Govt wasting funds on non-functional PEs

KATHMANDU, MAR 23: 

The government is still investing millions every month as administrative costs of Public Enterprises (PEs) which have remained closed for long.

The government has to bear Rs 20 million as administrative costs of Janakpur Cigarette Factory and Rs 4 million for Nepal Drugs every month, joint secretary at the ministry Khum Raj Punjali said, adding that Nepal Orind Magnesite, and Nepal Metal Company are also completely dependent on the government for their administrative expenses. 

The government is investing around Rs 360 million every year in these four public entities just to distribute the salary of employees and other administrative costs. 

The government has been spending on unproductive areas of these public entities, said Punjali. “Either it has to bring in a strategic partner or introduce a compulsory retirement scheme to reduce the burden. 

Similarly, other public enterprises that are functional also ask for funds to provide salaries. “Radio Nepal has already approached the Finance Ministry for a fund to distribute salaries,” he said. 

The government has listed 39 public enterprises under the recently formed Public Enterprises Directorate Board. “The Maoist-led government is left with no option but to opt for privatisation,” a member of the board said, claiming that the finance minister is looking for a safer option to privatisation since his party’s ideology does not support privatisation.

Finance minister Barshaman Pun seems to be planning to adopt a major policy shift from the ideology of his party, an official at the ministry claimed, saying that Pun has directed officials at the Finance Ministry to bring an appropriate modality for running public enterprises.

During fiscal year 2009-10, some 22 PEs had registered net profits whereas 14 were at a net loss.

Meanwhile, the Public Enterprises Directorate Board is considering to start the appointment process of chief executive officers for various PEs after receiving their status papers. It had directed all concerned ministries to submit the current status of the concerned posts in different public enterprises at the beginning of this month. 

According to the board, it has has once again sent a letter to the ministries to submit their status papers. “It will start the appointment process once it receives the detailed status.”

Source: THT