Wednesday, February 17, 2010

Cost of Doing Business in Nepal

When I came back to Nepal to launch our solar venture Gham Power, I had no illusions in my mind that the process was going to be smooth. After all, I was born and raised here, finished high school from here, and have been visiting frequently enough to know that the way business is done in Nepal is very different from what one would expect say in the US.

However, it’s the little things that surprise you, and also drive this point home.

Last week, our staff found out that there was no straightforward way to connect the solar panels to the rest of the wiring. This, of course, was very concerning, since the solar panels *are* the source of electricity, and if you can’t connect them to the rest of the system, there is no power whatsoever.

This problem was because the cables coming out of the panels needed a special type of connector, which is commonly available probably everywhere else in the world, but alas, not in Nepal. We talked to several other solar installer in Kathmandu, and everyone complained about the same thing – “yeah, those *&#%ing cables, can’t find them here, so we just cut them to bare wire and connect it from there”

Little did they know (or maybe pretended not to) that if you cut the cables on the panel, the solar panel warranty becomes void.

So, I did some research, and found a company in China who sells this type of cable. After a couple of emails back and forth, their rep says - “our entire staff is on leave for 8 days for Chinese New Year’s, so order by Thursday, or else you will have to wait for 8 days.” The total order came to be about $170, so instead of doing something elaborate like a TT (Tele Transfer, or “wire”), LC (Letter of Credit), or Bank Draft, I asked the rep if they took a credit card. Answer came back saying – “we don’t have a POS machine, so can’t do credit card, you must send a TT.”

This is Wednesday afternoon. These guys go on leave on Friday.

So, to prepare the TT, I had the rep email me an invoice with all the details spelled out. Our bank only accepts printed invoice, and their office is all the way across the town (30-minute drive) so we had to print the invoice and get to them. That was the end of Wednesday. Our bank says this will get done in the “first hour” Thursday.

Thursday we go to bank. We need someone with signing authority as well as the company seal that needs to be stamped on several papers that get signed to prepare the TT. By the time everything is said and done, it is only late Thursday when I can send a scanned copy of the TT document to the rep in China. Fortunately he hasn’t left for vacation, so he ends up sending the shipment first thing Friday morning.

I thought that was the happy ending, but we had one more crazy act remaining.

Normally when something gets sent via UPS, Fedex, or DHL, I’m used to expecting a package shipped to my door. I expected the same in this case as well – but express shipping in Nepal means the carrier brings your shipment to the airport and then calls you to clear customs.

Now, in midst of running a business, I really don’t have the time to go to the airport to custom clear a $170 shipment of $%&*ing cables, so we send our shipper instead. He spent the entire day (“the customs’ computer system was down, that’s why it took long”), but came to our office in the evening with a few boxes of cable.

Don’t get me wrong. I’m really glad we finally have our cables and that we can hook our solar panels without voiding their warranty. But can’t there be an easier way to get this transaction done?

I understand Nepal has all these protective measures to control the flow of foreign currency going out of the country, but maybe there’s a way to set a dollar-limit per transaction and then a limit for the quarter or the year on how much stuff a firm can order without having to go through all these shenanigans. One can only hope.

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