Govt bucks up to find strategic partner for NT
KATHMANDU, MAR 22 -
After almost two years of dillydallying, the government is now showing urgency to bring a strategic partner in Nepal Telecom (NT). According to the Ministry of Finance (MoF), a joint-secretary level committee will soon be formed to fast track the process.
A secretary level meeting of the MoF and the Ministry of Information and Communications (MoIC) recently decided to form a technical committee that would do homework for divesting the NT stake.
The government had earlier planned to divest at least 26 percent of the NT equity to a foreign partner. “The committee will be headed by the joint-secretary from the MoF,” said Khum Raj Punjali, the head of the corporation coordination division at the MoF.
MoIC Secretary Abhanindra Shrestha said the decision to form the new committee was taken to speed up the work on the strategic partner plan as the government had announced it would select the partner within mid-July this year. “The committee will prepare bid documents and take forward all related work,” said Shrestha, who is also the Chairman of the NT board.
According to Punjali, the committee will decide on what conditions it would include in the contract while seeking the strategic partner.
The NT privatisation process had begun in May, 2010 with the formation of a sub-committee headed by Maoist lawmaker Hari Rokka. Since then, three separate studies have been carried out on NT divestment—one by the MoIC and the other two by the MoF. A technical committee led by Suresh Pradhan, formed to outline the terms of the contract and bid documents, had already presented its initial report. However, little progress has been made so far in the matter.
With increasing competition in the telecom sector, the demand to find a strategic partner for the NT has been growing. Telecom experts say divestment of NT makes better sense, given the aggressive expansion of private telecom operators. With private operator Ncell expanding its operations aggressively, there is growing concern over whether NT, till now the best performing PE, would go the Nepal Airlines Corporation and Nepal Oil Corporation way.
NT officials say that along with bringing in a strategic partner, the Public Procurement Act also needs amendments. NT, according to them, has been losing its market share to competitors as the state-owned telecom utility has to adhere to government rules and regulations, including the Public Procurement Act, when it comes to implementing new projects. This, according to top NT officials, makes the whole process lengthy and cumbersome in comparison to private telecom companies that can start new projects in an instant.
“The government should make it clear that NT will not have to follow complicated rules when it works with a strategic partner,” a high level official at the NT said. According to the official, though the government decides to give 30 percent stake to the strategic partner in future, it will still have 62 percent share in the NT.
Source: Kantipur
