Business»
State-owned enterprises to be put under scanner
KATHMANDU, NOV 19 - The government has formed a committee headed by the finance minister to find out what ails state-owned enterprises (SOEs) and recommend ways to turn them around.
The committee, which includes the ministers for commerce and supplies, law and justice, forest and soil conservation, industry and agriculture and cooperatives, has received its terms of reference recently, said a Finance Ministry official. The finance secretary is member secretary of the committee.
"Given that most of the public enterprises are incurring losses and not performing well, the government went for constituting the committee which will recommend ways to improve their performance," said Tanka Mani Sharma, joint secretary at the Finance Ministry. Out of the 36 operating SOEs, 19 were in the red in the fiscal year 2007/08, said the Finance Ministry.
Profits earned by public enterprises dropped to Rs. 4.94 billion in the fiscal year 2007/08 from Rs. 7.74 billion in the previous year.
As per the committee's terms of reference, it will recommend ways of enhancing the competitive capacity of SOEs, designing a public information system for disseminating information to the public about their existing operating status and forming a mechanism for monitoring their performance.
It will also suggest the criteria to be adopted for an objective evaluation of the performance these enterprises.
"The committee will also recommend whether the enterprises should be brought under a single entity like proposed in the last fiscal year's budget or something else," said Sharma.
Likewise, it will recommend what type of board and other institutional mechanism should be formed for SOEs which have been incurring losses and for those which have been making a profit.
It has also been given the responsibility to formulate the criteria for political appointments to public enterprises. "The appointment of party cadres instead of professional persons to public enterprises has also been causing much damage to them," said Sharma.
"The committee will also suggest an operating procedure for the formation of the board of directors of SOEs who are appointed as per the committee's recommendation," said Sharma.
Despite a massive investment of Rs. 87.98 billion as of the fiscal year 2007/08, the government received only Rs. 1.51 billion as dividend in return, said the Finance Ministry.
Headlines
Advertisements
