Real estate entrepreneurs have prepared to establish a company worth 50 billion rupees to carry out a large project that involves land and house pooling.
Currently, the government does not have a clear legal framework to regulate the real estate sector. Businessmen, limited to buying and selling land and some housing projects, have been saying that a big company is needed to build a new city.
"Currently, the law prevents the private sector from carrying out large projects," said Bhesh Raj Lohani, president at the Nepal Land and Housing Developer’s Federation, “The law should be formulated allowing the private sector to develop cities and the land use limitation be removed.”
The government has already announced the creation of more than 50 new cities. So far no visible city has been built. The land has been frozen after announcing the creation of four cities in the Kathmandu Valley. Even though the DPR has been prepared, the Ministry of Urban Development has not made a decision.
The Kathmandu Valley Development Authority conducted 22 land and house pooling projects in 40 years. A dozen of them have been completed. In the last 11 years, the authority has not been able to bring any new projects. The private sector has carried out 300 projects in the Kathmandu Valley. But those projects are small, big projects have not been implemented.
Lohani says, "Land pooling is not done only by the government. The law has created obstacles for the management of large projects.
Businessmen have said that it is difficult to carry out the projects due to the limitation of 30 ropanis of land in the Kathmandu Valley and 11 bighas in Terai.
"The government should regulate, the jobs of construction should be given to the private sector. The private sector has been able to carry out big projects,'' he says.
The government has not defined the real estate business as an industry. The Council of Ministers has been gradually relaxing restrictions on certain industries including agriculture. Due to the current land use limitation, large projects cannot be carried out.
Businessmen have said that the plans of land pooling should be given to the private sector and the projects initiated by the government should be completed. Out of the four projects in the Kathmandu Valley, there is a plan to build Ishan East in 100,000 ropanis of land and the rest in 10,000 ropanis of land. He suggested the private sector should be allowed to build four new cities.
General public can invest in 50 billion company
Of the 200,000 companies registered in the company registrar's office, 18,000 are related to real estate.
The paid-up capital of 18,000 real estate companies is only 278 billion rupees. This means that real estate professionals have a large amount of capital. Capital should be not be dispersed in small projects, but invested in large areas.
Nepali businessmen, along with the general public, have planned to establish a company worth 50 billion to bring in foreign investment. President Lohoni has said that he is going to establish a public limited company worth 50 billion under the leadership of the federation.
"We can make big investments by collecting investments from private sector businessmen and ordinary people," says Lohoni, "We can bring in loans of up to 200 billion from abroad for companies worth 50 billion. We can invite big foreign companies into Nepal through joint ventures.
Businessmen have said that the Urban Development Ministry has delayed bringing the Urban Development Act, which will pave the way for businessmen to build a city, not a small project.
“Making an organized city requires huge capital. Nepali private companies do not have large capital. The big companies are only one or two billion. "We cannot build a big city with that amount," he says, "Now we can only build housing and apartments." We can do small land pooling. Building big cities requires huge capital. There was no place for foreigners to come and invest. We have tried to establish a company by realizing that the city should be built with Nepali investment.'
