Tanka Mani Sharma, joint secretary at the Ministry of Finance (MoF), told myrepublica.com that the meeting had decided to invite strategic partners for Agriculture Development Bank, Nepal Telecom and Nepal Bank Ltd. It also decided to divest shares of Small Farmers Development Bank, four rural development banks and Nepal Stock Exchange. The committee will also decide on whether to bring in strategic partners or divest stake of Nepal Metal Company and Nepal Orient Magnesite. [break]
This was the first meeting of privatization committee since September 7, 2007.
The committee also decided to regularly call chief executives of PEs at the privatization committee´s meeting, in a bid to acquire regular update of the state-owned enterprises. “From the next meeting, we will call executives of PEs to present their current status before the committee,” Sharma said.
The meeting also decided to seek reform proposals from the eight selected PEs.
The Ministry of Finance has already decided to divest shares of Dairy Development Corporation (DDC), Herbs Production and Processing Company Ltd (HPPCL), Hetauda Cement Factory (HCF), Nepal Drugs Ltd (NDL), National Seed Company Ltd (NSCL), National Trading Ltd (NTL), Gorkhapatra Corporation (GC) and Agriculture Input Company Ltd (AICL) to the public. Among them, DDC, HPPCL, AICL and GC had suffered loss during 2007/08.
The PEs were selected considering their direct relation with people at the grassroots level. The government is mulling over transferring shares of these PEs to community institutions such as farmers´ groups, community forest user groups and dairy producers´ co-operatives, among others. These PEs have already submitted their tentative concept paper to the Finance ministry, stating their financial position and future plans to revitalize their financial strength.
The committee has also decided to speed up the process of privatizing Janakpur Cigarette Factory (JCF) and directed Nepal Rosin and Turpentine and Nepal Tea Development Corporation to resolve their long standing land dispute. It also decided to initiate the process of converting Nepal Airlines Corporation (NAC) into a public limited company. Though the government had decided to develop NAC as a public limited company seven years ago, it has yet to get a concrete shape.
The fresh initiatives have come at a time when burden of PEs on the government is mounting due to weak management, overstaffing, and eroding competitive power of PEs, among others.
Through the budget for the current fiscal year, the government has announced the policy for effective implementation of share divestment process to increase people´s ownership in projects to be built by such PEs.
prabhakar@myrepublica.com
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