Three PEs get Rs 160m from govt
KATHMANDU, MAR 22 -
The government is still pumping cash into public enterprises (PEs) despite their poor performance and the habit of their chiefs of running them into the ground.
The Ministry of Industry (MoI) recently decided to provide Rs 160 million to three PEs—Gorakhkali Rubber Udyog, Janakpur Cigarette Factory (JCF) and Nepal Drugs Limited (NDL). Ministry officials said the money has been intended as a short-term measure to help them run their businesses.
“The amount provided to them is not enough, but it will at least help them get back into operation,” said Industry Secretary Umakant Jha.
The MoI has given Rs 60 million to JCF and Rs 50 million to NDL. JCF has shut down operations due to financial problems while NDL has been closed due to manufacturing problems.
“The money provided to JCF will be mainly spent on administrative expenses including salary,” said a senior MoI official. “NDL will use the money to restart operations.” The Rs 50 million given to Gorakhkali Rubber Udyog will be spent on its basic necessities. It has not been operating as it has not been able to procure raw materials on time.
NDL shut down almost three years ago after the Department of Drugs Administration refused to renew its operating license citing failure to meet manufacturing standards. The NDL management said the money was not enough to resume production. It had asked for Rs 100 million to upgrade its manufacturing facilities and purchase raw materials for its product line of around 20 types of medicines.
“Though the company needs a huge amount of money to pay its staff who have not received their salaries for a long time, the money is not being given for administrative expenses,” said Sita Ram Timilsina, joint secretary at MoI. The money should not be spent on any purpose except production of drugs, he added.
JCF received Rs 60 million against its demand of Rs 606.4 million. “The money provided to the factory is basically for paying its staff and getting things in order to get back into operation,” said Timilsina. He added that the MoI has appointed Hridaya Narayan Mishra as acting general manager who has been assigned to diagnose the JCF’s current status and recommend measures for its revival.
MoI officials said the bailout package was a short-term measure and that long-term plans would be required to revive the moribund corporations. Secretary Jha said the MoI would soon issue a long-term vision with regard to PEs. According to him, his ministry has recommended four options to the government including running the PEs by the government, going through a cooperative model, handing over the management as a contract and privatization of PEs.
The MoI had sought Rs 5 billion for long-term management of six PEs in response to a request by the Ministry of Finance (MoF) to provide detailed proposals for their reformation.
Source: Kantipur
