Three SOEs get Rs 503m

KATHMANDU:

The Ministry of Finance extended a loan of Rs 503.40 million to three troubled public enterprises in the Nepali month of Ashadh (June 15 to July 16) to help them settle their debt and staff liabilities.

The money provided by the ministry in the last month of fiscal 2013-14 was in addition to Rs 2.13 billion that it had extended to various public enterprises previously in the fiscal year.

Of the three state-owned enterprises (SOEs), Nepal Orind Magnesite received a loan of Rs 350.20 million to clear its debt at Employees Provident Fund.

The magnesite mining company, which could never start its operations properly since its establishment in April 1979, had borrowed a sum of Rs 200 million from the Provident Fund in November 1994.

Of the total principal amount, Rs 134.50 million had been previously paid. But interest accrued on the remaining principal amount of Rs 65.50 million coupled with fines had bloated the debt size to Rs 465.80 million.

“Of the debt, Rs 350.20 million in principal and regular interest was paid. And since the lender was also a state-owned enterprise, we requested it to write-off the remaining amount,” a high-ranking official of the MoF told The Himalayan Times.

Another state-owned enterprise that could not pay its debt through its own resources was National Trading Limited.

The trading company was extended Rs 100 million to pay interest on loan of Rs 500 million that it had acquired from Himalayan Bank, Standard Chartered Bank Nepal, Nepal Investment Bank Limited, Machhapuchchhre Bank, Civil Bank and Citizens Bank International.

Earlier in the last fiscal, National Trading Limited was provided a credit of Rs 85.20 million to extend gratuity to around 60 retired staff.

Although the government had long ago decided to shut it down citing growing competitiveness of the private sector in the trading sector, it has not been able to implement the decision so far. As a result, taxpayers’ money is being spent to clear off various liabilities of the company.

Similarly, Nepal Drugs Limited received a sum of Rs 53.20 million in the last month of fiscal 2013-14 to cover salary and other expenses of staff.

Of the money extended to the closed state-owned pharmaceutical company, Rs 13.50 million went to clear off salary of three months of the staff recruited there and another Rs 39.70 million was extended to cover the provident fund cost of 57 months.

Nepal Drugs, which has outstanding liabilities of around Rs 600 million, still has 243 staff members in its payroll despite being closed for the last four years. Although the Cabinet has already extended approval to launch voluntary retirement scheme at the company, the process of laying off staff is yet to begin.

Public enterprises like these have become a burden for the state as they request for couple of billion of rupees every year to meet various expenses. To deal with this problem, successive governments have formed committees and laid various recommendations, but most of the suggestions are never implemented.

Who got what

• Nepal Orind Magnesite received a loan of Rs 350.20m to clear its debt at Employees Provident Fund

• National Trading Limited extended Rs 100 million to pay interest on loan of Rs 500 million from various banks

• Nepal Drugs Limited received Rs 53.20 million to cover salary and other expenses of staff

Source: THT