Butwal:Lack of appropriate land to set up factories in Butwal has discouraged potential investors. Space is scarce inside the industrial estate, and land prices elsewhere in the city are prohibitively high. As a result, youths, in particular, are finding it very difficult to establish new businesses.

“Young people are leaving the country for foreign employment as they are not finding proper space to set up their factories,” said Surendra Prasad Shrestha, president of the Butwal Chamber of Commerce and Industry. “The industrial enterprises in operation too are not able to expand for lack of land.”

According to entrepreneurs, real estate in downtown Butwal costs Rs 500,000 per cubit compared to Rs 400,000 in Bhairahawa. Prices in the suburbs of Butwal start at Rs 100,000 per cubit.

The number of people wanting to operate businesses in Butwal has gone up due to several factors like increasing popularity of Lumbini as a Buddhist pilgrimage, proximity to the bordering Indian market, and emergence of the region as a business hub for the Western and Far Western development regions.

Potential investors from outside Butwal too are keen to sink money in business ventures here mainly because it tops the list of probable sites for the future capital of Nepal. The increasing global promotion of the Buddha's birthplace Lumbini, which lies 44 km to the southwest of Butwal , has also attracted entrepreneurs.

Swelling interest in Butwal as a place to do business has sent land prices skyward, which has put a dampener on things. Vice-President of the Butwal Chamber of Commerce and Industry Shanker Shrestha said that potential entrepreneurs were looking elsewhere to invest their money due to the high land prices. “It costs more to buy land than operate a factory here,” said Shrestha. “This has acted as a setback for those wishing to make an investment.”

According to him, the main problem is that the industrial estate has not been expanded since the Panchayat system was abolished almost two and a half decades ago. A poor industrial environment and lack of electricity, security and access roads, among other factors, have also hindered business expansion here.

Entrepreneurs here have been making efforts to establish an industrial estate from the private sector as the government has not been doing anything to expand the existing zone.

A study is being conducted in Motipur, Rupandehi to open a new industrial estate. A long-term plan is being prepared to set up the industrial estate to be named Motipur Industrial Estate on around 1,000 bighas of land which has been destroyed by floods.? “But it is not clear when the construction will begin,” said Navraj Shrestha, former president of the Butwal Chamber of Commerce and Industry.

Operating manufacturing plants inside an industrial estate is advantageous as rents are lower, backup electricity is available during power outages, security is provided and export processes are easier.

Butwal Industrial Estate which was established in 1975 on 434 ropanis of land is already full. There are 63 factories related to grill, cable, shoes, sleeper, cooler, soap and dairy products, among others, in operation here. Butwal Spinning Mill, which occupies 143 ropanis of land, is now closed.

Ganesh Kumar Adhikari, president of the Industrial Estate Industries Association, said that it is uncertain whether the factory will reopen or not, and its land remains out of bounds to entrepreneurs.

source: the kathmandu post,6 jan 2014