Five broke PEs get Rs 36m to pay salaries, Dashain bonus

KATHMANDU, OCT 08 -

The government has given Rs 36 million to five cash-strapped public enterprises (PEs) to pay the salaries and Dashain bonus of their staff. The employees of these state-owned corporations have not received their pay for the last two months.

According to the Finance Ministry, the enterprises that have been bailed out are Nepal Drugs, Nepal Railway, National Productivity and Economic Development Centre, Nepal Metal Company and Herbs Production and Processing Company.

These five PEs and Janak Education Materials Centre, National Trading and Cultural Corporation had asked for Rs 819.4 million which they would spend on staff salaries and administrative expenses.

However, the Finance Ministry did not give any money to National Trading which wanted Rs 100 million to pay retirement benefits to its employees. Cultural Corporation also received no funds. It had asked for Rs 80 million to construct its building, according to Janma Jaya Regmi, joint secretary at the Finance Ministry. He said that the ministry had okayed Rs 50 million for Janak Education Materials Centre out of its demand for Rs 550 million for printing books.

Regmi added that these PEs, being state-owned entities, were required to pay their staff before the Dashain festival. “The PEs have been like a white elephant. They have been swallowing state funds without producing any achievements for the country,” said Regmi, who is also the chief of the ministry’s PEs coordination division.

Most of the PEs that asked the government for money ran up losses in fiscal 2011-12. Out of the 37 PEs in the country, only 15 have been making any money, according to the Annual Performance Review of the PEs 2013. The PEs incurred net losses to the tune of Rs 3.49 billion in fiscal 2011-12.

Regmi said that the ministry had given money to the PEs along with an admonition to cut their administrative costs by removing temporary staff being paid on a daily wage basis. “We have also told them to submit their plans for a voluntary retirement scheme (VRS), severance package and other measures to slash administrative expenses,” he added.

The government has provided the bailout money as a loan investment. So far, it has poured Rs 203.64 billion into the PEs in the form of shares and loans. In 2011-12, the state-owned enterprises paid Rs 6.26 billion in dividends to the government, which is 6.1 percent of the total investment, according to the report.

Meanwhile, only 21 out of the 37 PEs have completed their audit as of the last fiscal year. Three of them-Rastriya Beema Sansthan, Udaypur Cement Factory and Nepal Orind Magnesite-have not had their books audited for the last eight years.

Public Enterprises    Demands    Given

Nepal Drugs     Rs 30m    Rs 13.3m

Nepal Railway    Rs 24m    Rs 5m

Nepal Productivity& Eco     Rs 6m    Rs 2.4m

Nepal Metal Company    Rs 1.7m    Rs 1.7m

Janak Edu Materail Centre    Rs 550m    Rs 50m

Herbs Production & Processing    Rs 27.7m    Rs 13.6m

National Trading    Rs 100m    —

Cultural Corporation     Rs 80m    —

Source: The Kathmandu Post