The finance ministry had sent the draft of the Formation Order to the cabinet in April after the political leaders agreed to form a high-level autonomous body to properly monitor and manage state-owned enterprises (SOEs) - many of which are operating in losses, piling huge financial burden on the government. [break]
“Sadly, the draft that was given utmost priority has continued to gather dust in the cabinet,” said a high-ranking finance ministry official, disclosing that the ministry has not received any response from the cabinet.
During the budget speech in parliament in mid-July, the then finance minister Bharat Mohan Adhikari had said, "The government will form a high level board to regulate and efficiently streamline operations of all public enterprises."
“Yet nothing has been done so far” the official, who has been tracking the issue, told Republica.
The finance ministry had floated a proposal to form the board after respective ministries were not able to enhance the performance of public enterprises.
Currently, 36 public enterprises are operating in the country. Of this 14 are operating in net loss. To cover losses, the government provides money to the loss-making public enterprises every year. So far, the government´s investment in these enterprises has topped Rs 231.9 billion, meaning many of these firms are only consuming taxpayers´ money without giving any return to the government.
Many reasons have been cited for dismal performance of the state-owned enterprises. They range from inefficiency and lagging productivity to unnecessary government inteference and over-staffing. One among them is said to be lack of coordination among public enterprises and related ministries.
Currently, different public enterprises are registered under different ministries, making ministries the custodian of state-owned firms. But public enterprises complain that ministries have not been able to play the leadership role, resulting in delays in decision making process. This is hampering the performance of public enterprises.
For instance, National Trading Limited, which is not allowed to sell products of Hetauda Cement and Udayapur Cement, has frequently asked its line ministry to discuss the matter with the ministry overseeing the two cement factories.
But nothing has been done so far. Nepal Timber Corporation has also been asking its line ministry to give it permission to sell wooden pillars to Nepal Electricity Authority for a long time. Yet nothing positive has come off so far.
Even Road Department, Nepal Telecom, Nepal Electricity Authority and Nepal Drinking Water Corporation have complained about lack of coordination during times when drainages are constructed or undergo maintenance.
The finance ministry official said many of these problems will be resolved once the board is established as the board will be able to give all its attention to public enterprises.
Apart from this, the establishment of board is expected to streamline works of various enterprises and bring uniformity in operation and administrative procedures like appointment criteria of different public enterprises.
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