February 3: The Special Economic Zone (SEZ) established five years ago in Bhairahawa of Rupandehi district has not been able to achieve the expected result.

The government's objective has not been achieved as the SEZ located in Rohini Municipality-1 Bagaha of the district has not been able to achieve the target of reducing the trade deficit by increasing exports.

Special Economic Zone (SEZ) Bhairahawa informed that among the six industries situated at the SEZ, some have been exporting for four years. However, there are only two industries that export 60 percent of the production.

Brilliant LED, Shakti Mineral, Vistar Company, Panchakanya Udyog, Jaya Buddha, and S Polymer are operating on the SEZ premises with Tirupati Metal all set to come into operation. Of the three industries that have been exporting since 2076 BS, Brilliant LED exported 58 percent of its products, Shakti Mineral 24 percent, and Vistar 100 percent in the fiscal year 2076/77.

Similarly, in the fiscal year 277/78, Brilliant LED exported 24 percent, Shakti 2.5 percent, Vistar 99 percent of their production, while Panchakanya’s exports were limited to just 2 percent, according to the Special Economic Zone (SEZ).

Chandika Bhatta, the executive director of the SEZ, said the state should cut production costs from SEZ industries. Bhatta further said that adding the “threshold” for exports was not effective.

“We have not been able to achieve the expected results due to weak policy of the state,” said Bhatta while requesting the government to make the production sector of Nepal industry-friendly and enabling the industries to compete in the internal market by amending the laws.

As of December of the current fiscal year, Brilliant LED has exported 48 percent of its production, Shakti 12 percent, Vistar 87 percent, and Panchakanya wrapped up at just 1 percent of the production. Currently, Jaya Buddha and S Polymer are also producing.

The Special Economic Zone was set up to encourage industries to produce goods that are in high demand in foreign countries.

Initially, the provision was to export 75 percent of the production, but now, it has been reduced to 60 percent.

There is a provision for the operation of 17 types of industries in the SEZ including the food industry and agro-industry, herbal products, leather goods, readymade garments, carpets and woolen goods, pashmina and silk, handicraft products.

Nira Bhattarai of Bhairahawa Special Economic Zone informed that work is underway to expedite the exports of SEZ from Belahiya, located near the customs office without any delay.

The government had started the process of land acquisition in Bhairahawa in 2001 to set up an export promotion center. Construction of SEZ started in Bhairahawa in 2008 with the introduction of SEZ Ordinance in 2005.

Although the SEZ Bill was introduced in Parliament in 2008, the Act authenticated only in 2016. Despite the government's announcement in 2010 to provide income tax, VAT, customs, and other exemptions and facilities to the industries in the SEZ through industrial policy, the industrialists are reluctant to set up industries in the SEZ.