PE Board moves to reopen 7 enterprises

KATHMANDU, SEP 30 -

The Public Enterprises (PE) Board is gearing up to bring seven public enterprises of the production sector back into operation.

Under its new action plan, the board is preparing to propose the government to let the private sector or cooperatives to operate the enterprises that have remained closed for the last several years.

The seven PEs are Nepal Drugs Limited, Janakpur Cigarette Factory, Orient and Magnicite, Nepal Metal Company, Birgunj Sugar Mills, Hetaunda Cement and Agricultural Tool Factory.

“With growing interest from the private and cooperative sectors, we are working to hand these seven enterprises over to them,” said Bimal Wagle, chairman of the board. He added that the move was planned as per the government’s opinion that production-based PEs should come to operation to contribute to the national economy.

Wagle said the board was discussing the modality on how the private and cooperative sectors could invest in these PEs. “We will come up with a proposal within two months,” he said.

Prime Minister Baburam Bhattarai last week directed government agencies to create conducive environment for the reopening of closed public enterprises in production sector. The Prime Minister’s directives had come amid mounting pressure from locals, political parties and other stakeholders to reopen the Birgunj Sugar Factory that has remained closed for the last decade.

Following Bhattarai’s instruction, the Finance Ministry had asked the board to take care of the matter, stating that the government was committed to find a suitable alternative to reopen the factory.

PE Board officials said they have come to the conclusion that the government cannot run ailing PEs on its own. “The government’s repeated attempts to restore the PEs have so far failed,” said an official.

Finance Ministry officials said the ailing PEs have been incurring losses every year and that a clear policy is required to decide on their existence. The ministry last year provided over Rs 2 billion for the payment of salaries of PE employees.

Khum Raj Punjali, joint secretary at the ministry, said stakeholders at the local level have intensified pressure on the government to reopen Birgunj Sugar Factory by forming a 21-member struggle committee.  “The struggle committee has recommended operating the factory under a cooperative model. The government is also willing to settle the issue related to former employees of the mill,” Punjali said.

Economist Bishwambher Pyakuryal said the government should first categorise the ailing PEs into two classes as per the resource availability, market size and profit making capacity and then hand over the viable projects to the private and cooperative sectors. “The government should conduct as study and inject money to bring other unviable PEs in proper shape,” he said.

The private sector is also positive on the government’s move. Bhawani Rana, vice president of the Federation of Nepalese Chambers of Commerce and Industry, said the private sector would play its part in reviving PEs. “The government and the private sector need to hold discussion on this matter,” she said.

Source: The Kathmandu Post