PEs create financial burden of Rs 724.38m on government

KATHMANDU:

Troubled state-owned enterprises continue to create financial burden on the government, as they have taken away Rs 724.38 million of taxpayers’ money so far this fiscal year to meet various expenses.

Of this amount, the biggest chunk, or Rs 500 million, went to Janak Education Materials Centre, a financially troubled state-owned printing company, shows the latest report of the Ministry of Finance (MoF), which extends money to public enterprises in the form of loans.

The company had walked away with a loan of Rs 200 million in September to purchase papers and other raw materials to publish books and settle outstanding payment related to purchase of machinery parts. It has again asked for a loan of Rs 300 million for the same purpose.

“The loan amount has already been approved. But the company is yet to collect the money,” a senior MoF official said.

Another public enterprise that borrowed money from the government this fiscal was Janakpur Cigarette Factory. Although the company has already been shut down by the government due to its failure to introduce reforms and compete with private companies, it still took away Rs 173.02 million this fiscal to pay due tax amounts and settle debt.

MoF report shows that the company had borrowed Rs 29.28 million from the government to clear its dues at Janakpur Municipality, Rs 111.54 to clear due tax amount at Inland Revenue Office of Janakpur and Rs 32.20 to settle its debt at Everest Bank.

Another firm which has continued to exhaust state resources is Nepal Railway Company. The loss-making company, which uses a beat-up train on 29-km Janakpur-Jaynagar section, walked away with Rs 17.04 million to settle liabilities of retired staff members.

Also, Nepal Drugs Limited borrowed Rs 12.80 million from the government to settle liabilities of retired staff members. Nepal Drugs, which has outstanding liabilities of around Rs 600 million, still has 243 staff members in its payroll despite remaining shut for the last four years. As a result, the government has been forced to fork out over Rs four million per month to cover salary expenses of the staff at the company.

Similarly, the government extended Rs four million to Nepal Orind Magnetise so far this fiscal, of which Rs 3.15 million went to pay salaries of staff and the rest to cover the cost involved in fighting a legal case. “An Indian company, which was appointed to build a ropeway to ferry stones from the mine to production site, had filed a court case against Orind Magnetise after it scrapped construction process midway,” said the MoF official.

Among others, Rs 10.57 million went to National Construction Company Nepal to settle liabilities of staff members who were laid off following closure of the company, Rs 5.40 million was extended to National Productivity and Economic Development Centre to clear dues of retired staff and cover remuneration expenses, and Rs 1.55 million was given to Nepal Metal Company to settle liabilities of retired staff, cover administrative costs and host annual general meeting.

SOurce: THT