KATHMANDU, Feb 15: The Ministry of Commerce and Supplies (MoCS) has directed all its public enterprises (PEs) and development committees to furnish detailed business plans and ways to improve their financial health.
The ministry is looking to beef up these PEs and enhance their competitive strength in the market where dominance of private companies is increasingly high.
A meeting chaired by Minister for Commerce and Supplies Lekharaj Bhatta with senior officials early this week decided to ask loss-making PEs and different development committees under the ministry to submit business plans and strategies for their revival.
Given the weak performance of PEs that fall under our ministry, we have instructed them to come up with convincing plans by February 22 to revive, said Deepak Subedi, joint secretary at MoCS. We have also sought their recommendations to improve financial health of PEs so that their dependence on the government can be minimized.
Four PEs -- National Trading Ltd (NTL), Nepal Food Corporation (NFC), Nepal Oil Corporation (NOC) and Salt Trading Corporation (STC) and two development committees Inter Modal Transport Development Committee and Trade and Export Promotion Centers -- fall under MoCS.
According to the latest review report on performance of PEs released by the government, net accumulated loss suffered by ailing NTL and NFC until the end of the fiscal year 2009/10 stood at Rs 336.62 million and Rs 1.10 billion respectively. Similalrly, NOC and STC reported accumulated losses of Rs 67 million and Rs 8.12 billion until the end of 2009/10.
We can´t withstand the ballooning loss in these PEs, which were once profit-making public undertakings. Hence, we will analyze the plans submitted by the PEs before forwarding them to the National Planning Commission, said Subedi.
The government had established NFC, NTL, STC and NOC for an integrated approach to ensure smooth supplies of basic commodities. These PEs were also expected to undertake necessary intervention to avoid monopoly of private traders in the domestic market.
Different reports in the past have already identified that lack of professionalism, political interference, lack of innovation and weak managerial capacity in the PEs are the major reasons for their worsening financial condition.