Govt begins process to merge four PEs

Published On: August 25, 2016 08:26 AM NPT By: Republica  | @RepublicaNepal

Proposed single entity to oversee supply and import of all essential goods.

KATHMANDU, Aug 24: The government has initiated the process to process four state-owned public enterprises (PEs) to form a single entity -- National Import and Supply Company, which will be responsible for overseeing import and supply of essential goods. 
According to Basudev Sharma Poudel, undersecretary at the Ministry of Finance (MoF), preparations are underway to form a committee to study the merger processes for the four PEs -- Nepal Food Corporation (NFC), National Trading Ltd (NTL), National Seed Company Ltd (NSCL) and Agriculture Inputs Company Ltd (AICL).

“We will soon form a technical committee which will study and fix the merger modality for these government-owned trading companies,” Poudel said, adding: “We have started the process of merging these companies in particular because all their current functions and objectives are similar in nature.”

Poudel says the committee will comprise of representatives from all stakeholders.  
The budget speech for Fiscal Year 2015/16 adopted a policy that opens the door for merging one or more public enterprises and forming a separate National Import and Supply Company.

“Though the budget adopted a merger policy for PEs, it did not talk about the modality for merger of PEs or the name of those public entities that needed to be merged,” Poudel says. According to him, the yet-to-be-formed committee will investigate the progresses and retreats of the four PEs and determine the merger modality. 

At present, 37 state-owned PEs are in operation in the country. 

The government, in the budget itself, had envisioned a separate National Import and Supply Company to look after the trade of essential goods basically after the supply constraints of essential goods in the market in the aftermath of the 2015 earthquake and the border blockade. 

MoF officials say proposed National Import and Supply Company will work in close coordination with other different regulatory bodies of the government.  

Poudel opines that merging low-performing public enterprises will be beneficial as single entity companies can give comparatively better output and its jurisdiction will be clear. According to him, National Import and Supply Company will also need fewer staff to function.

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