HIMALAYAN NEWS SERVICE
KATHMANDU: It looks likely that unfunded liabilities of public enterprises (PEs) will cost the government dearly in the coming year.
The yearly progress report of Public Enterprises released by the Finance Ministry has blamed the lack of fiscal discipline among public enterprises for the increase in unfunded pension and other post-employment benefit liabilities. The government will have a total of Rs 24.29 billion unfunded liabilities of PEs in fiscal year 2011-12, said the report, adding that the volume of such liabilities is on a steep rise.
Unfunded liabilities was Rs 13.63 billion in fiscal year 2009-10 but increased by Rs 3.20 billion –– Rs 16.83 billion –– in fiscal year 2010-11, it further added.
The report has clearly mentioned that employees have a facilities-oriented mindset at public enterprises which has impacted the overall performance of government-owned public entities.
Most PEs have also not deposited the required amount to pay for the pensions of their retired employees, according to the report.
The government will have to take on the burden of unfunded liabilities in the long run, the report revealed. "The concerned public enterprises and ministries responsible for overseeing them, should work together to reduce unfunded liabilities since the trend will cost the country dearly," said the report.
Meanwhile, the report said that more than half the public enterprises have a management committee with more than five members.
The government has adopted a policy of appointing a maximum of five members in management committees, it said, adding that the policy has not been implemented since most PEs have more than five members.
The government's policy is to appoint a board member of PEs based on education, qualification and expertise of the concerned person, according to the report.
Twenty public enterprises including Nepal Drinking Water Corporation, Agricultural Development Bank, Nepal Oil Corporation, Nepal Electricity Authority, Nepal Airlines, Nepal Telecom, and Dairy Development Corporation have more than five board members.