Kathmandu, Oct. 27
The Federation of Nepalese Chambers
of Commerce and Industries (FNCCI) is not happy with the increase in the
minimum premium rate for Non-Tariff Insurance Business.
In a statement published on
Wednesday, it said that its attention has been drawn to the Insurance Board of
Nepal's decision to hike the minimum premium rates.
The insurance sector regulator had
issued a directive on September 22 for the non-life insurance companies asking
them to raise the minimum premium rates for non-tariff insurance business.
According to the directives, the
hydroelectricity developers should pay 1.5 per cent of the total cost as the
minimum premium of the project insurance for a four year period. Earlier, it
was just 0.25 per cent of the total budget.
On an average, it costs Rs. 200 million
to generate 1 megawatt hydroelectricity in Nepal and according to new rates the
developers should pay Rs. 3 million in four years against Rs. 500,000 as per
the earlier rates.
Power producers have been saying
that it would increase the cost of the project and create pressure on the
investors. They said that 0.25 per cent premium is the international standards
in hydropower sector.
Saying that the step would increase
the cost of the project it criticised the board's step was against the liberal
market economy.
Stakeholders including Independent
Power Producers' Association (IPPAN), Federation of Contractor Associations of
Nepal (FCAN) and other businesses concerned with the construction and
development have said that the directives of the Insurance Board have
conditions that might bar entrepreneurs to get the claim paid even though they
paid the premium.
"The directives will
discourage the competition in the market so the Insurance Board should review
it," read the statement.
Published in The Rising Nepal daily on 28 October 2021.
No comments:
Post a Comment