liquidity. There is no satisfactory deposit mobilisation. At present, the credit-deposit ratio stands at 89 per cent, which should not, as per the NRB directive, exceed 80 per cent.
One of the reasons for this sorry state of affairs is sluggish government spending due to a delay in the promulgation of the budget. There is a fund of Rs. 28 billion in the government account. With imports outstripping exports and due to other factors, the balance of payments (BOP) deficit now stands at Rs. 5.03 billion.
The other reason is the provision for seeking sources while making a deposit of Rs. one million or above with a bank, creating a kind of psychological fear among the people and resulting in the informal banking sector flourishing or diversion of money to India. This has resulted in deposit rates increasing and a corresponding hike in loan rates. In consequence, most people are not in a position to afford bank loans.
The government has also introduced a capital gains tax on housing transactions of Rs. five million or above. This provision may also be considered a hindrance to housing transactions. The main target of revenue mobilisation of the government seems to be through taxation. At present, every remuneration is taxable, at least at one per cent of the total remuneration. The government has also hiked property tax.
The government is fully aware of the fact that people resort to tax evasion by undervaluing their property. To discourage such undervaluation, the government has made provision for buying the property itself if it deems it highly undervalued. This measure is not, however, viable because people have rights to sell their property at whatever prices they like. Government interference in such cases is highly undesirable.
Government valuation of property is far from its actual, or market, value. If the government thinks that a property is undervalued and tax evasion is suspected, then it should value property realistically so that tax can be levied as per the government valuation rather than as per the selling price.
To encourage the growth of housing transactions, personal housing loans should be segregated from real estate and commercial housing loans because it is the common people, not businessmen, that take loans to build or purchase houses. Today, the prices of land and buildings are high. As such, the existing provision for seeking sources should be relaxed. Sources should not be sought for land transactions up to Rs. 10 million and for land and building transactions up to Rs. 20 million.
To stimulate deposit mobilisation, the provision for seeking sources for deposits of Rs. 3 million or above should be in place. The capital gains tax should be scrapped. Steps need to be taken to avert the current liquidity crunch. Bank rates need to be lowered to an affordable level (which is possible when the liquidity situation eases). The current provision for renewing housing and real estate loans after repayment of 25 per cent of the principal and all the outstanding interest should be annulled. Renewal of such loans should be allowed on a par with other loans.

Positive changes
Nepal Rastra Bank has, however, hinted that it is making some changes in the housing and real estate policy. Positive changes will definitely help revive the now stagnant housing and real-estate sector.
by:Uttam Maharjan

Announcement of Fourth Real Estate Marketing Agent Course

Brihat Investment announces open registration  for fourth Real Estate Marketing Agent Course affiliated with Thai Real Estate Business  School.
Commencing date:
23rd March to 28 March 2011 (9th to 14 th chaitra 2067)

Registration date:
25th January to 25th February 2011 (11th Magh to 13th Falgun 2067)

Course fee: NRs. 22,600.00 (inclusing VAT per person)

Key Speakers of Fourth REMA Course
D. Sopon Pornchockchai
Director
Thai Real Estate Business School
International Real Estate Expert
Mr. Om Rajbhandary
Chairman
The Comfort Housing and Brihat Investments
International Real Estate Expert
Some of the features of the course are:
> International standard course with well known Real Estate experts as key speakers
> BI comes up with a great corporate deal, if your corporation has five participants, BI will gladly let another participant to attend
the course on our expense.
> BI is creating a job opportunity for the 5 competent REMA participants.

For Further information, contact:
Ms. Sabita Joshi
REMA Co-ordinator
ph: 9802020056

Offer on Bhumi Pujan ceremony from The Residency Apartments Sanepa


Bajra Shangrila Residency has announced special discount offer on the occasion of bhumi pujan ceremony on feb 16, 2011 of its project, The Residency located at Sanepa, Lalitpur. All the interested individuals are invited for booking at Site Office, Thadodunga , Sanepa, Lalitpur.Also, all the exisiting customers are invited to the ceremony.
For more details:
Call: 9851050100, 9801050200,980105500

Makwanpur LRO approves sale of frozen land

Land Revenue Office (LRO), Makawanpur, has allowed selling land belonging to a blacklisted bank loan defaulter although the government has frozen the land.

The 20-kattha land at Basamadi, belonging blacklisted Bhismaman Shrestha, chief of Harati Wire Industries, was sold to Rabindra Shrestha Malla and Shyam Sunder Agrawal.

Bhismaman had put up the land as collateral at Nepal Bangladesh Bank (NBB). But the LRO released the land from NBB on Jan. 26 and transferred the ownership to Malla and Agrawal. On Feb. 12 2007, the government had decided to seize Bhismaman’s passport, and freeze his movable and immovable assets. It was also decided that his investment in government securities would be seized and used for loan repayment.

The Cabinet decision on Feb 18, 2007 had also decided to prevent banks from making payments to him; take control of his money put in bank lockers; seize and auction the shares of his family members; and stop debit/credit card facility.

The Ministry of Land Reform and Management has issued a circular to all the offices to comply with the government decision on Feb 25, 2007.

The Department of Land Reform and Management (DoLRM) has admitted that land ownership was transferred against the departmental and NRB circular. “The ministry has initiated action against those responsible,” said Jit Bahadur Thapa, director general of the department.

According to a ministry source, Chief Land Revenue Officer Krishna Prasad Adhikari, Land Revenue Officers Dambar Sunuwar and Ram Chandra Bhandari and Kharidar Chandra Prakash Shrestha are directly involved in this act.

Harati Wire has more than Rs 80 million to be paid to the Lumbini Bank. Although the land was put up as collateral at NBB, Lumbini approved loan to Bhismaman on condition that the collateral would be handed over to Lumbini after being released by NBB. However, on Jan 24, the LRO had faxed the bank saying that the land could not be put up as collateral at both banks. A day after receiving the fax from LRO, Lumbini’s Hetauda branch manager had told the LRO that it would not be illegal to transfer collateral from a bank to another after being released by the previous bank.

“The land’s ownership was transferred to another person although we informed LRO officials that the land was frozen by the government,” said a Lumbini official. Earlier, Debt Recovery Tribunal had issued an order that Lumbini could recover its loans from other assets of Bhismaman, as existing collateral is insufficient.

The department had sought clarification from LRO after the bank complained about the land transfer. Land Revenue Officer Sunuwar had replied that there was no record of the government’s circular with LRO, Makawanpur. But a probe committee assigned by the department found that all documents were there at LRO.
source:ekantipur

US unveils housing market overhaul

The Obama administration on Friday launched what could be the biggest shake-up of the US housing market in a generation, proposing that state-backed lenders are wound up and setting minimum downpayments for buyers."The plan is for fundamental reform," said Treasury Secretary Tim Geithner, announcing a bid to phase out Fannie Mae and Freddie Mac -- two state-backed firms that have underpinned the housing market for 40 years.

More than two years after a US housing bubble sparked a global market meltdown, the proposal signaled the government’s retreat from the $11 trillion market.Geithner said the plan would also "strengthen consumer protection and preserve access to affordable housing for the people who need it." The proposals include a mandatory 10 percent down payment for US home buyers.

The wide-ranging proposals effectively end the US government’s long-standing goal to help every American to own their own home."The administration believes that we must continue to help ensure that Americans have access to quality housing they can afford," the proposals said.

"This does not mean, however, that our goal is for all Americans to become homeowners."
While some proposals would have a direct and quick impact on home buyers, it is the reform of Fannie Mae and Freddie Mac that may have the broadest effect.The two firms, which before the crisis back-stopped around three-quarters of the housing market, have come under fire for their role in the fueling the housing bubble.

In the wake of a long and painful recession the government has been left to guarantee -- directly or via deals with bank lenders -- more than nine out of every 10 new mortgages, the government said.
Geithner admitted that mortgage costs may rise without the cheap lending supplied only by firms that have the backing of the US government.

"Over the long run, the cost of a mortgage will rise modestly for the average American homeowner," Geithner told financial news channel CNBC.Yet despite their roles in the financial meltdown, reforming Fannie and Freddie remains political charged.

Supporters argue the lenders have made housing affordable for millions of poorer Americans.
Critics say they represent unwarranted government to interference in the housing market.The Obama administration called on Congress and stakeholders to have an "honest discussion" about the way forward.
In an effort to strike a deal between the center-left and its Republican advisories, the administration offered three options for Fannie and Freddie to be wound down, but stopped short of outright privatization or closure.

"The central question going forward is how to protect taxpayers without unduly increasing the cost of mortgages to American families," said senior Democratic congressman Barney Frank.
But experts warned the road ahead would be a long one, with many predicting no deal would be reached before the presidential elections in late 2012.

"There are no specific timelines for action in the paper, and regardless of the Treasury’s recommendations, ultimately it will be up to Congress to enact fundamental housing finance reform," said Rajiv Setia and Nicholas Strand of Barclays Capital.

That may suit the administration, which has expressed concerns that the still-fragile housing market could buckle under the weight of sweeping reforms that are brought too quickly.

source:risingnepal

NIC Bank and Brihat Investment to promote home loan products


NIC Bank and Brihat Investment entered into and agreement today to promote home loan products.

“The trained agents from Real Estate Marketing Agents (REMA) from Brihat Investment will be working as direct selling agents for the NIC Bank to sell home loan products,” said Purnima Rajbhandari, CEO of Brihat Investment that has been advocating and lobbying with the banks, the government and Nepal Land and Housing Developers’ Association (NLHDA) to establish REMA profession.

Brihat Investment has trained the REMA professionals for ethical buying and selling of houses, she said, adding that they have the expertise to asses and the ascertain quality of an asset and help buyers find good value for their investments.

Under the agreement, REMA will facilitate the prospective buyers for acquiring home loan from NIC Bank for purchase of residential houses/apartments.

NIC Bank has demonstrated its leadership in the home loan league through its popular product NIC Ghar Subidha for its comprehensive product bundling. “The Bank believes that the arrangement with Brihat Investment-REMA, our customers will have better access to our services and quick turn around time in availing home loans,” said the bank.

The licensed agents for the real estate sector will help boost the sector as they can bring professionalism in the sector that has been facing slowdown recently, Rajbhandari said, adding that the NIC Bank and REMA both can work jointly to facilitate the home buyers.

Currently, the real estate and housing sector has around Rs 200 billion investment and the central bank has also been seriously working on to help the sector that creates employment.

Though, the land plotting and land transaction has been discouraged, the central bank has also accepted contribution of the real estate and housing sector to gross domestic product (GDP).

Meanwhile, the central bank governor has also urged the developers to build houses that are under common people’s purchasing capacity. “The housing products should be within the purchasing capacity of the people,” he said in an interaction recently.

source: The HImalayan Times

RMC Cement starts production

RMC Cement Pvt Ltd has started production at its Simara factory. The company is a sister concern of Rajesh Metal Crafts Ltd (RMC). The company has started commercial production of RMC Cement from its factory that has a capacity of 2.4 million bags a year.

The company has installed the latest PLC controlled closed circuit technology to ensure high quality and strength in the cement along with the installation of latest technology for the pollution control.

The company has also established fully-equipped modern quality testing laboratory to test the raw materials and finished goods at all stages.

RMC has been manufacturing and supplying MS Black Pipes, Galvanised Iron Pipes, Galvanised Plain and Corrugated Sheets, Tubular and Telescopic Steel Poles and Fabricated Steel Structural in the market.

RMC already has the ISO 9001: 2008 certificate and the company was recently conferred with ISO 14001: 2004 certificate for its environment management system.
source:THT

Commercial banks Q2 NPA almost doubles-slowdown in realty and housing sector can be accountable

The Non-Performing Assets (NPA) of commercial banks seem to have almost doubled in the second quarter of the current fiscal year.According to the unaudited financial figures of the second quarter of the current fiscal year, the average ratio of NPA to the performing loans in the second quarter of the current fiscal year is at 0.88 per cent which was 0.48 per cent in the corresponding quarter of the previous fiscal year.The slowdown in realty and housing sector can be accounted for the surge in NPA of the commercial banks this season.

The bankers have been suggesting the central bank Nepal Rastra Bank (NRB) to relax the ceiling on housing and real estate lending, citing the slowdown in realty to have affected the performance of banks as most of the commercial banks’ loan portfolio is dominated by these sectors.

Among the unaudited financial statements released by the twelve commercial banks Bank of Asia Nepal (BoAN), Kumari Bank Ltd (KBL), Kist Bank Ltd (KIST), Siddhartha Bank Ltd (SBL), Global Bank Ltd (GBL), Laxmi Bank Ltd (LBL), Citizens International Bank Ltd (CZBL) and Prime Bank Ltd (PBL) are the commercial banks expected to report an increased NPA for the second quarter in comparison to that of corresponding quarter in the previous fiscal year.

Standard Chartered Bank (SCBL), Nepal SBI Bank (SBI) and DCBL Bank Ltd (DCBL) are expected to report a drop in NPA in the review.

NPAs are one of the key indicators that gauge the financial strength of any bank or financial institution.
NPAs for banks are nothing but loans gone sour. It is a loan that can not be recovered from the customer within stipulated time, especially those exceeding 90 days of the predetermined period.
The NPA does not yield any income to the banks in the form of principal and interest payments. NPAs eat into the income of the financial institutions as the primary source of income of financial institutions are the interest payments by borrowers.

source: Himalayan News Service(2011),"Commercial banks' Q2 NPA almost doubles ", The Himalayan Times, 12 feb 2011

Govt mulls introducing property disclosure provision

With the government preparing a five-year national strategy on Anti-Money Laundering and Combating the Financing of Terrorism (AML-CFT), discussions are being held for introducing a provision that Nepali citizens should declare their property to check possible money laundering activities.

A core group formed by the government and led by joint secretary of finance ministry Mahendra Gurung is preparing a national strategy on AML-CFT which is expected to include the aforementioned provision. A source involved in the strategy drafting said the provision has not been included so far, but discussions are underway to include it in the strategy.

It was also a matter of discussion during the group’s meeting with the International Monetary Fund (IMF) delegation that visited Nepal recently. “The IMF is also positive in this regard,” said another source. The IMF is providing technical support to prepare the national strategy.
Given that the introduction of the provision is a sensitive issue, the core group is not in haste to give it a top priority. “Our priority is to prepare other infrastructure on AML-CFT,” said an official involved in the strategy drafting.
The core group is set to bring the draft of the strategy for discussion soon. “We plan to give the final touch to the strategy this year and implement it from the next fiscal year,” said a source.
According to officials, the initial draft has stressed on preparing legal, institutional and operational mechanisms to control money laundering and terrorism financing. The strategy has also proposed other strategies to strengthen the capacity of institutions looking after AML-CFT.
“There is a provision of managing special technology and human resources for the Department of Revenue Investigation (DRI) and Financial Information Unit (FIU) under the Nepal Rastra Bank,” said the source.
The NRB is in process of installing sophisticated information technology systems in FIU. Likewise, the proposed strategy has also emphasised on creating awareness on the matter among politicians and general public.
The strategy also seeks coordination among the bodies responsible for probing money laundering and terrorism financing cases, according to the source.
Nepal has been under international scrutiny for its ‘failure’ to live up to its commitments made to the Financial Action Task Force (FATF), an inter-governmental body on AML-CFT formed by the G-20.
As per the country’s commitment, the Nepali Parliament should have endorsed the Anti-Money Laundering Act-first amendment, UN Anti-Corruption Convention and Anti-Organised Crime Convention by the end of 2010. Likewise, Mutual Legal Assistance Act, Extradition Act and Anti-Organised Crime Act were also required to be passed by the Parliament.

 Recently, International Cooperation Review Group, a sub-committee under the FATF called Nepali officials in Australia to inquire about the progress made in this regard.

The FATF is holding its plenary and working group meetings from Feb. 21-25 in Paris and it is expected to warn Nepal about non-compliance with its commitments, according to officials. However, it will decide on whether to blacklist Nepal in July after its regional partner—Asia Pacific Group on Money laundering (APG)—of which Nepal is also a member, submits Nepal’s progress report to FATF.
The APG is  currently preparing a mutual evaluation report of Nepal. It is expected to make public Nepal’s initial mutual evaluation report in March. This will be a basis for FATF to decide on Nepal in July.
source: Shrestha, Prithvi, Man (2011),"Govt mulls introducing property disclosure provision", The Kathmandu Post, feb 12 2011

Revise credit policy

If credit is the driving force of a modern economy, the latest banking data released by Nepal Rastra Bank marks the point when this engine spluttered, and the economy is now about to slide downhill. Data shows that total domestic credit increased by 2.2 percent during the first five months of the current fiscal year -- the slowest in recent years -- whereas it was 8.6 percent during the same period last year.

Only a few individuals seem to have noticed that the net domestic credit available to the economy has in fact been squeezed by over seven percent when the close to 10 percent inflation is taken into consideration. This is alarming for an economy that is struggling hard to recuperate from long-running sluggishness. The slowing rate of money supply growth that has declined close to zero has also defied the well-accepted theory of negative correlation between money supply and inflation, indicating that the effect of monetary policy on domestic prices in Nepal is far weaker than what classroom theories would suggest.

Undoubtedly, slow credit growth helped save the economy from a possible burst of the realty bubble last year. And Nepal Rastra Bank must be praised for the tactfulness it displayed in averting that impending crisis. But since then, a lot has changed and the possible threat of crisis has subsided. We believe it is high time the Ministry of Finance and the central bank paid attention to the pleas of the private sector to relax some of the tough policies that have now started to impact negatively on economic growth. We believe the private sector’s argument is valid and there is an urgent need to review some of the policies in order to spur those sectors that are least affected by the worsening electricity shortage. There is no need to explain here that power shortage along with insecurity have stymied the development of sectors such as industry that can generate mass employment.

In this regard, there is room for relaxing some of the credit polices imposed previously on promising sectors like housing and infrastructure construction, which have strong multiplier effects in creating jobs in many sub-sectors, ranging from cement and brick manufacturing to carpentry. Agriculture is also another sector that can thrive even at a time of acute power crisis. Though the government, in its fiscal policy, announced many policies to promote this sector, the outcome so far has been pessimistic. We believe that the above-mentioned are some of the sectors that can at least anchor Nepal’s economic growth prospects against going flat.

And, we are optimistic that the new prime minister, who has listed economic development as one of his four priorities, will pay due attention to this matter.

source:republica

Call to relax realty lending provison

With the banking sector affected due to slowdown in realty, stakeholders are pressuring the government. Housing developers and bankers, at odds with each other a few months ago, now share the same opinion on how to ensure smooth recovery of realty lending.

Bankers have suggested that Nepal Rastra Bank (NRB) relax the ceiling on real estate lending as slowdown in real estate has affected them. They have also asked for reduction in capital gain tax.
 Last year, the central bank had directed banks and financial institutions (BFIs) to reduce lending exposure to real estate to 25 percent within two years. The new monetary policy told the banks to reduce the housing sector lending to 25 percent and lending on lands to just 10 percent of total loans.

“After the central bank directive, banks are not in a position to provide home loan,” said Parshuram Chettri, chief executive officer of Bank of Asia Limited on Wednesday at an interaction programme of the Nepal Land and Housing Dealers’ Association (NLHDA). According to bankers, the central bank policy of keeping both home and housing loans under the same head has created problems. “Home loan is good and secure,” said Ashoke Rana, president of Nepal Bankers’ Association (NBA).

In order to deal with the fast inflating realty bubble, the central bank introduced tough directives to control excessive lending. “Everyone knows huge investment has been made in this sector,” said Rajan Singh Bhandari, vice-president of NBA. “Now, all should think about the problems if this loan turns into bad debt.”
According to the central bank’s first quarter statistics, commercial banks’ exposure to real estate and housing sector stood at around Rs 100 billion. And, a large chunk of this is in the real estate sector. Bankers say the default on real estate loan is gradually increasing.

They have also demanded that they be allowed to restructure the real estate loan. “The loan can be restructured at least once without imposing any provision,” said Chettri. “This would solve the present problem to some extent.” According to him, India’s central bank—Reserve Bank Of India—allowed such restructuring when the Indian real estate witnessed a slowdown following recent global economic recession.
The current slowdown in realty sector, according to bankers, is due to mismatch in demand and supply. Bankers say that there has been construction of more apartments but their sales have been dismal. “Housing business has turned into an industry but its sales have taken a hit,” said Bhandari. “How long can it survive if the industry continues to produce but can’t sell?” He added that the decline in sales was due to NRB’s directive.

Bankers claimed that the government could introduce an alternative arrangement to curb unnatural price rise in the realty sector. Stating that unnatural rise in realty prices can be controlled, real estate developers asked the government’s assistance in this regard.

“If the timeline of land registration is followed as mentioned in law, abnormal price rise can be discouraged,” said Min Man Shrestha, NLHDA general secretary. NLHDA Secretary Bhesh Raj Lohani
said that the provision of providing license to land brokers could also address the problem.
The slowdown in realty has also affected revenue that the government used to get from this sector. According to realty businessmen, the imposition of capital gain tax by the government has affected revenue collection.

Keshav Acharya, chief economic advisor at the Finance Ministry during the Madhav Kumar Nepal led government, said that the then government had mulled bringing a policy to allow developers to sell apartments to foreigners also.  “I hope the current government completes the process,” he said.
source:ekantipur

NRB guv says strictness must be on Real Estate

Central bank might separate home loan from the limit fixed on the loan to real estate sector by the central bank, giving a breathing space to the cash-strapped banks and real-estate sector.Nepal Rastra Bank Governor Dr Yubaraj Khatiwada indicated that the central bank does not want any sector to be hurt due to its directives and intends to continue to bring changes for a healthy financial sector.

“Adding the investment from finance companies and credit cooperatives, the investment in the real estate sector could come roughly to around Rs 200 billion,” he said, addressing an interaction on Real Estate Sector and Its Contribution on Economy, organised by Nepal Land and Housing Developers’ Association (NLHDA) in the Valley today.

He also advised the bankers to asses risks before lending in a single sector.Only profit bench-marking should not be the criteria,” he said, indicating that the mid-term review of the Monetary Policy might separate the home and real estate loans.

The bankers and real estate entrepreneurs have asked the central bank to separate home loan and real estate loan. “The ceiling on real estate investment of 40 per cent has to be separated from housing loan for developers and home loan users,” said Om Rajbhandari, vicepresident of the NLHDA.
Supporting the real estate entrepreneurs, Rajan Singh Bhandari, vice-president of Nepal Bankers’ Association (NBA) said that the developers are not getting the buyers for their housing units due to ‘no access’ to credit. “The developers, who have borrowed from the banks, could not sell their housing units and apartments that has put a pressure on the lending bank,” he said, adding that the banks’ non-performing assets (NPA) would shoot up in case of the borrower developers’ inability to pay
back the loans.

Commercial banks have roughly lent Rs 50 billion in the sector. “In case of inability of payment for six months, the banks have to provision 50 per cent of the loan,” he said, adding that the situation will hit the already cashcrunch commercial banks are facing.

Real Estate  be it in Nepal or the most developed countries as USA tends to follow a definite cycle.Analysing the real estate development cycle post-1990, it faced a favourable climate fuelling the land transactions high up. “It was the recovery phase of real estate,” Rajbhandari said.“Till 2007, the sector reached its peak phase with many new housing and apartment projects being launched every other day.

However, in 2009, there were amendments in the Financial Policy like income source to show in case of ownership of land worth Rs 2.5 million and above and land plus house worth more than Rs 5 million, new Capital Gain Tax, Voluntary Declaration of Income Source (VDIS) and VAT.

Because of these policies, from 2007 till 2009, the Real Estate reached the stage of Recession. Banks also faced difficulties, as the surplus money made in transactions did not go to banks, and this was, in fact a major catalyst for the liquidity crunch.

“With the introduction of NRB directives one year ago, the environment for the housing sector was not favourable and it faced controlled mechanism,” her said, adding that currently the Real Estate has reached the phase of Depression and moving further towards the Bottom, with no Real Estate transactions taking place.
In the year 2000, the sector touched the prosperous phase because land transactions increased and housings in well developed lands were also in demand.

source: The Himalayan Times(2011),"Housing may get breather from loan-cap ", The Himalayan Times,10 feb 2011

NRB guv says strictness must be on Real Estate

While bankers are asking the government to relax provisions on realty sector lending, Nepal Rastra Bank Governor Yubraj Khatiwada is asking stakeholders to ponder why the central bank was forced to intervene in realty sector lending. “I feel they are still not introspecting,” said Khatiwada.  He was of the view that central bank took the right decision at the right time.

The governor said that developers have been constructing houses and apartments that are beyond the reach of common people. “The per capita income of Nepalis is not even $ 500,” he said. “How can houses or apartments worth millions be sold in this situation?” According to Khatiwada, if developers start constructing houses or apartments that the common people can afford, the government would also think of providing incentives. he said that the central bank could then rethink think the issue of loan restructuring while reviewing the monetary policy.

source:ekantipur

Housing may get breather from loan-cap

Central bank might separate home loan from the limit fixed on the loan to real estate sector by the central bank, giving a breathing space to the cash-strapped banks and real-estate sector.Nepal Rastra Bank Governor Dr Yubaraj Khatiwada indicated that the central bank does not want any sector to be hurt due to its directives and intends to continue to bring changes for a healthy financial sector.

“Adding the investment from finance companies and credit cooperatives, the investment in the real estate sector could come roughly to around Rs 200 billion,” he said, addressing an interaction on Real Estate Sector and Its Contribution on Economy, organised by Nepal Land and Housing Developers’ Association (NLHDA) in the Valley today.

He also advised the bankers to asses risks before lending in a single sector.Only profit bench-marking should not be the criteria,” he said, indicating that the mid-term review of the Monetary Policy might separate the home and real estate loans.

The bankers and real estate entrepreneurs have asked the central bank to separate home loan and real estate loan. “The ceiling on real estate investment of 40 per cent has to be separated from housing loan for developers and home loan users,” said Om Rajbhandari, vicepresident of the NLHDA.
Supporting the real estate entrepreneurs, Rajan Singh Bhandari, vice-president of Nepal Bankers’ Association (NBA) said that the developers are not getting the buyers for their housing units due to ‘no access’ to credit. “The developers, who have borrowed from the banks, could not sell their housing units and apartments that has put a pressure on the lending bank,” he said, adding that the banks’ non-performing assets (NPA) would shoot up in case of the borrower developers’ inability to pay
back the loans.

Commercial banks have roughly lent Rs 50 billion in the sector. “In case of inability of payment for six months, the banks have to provision 50 per cent of the loan,” he said, adding that the situation will hit the already cashcrunch commercial banks are facing.Real Estate  be it in Nepal or the most developed countries as USA tends to follow a definite cycle.Analysing the real estate development cycle post-1990, it faced a favourable climate fuelling the land transactions high up. “It was the recovery phase of real estate,” Rajbhandari said.

“Till 2007, the sector reached its peak phase with many new housing and apartment projects being launched every other day.However, in 2009, there were amendments in the Financial Policy like income source to show in case of ownership of land worth Rs 2.5 million and above and land plus house worth more than Rs 5 million, new Capital Gain Tax, Voluntary Declaration of Income Source (VDIS) and VAT.

Because of these policies, from 2007 till 2009, the Real Estate reached the stage of Recession. Banks also faced difficulties, as the surplus money made in transactions did not go to banks, and this was, in fact a major catalyst for the liquidity crunch.

“With the introduction of NRB directives one year ago, the environment for the housing sector was not favourable and it faced controlled mechanism,” her said, adding that currently the Real Estate has reached the phase of Depression and moving further towards the Bottom, with no Real Estate transactions taking place.
In the year 2000, the sector touched the prosperous phase because land transactions increased and housings in well developed lands were also in demand.

source: The Himalayan Times(2011),"Housing may get breather from loan-cap ", The Himalayan Times,10 feb 2011

CHANDELIERS -EXQUISITE, ELEGANT AND AFFORDABLE

A Kathmandu comfortable home cannot only be ac quired through archi tectural design, furni ture selection and accessories that fill up the space.Artistic lighting with a professional touch does wonders for any room.
The primary function of light is to enlighten the space. However, according to interior designers, lighting adds beauty to the space enhances existing interior elements and changes the atmosphere of the surroundings. Among the many artistic designs, chandeliers are considered one of the most glamorous centerpieces of a room.

"Having chandeliers reflects a sense of wealth and brings grandeur to the room. Previously, they were popular in hotels and in the homes of affluent people. Today, people from different strata are also opting for these spectacular chandeliers," says Binay Shah, managing director of Electric Light System Pvt Ltd at Putalisadak. According to Shah, the proper choice of chandelier can make a big difference in an inexpensively decorated room. It adds class and gives a sense of luxury.

There are different types of chandeliers available in the market crystal, metal and steel. They come with large sizes having many bulbs and tubes lighting up the room with stylish colours, elegant style and heart stealing beauty.

"Capable of impressing absolutely anybody, chandeliers have been winning the hearts of people by creating the perfect light setting and ambience throughout," says Suman Shrestha, proprietor of Light House at Sundhara. According to Shrestha, be fore hanging chandeliers, some factors should be considered like height of the ceiling and size and colour of a room. Taller ceilings demand larger chandeliers and so vice versa for lower ceilings. For a 10X12 sq ft room, a 12 inch chandelier is appropri ate. People are opting for chan deliers that contrast to the colour of the room. For example, in par quet room, antique chandelier compliments other interior décor.

Similarly, all types of chandeliers suit white walls."People are opting for crystal chandeliers as they are best for aesthetics and establish a conver gence point inside a room that visitors cannot overlook. Moreover they reflect the personal style of the homeowner since they come in a whole range of designs. Likewise, they are truly flexible furnishings that could adapt well to any room," says Basanta Poudel, owner of Exclusive Light Show Room at Sundhara. Crystal chandeliers are also most preferred by hotels and gumbas. Residences are now also opting for the crystal chandeliers.

Australian and Egyptian crystal chandeliers are the most stylish and alluring as compared to products from Belgium, China and India. Crystals come in different colours like yellow, blue, red, purple and pink and it is believed that they provide different benefits in many aspects including health.

For instance, white crystal stones promote cleansing and purification, yellow crystal stones are said to better regulate the functions of the nervous, digestive and immune systems, while light blue crystal stones could strengthen communication.

Talking about the disadvantages, Poudel says, it is quite difficult to clean the crystals and it is not electricity efficient, as it does not take CFL bulbs, but holds normal bulbs.

The price of these chandeliers depends on the size, and manufacturing company. They range from Rs 25,000 to Rs 1,250,000.
Beside crystal chandelier, steel chandeliers coated with gold and silver are gaining popularity among Nepalis, as they are less expensive when compared to crystal chandeliers.
The main advantage of the latter over the former is the use of CFL bulbs that are regarded as the best option in Nepal which faces prolonged hours of power cuts.

The price of steel and metal chandelier range from Rs 15,000 to Rs 50, 000. Cleaning tips eglecting the crystals can make N your expensive chandelier look cheap, and improper cleaning can actually ruin the crystals and the frame.

Here are the basic guidelines to follow when cleaning chandeliers: 1. The most important thing to re member when you are cleaning your chandelier is to be careful.The crys tals can easily be scratched or other wise damaged.
2. Always use a soft cotton cloth. Paper towels and disposable dusting cloths can scratch the crystals.
3. Never spray cleaner directly on the chandelier ­ you can damage the fin ish of the frame and leave marks on the crystal.
4. There are rumours that it's safe to put chandelier crystals in the dish washer on the top shelf.This is not safe, and you should never try it! 5. If you are clumsy or easily get dizzy, invest in inexpensive, collapsible scaf folding. It is safer than a ladder and does not take up much storage space in your garage or shed.
6. Before you start taking apart an in tricate chandelier, take several pic tures with a digital camera from dif ferent angles if you do not have the original diagram. Never use stickers or markers to mark pieces.
source:THT, feb 5, 2011

Land certificate distribution speeds up

Chitwan, Feb. 2: Landless Problem Resolution Commission, Chitwan, has speed up land ownership certificate distribution to landless people.
Organizing a press conference, Commission´s chairman Bhagabati Ghimire said that the commission has already distributed land to 226 landless families this year and going to distribute land to 170 more families soon.

"A total of 3,377 applications have been submitted as of now demanded land and we will distribute land ownership certificates to those landless families after carrying out an investigation into the applications," he said.
At the conference it was informed that Rs. 2,486,414 revenue has been collected from land owner certificate distribution. Around Rs. 7,823,769 revenue is yet to be collected, said Ghimire.
source:republica(2011),"Land certificate distribution speeds up",republica, 2 feb 2011

Space in the city

A cousin of mine is a heart patient. During his regular health check-ups, doctors have recommended that he go for regular morning walks in parks where one can find clean, fresh air and plenty of greenery. But in Kathmandu, we couldn’t find any suitable park. Without any alternative, my cousin walks on the dusty footpath every day early in the morning.


Increasing population, unmanaged urbanisation, an undisciplined waste management system, rapid environmental degradation and irresponsible citizens and authorities have turned Kathmandu into one of the most unattractive capital cities in the world. Every corner of Kathmandu has dust hovering in the air. And every empty space is either filled with street vendors or with piles of garbage. The adverse effects of rapid, unmanaged urbanisation have destroyed the natural beauty and the greenery of our Capital. Although there are a few public parks in the Valley, these are more like open fields rather than parks due to a lack of proper management and design, and a majority lie on the outskirts of the city—out of easy reach of a majority of the population.

Open spaces and public parks are integral parts of the layout of a city. These are not only important from an environmental aspect but they also play a vital role in human life. Public parks help maintain an individual’s physical as well as mental health. Public parks encourage people to regularly exercise, socialise as well as relax and enjoy a little piece of nature to find relief from various stresses and strains. Making these regular habits is a good way to prevent heart disease, high blood pressure, depression, diabetes, asthma and various other diseases. It could even be helpful for those living with respiratory diseases and the peace of mind that can be found in a well-designed park could even help reduce the astonishing number of suicide cases in Kathmandu. Realising the importance of open places and public parks, the World Health Organization (WHO) has established a minimum criteria of 11 square metres of open green space for an individual in a city area. This signifies that, for the estimated population of Kathmandu, around 44 square kilometres of area should be allocated for parks—seven percent of the total land of the Valley. Washington DC, another highly populated capital city, has dedicated 35 percent of its total land area to public parks. Many other developed cities in the world leave about 11-15 percent of their total land area for public parks.   

Looking at this data, it is clear that Kathmandu is far behind fulfilling the criteria of becoming a developed city. Hence, the development and management of open areas and public parks in Kathmandu should be kept a high priority. Moreover, in places going through rapid urbanisation, there should be land set aside for parks before the quickly developing city takes over all the available space. Despite being a poor nation, this effort could be a significant step towards conserving and promoting a clean environment as well as a clearer mind for everyone in the city.

by:Prayash Raj Koirala, The Kathmandu Post

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