VIRTUAL BLOCKADE STILL ON; INDUSTRIES REMAIN

C O N F I D E N T I A L SECTION 01 OF 02 KATHMANDU 001679

SIPDIS

STATE FOR SA/INS, DS/IP/SA
NSC FOR GREEN/DORMANDY
LONDON FOR POL-BELL

E.O. 12958: DECL: 08/23/2014
TAGS: PTER PGOV ASEC NP
SUBJECT: VIRTUAL BLOCKADE STILL ON; INDUSTRIES REMAIN
CLOSED; MAOIST VIOLENCE CONTINUES; UK ENVOY'S VIEWS

REF: KATHMANDU

Classified By: Ambassador James F. Moriarty, Reasons 1.4 (b/d)

SUMMARY
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1. (C) Over the weekend, Maoist violence continued around the
country, but Kathmandu Valley remained relatively calm. Late
August 21, the Maoists attacked government offices in Jumla,
destroying several governmental buildings. Also on August 21
suspected Maoists shot an assistant police sub-inspector
about four kms north of the capital and in the same area on
August 23 killed a civilian. Traffic in and out of the
Valley is still below normal. Major industries remain shut,
despite government assurances of security protection and
appeals to reopen.

MAOISTS ATTACK IN JUMLA
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2. (C) On August 21, Maoists attacked Khalanga, a mountain
town that is the headquarters of the Jumla district; the
attack lasted from about 11:00 p.m. to 2:00 a.m. While one
group of Maoists fired on the military base, other groups
that had infiltrated the town torched the police station, the
jail, the district court, the land revenue office, and the
district office, and looted two civilian homes. RNA sources
report that most of the government buildings were empty.
Between one and four Maoists and one RNA soldier were
reported killed. Six prisoners fled during the attack,
although police sources report that three have returned. The
Maoists took some policemen and a land revenue officer
hostage. Police sources also said that they captured some
old rifles and shotguns (not M-16s or INSASes).

THE VIRTUAL BLOCKADE
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3. (C) Traffic movement in and out of Kathmandu Valley has
not improved, even though the press reported that it had
picked up some over the weekend. As of 2:00 p.m. Monday
traffic was less than it had been on Friday on two of the
three major arteries and the total number of trucks and buses
going in and out of Kathmandu Valley was significantly less
today than it had been on Friday. Another notable change
since Friday was on the road going East to Bhaktapur and
continuing north to Thatopani; according to police sources,
there were no buses or trucks on the road today. As of 2:00
p.m. Monday, on the west and south Prithvi-Tribhuwan Highway
a total of 543 vehicles (90 buses, 77 mini-trucks, 204 light
vehicles, and 172 motorbikes) had traveled. On the road
north to and from Nuwakot, a total of 187 vehicles (15 buses,
2 mini-trucks, 81 light vehicles, and 89 motorbikes) had
traveled. The drop comes despite repeated government offers
to provide escorts, RNA assurances, and the press printing
photographs of RNA escorting convoys and providing aerial
surveillance. There are still no reports of any violence or
physical barriers on the way to or from Kathmandu Valley. On
August 23 afternoon, Emboffs traveled just beyond the edge of
the Kathmandu Valley and confirmed traffic was light. They
did not observe any overt Maoist roadblocks or other activity
on the Prithvi-Tribhuwan highway. They saw a mix of civilian
and armed police forces observing traffic.

SHOOTINGS IN KATHMANDU VALLEY
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4. (SBU) There have been two shooting incidents in the same
area about four kms north of the capital over the last two
days. On the morning of August 21, an Assistant Police
sub-inspector died while undergoing treatment after being
shot. A civilian was killed in his home the morning on
August 23. Police suspect Maoists are the perpetrators
because of the weapon used and the assassination-style of the
shootings. RSO is developing more information regarding the
motives for the shootings.


INDUSTRY SHUTDOWN AND OTHER ACTIVITIES
--------------

5. (SBU) The Maoist-threatened industries remain closed.
Government spokesman Minister of Information and
Communications Dr. Mohammad Mohsin told the press August 21
that in its meeting the day before, the Cabinet had decided
to make public the whereabouts of the detained Maoists within
a month. This would meet one of the Maoists' primary demands
made of the industries. The companies told the press that
they hoped that the government's statement would have a
positive impact and that an understanding could be reached
that would allow them to reopen. The morning of August 22,
people involved in industry, trade, tourism and hotels took
part in a rally organized by the Federation of Nepalese
Chamber of Commerce and Industries (FNCCI),Nepal Chamber of
Commerce (NCC) and the Hotel Association Nepal. The Victims
of Maoist Violence also were out. The Bottlers Nepal general
Manager estimated that about 700 Coca-Cola employees
participated and between 8,000 and 10,000 total took part in
the rally. The rumored general strike (or bandh) did not
occur on August 23rd.


UK SPECIAL ENVOY UPBEAT
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6. (C) In an August 20 meeting with the Ambassador, UK
Special Envoy Jeffrey James said he thought the current
Nepali government was as good as could be hoped for - it knew
what it had to do and was setting about it the right way.
However, he cautioned that the government could not take too
long before it entered talks with the Maoists. James was
finishing a week of consultations with various players about
a possible peace process. In response to the Ambassador's
question as to why the Maoists would want to negotiate now,
James stated that the Maoists knew that if the legitimate
political forces were united, they would win and the trend
was in the direction of the parties getting together. He
added that the Maoists knew they would have problems
governing, in large part because of the attitude of the GOI.
("The Indians would implement a blockade and topple a Maoist
government within a week." (sic)) James expressed some
concern about the role of the Palace. He advised that the
King should give full authority to Prime Minister Deuba along
with clear instructions on the course ahead. (The Ambassador
noted that both the King and Deuba believed that the Prime
Minister had been granted such authority over future talks.)
James also warned that the King should tell the RNA to be
careful. James concluded that he thought the government had
two to five months to act and that talk of elections was
irrelevant at this time.
MORIARTY