Govt injects billions in PEs

HIMALAYAN NEWS SERVICE

KATHMANDU: The government provided a loan of Rs 10.25 billion to public enterprises in fiscal year 2010-11, according to the Finance Ministry.

The government, till 2010-11, has provided a loan of Rs 95.16 billion to public enterprises (PE), according to the recently published public enterprises progress review report. Government’s loans to PEs was Rs 84.91 billion until the end of fiscal year 2009-10.

Nepal Electricity Authority has taken the largest amount of loans from the government which stands at Rs 62.63 billion until the end of fiscal year 2010-11. Nepal Oil Corporation is the second highest borrower with Rs 10.49 billion until 2010-11, the report said.

The average loan investment in public enterprises

increased by 12.07 per cent

in fiscal 2010-11, as compared to the previous fiscal year, the report mentioned.

Janakpur Cigarette Factory, Nepal Orient and Magnesite, Civil Aviation Authority of Nepal, Nepal Water Supply Corporation, and the Agricultural Development Bank each have loans of more than Rs one billion until the end of

fiscal 2010-11.

Similarly, the government invested a total of Rs 92.19 billion worth of shares in 37 public enterprises until fiscal year 2010-11. The share investment amount was Rs 82.75 billion until the end of the previous fiscal year.

The growth rate in share investment was 11.40 per cent in fiscal year 2010-11, the report said.

Of the total 37 public enterprises, 21 are making profits and 14 are incurring losses, the review report said, adding that the remaining two PEs –– Nepal Engineering Consultancy, and Hydroelectricity Investment and Development Company –– did not make any transaction during fiscal year 2010-11.

The report shows that the enterprises which are largely expected to make profits are instead found to be approaching the government for loans, said an official at the Finance Ministry, adding that the trend clearly shows that PEs lack competitiveness. On the other hand, overstaffing is another key problem of public enterprises, he said.

The 37 public enterprises have employed 32,368 people until the end of fiscal 2010-11, said the report. The productivity of employees is very low since service delivery of

public enterprises is dismal when compared to the number of employees in the PEs, the report concluded.