Russsia speaks of outstanding loan, Nepal in denial

KATHMANDU, April 25: Following repeated formal and informal requests from the Russian government to settle a 32-year old soft loan that Nepal believes it has already paid back, Nepal has asked Russia to furnish documents, if any, for the Soviet-era loan, expressing willingnessto take necessary steps.
According to government sources familiar with the issue, Russia has claimed that Nepal is yet to settle a soft loan amounting around 1.5 million US dollars taken in 1980 to establish Nepal Rosin and Turpentine Company and has been making formal and informal requests since 2004 for the settlement of the loan. Russia has also expressed its readiness towrite-off the the loan but has sought a formal request from the government.
"Since we have no record of any outstanding loan with Russia, we have neither been able to send such a write-off request nor pay the loan," said a high-ranking government official. He added that such a situation has led the issue to remain unresolved for years.
Nepal came to know about the "outstanding" soft loan only after the Russian government formally brought the issue to the notice of the government on July 20, 2004. Russia again raised the issue in October, 2005.
Officials at the Ministry of Foreign Affairs and Ministry of Finance said that Russia has been raising this issue even during meetings between officials from both the countries. Even Nepali ambassador to Russia Surya Kiran Gurung had raised this issue with officials at the Ministry of Finance time and again during his tenure, according to sources. Gurung´s tenure ended a few months ago.
"We are ready to either pay the loan or to request the Russian government to write it off. But we cannot do both until we get the official record on the soft loan," said a senior government official, adding, "Russia might have lost its record of payment when the former Soviet Union disintegrated."
Finance Secretary Krishna Hari Baskota recently asked the newly-appointed Nepali ambassador to Russia Rabi Mohan Sapkota to take up the issue with priority and resolve it diplomatically, according to sources.