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Nepal to operate first SEZ by February

The government of Nepal is all set to start operating its first special economic zone (SEZ) at Bhairahawa by February, 2014, officials said on Monday.

The construction of this much talked about SEZ had begun 12 years ago.

The ministry of industry, which had previously planned to operate the SEZ at Bhairawaha by mid-April this year, could not meet its target after the contractor chosen for the construction failed to complete the task within the agreed time.

"The construction of necessary buildings, infrastructure and setting up of other facilities including water treatment plant in the SEZ has been completed," Industry Secretary Krishna Gyanwali told Xinhua Monday by phone.

"If nothing irreversible falls on the way, the first SEZ will come to operation by February next year."

He also said the ministry was now busy preparing norms for setting up factories in the SEZ or providing land for interested manufacturing units on lease.

"We are developing a standard in regards to which sort of factories be allowed to operate within the SEZ for how long period and on what basis, including others," Gyanwali said, adding that the task would be completed within two weeks.

The ministry has also been preparing an Expression of Interest (EoI) to be floated as a formal proposal to ask interested industries to come within the SEZ boundary.

"Once we inaugurate the SEZ, we will promptly float the EoI asking the private sector to come in the SEZ for industrial operation," Yam Kumari Khatiwada, joint secretary at the ministry, told Xinhua.

A total of 52 plots have been developed for 200 factories in the Bhairahawa SEZ which is located some 250 km west of Nepal's capital Kathmandu.

The government had first conducted a study to set up an SEZ in 1983. The project was first announced 17 years ago based on China's models.

The industry ministry also said that after looking at the response to the first SEZ it would set up three SEZs in Biratnagar, Panchkhal and Bara by the end of 2014.

The ministry is currently holding feasibility studies to establish SEZs in other places, including Jumla, Kapilvastu, Dhanusha, Siraha, Jhapa, Gorkha and Rautahat. It has already completed a feasibility study in Ratomata and Dhangadhi.

Earlier, in the first week of February this year, the government decided to run the SEZ through a SEZ Development Committee after its attempt to introduce an SEZ Act failed due to the absence of a parliament in the country.