Nepal | May 27, 2020

Government preparing to revive seven sick state-owned enterprises

Himalayan News Service
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Kathmandu, September 29

However, industry ministry is in no mood to entertain foreign investment in such firms

The government is preparing to revive seven different sick state-owned enterprises.

As per officials at the Ministry of Industry, Commerce and Supplies (MoICS), groundwork is underway to re-operate Butwal Dhago Udhyog, Hetauda Kapada Udhyog, Gorakhkali Rubber Udhyog, Oriental Magnetite Industry, Birgunj Sugar Industry, Janakpur Cigarette Factory and Biratnagar Jute Mills.

The government once again is gearing up to revive sick industries after the domestic private sector and foreign investors showed interest to invest in such state-owned companies.

However, the MoICS is in no mood to entertain foreign investment in such firms while it is planning to let the private sector operate these sick firms.

“Most of the domestic investors have shown interest to operate Gorakhkali Rubber Udhyog and Janakpur Cigarette Factory,” informed an official at MoICS seeking anonymity. While the prospects of allowing the private sector to operate these two firms are being examined, the government is in the final stage of giving the Hetauda Kapada Udhyog and Butwal Dhago Udhyog on lease to the private sector, as per the official.

The MoICS has already tabled a proposal at the Cabinet to revive Hetauda Kapada Udhyog and allow the private sector to operate Butwal Dhago Udhyog on lease.

“A committee has been formed to study the prospects of reviving other sick enterprises of the government. The revival process of such state-owned enterprises will begin after the committee submits its study report,” said the official.

The government had initiated the process to revive various defunct state-owned companies during the leadership of Nabindra Raj Joshi at MoICS in 2017. However, with the change in government, the process got less priority.

Meanwhile, Industry Minister Matrika Prasad Yadav has once again started the process to throw a lifeline to different sick companies ofthe government.

Industry ministers are often divided over reviving such companies. Former industry minister Sunil Bahadur Thapa, during his tenure at MoICS, was against reviving such enterprises citing that the private sector should be allowed to run industries while the government should only focus on maintaining good governance with the change in global
market scenario.

However, former industry minister Joshi had prioritised reviving such companies citing that the government should run its own industries to guide the market, ensure product quality, control pricing and ensure effective supply of goods and services in the market. However, Joshi had said that such firms should be self-sustained and should not add financial pressure on the government.


A version of this article appears in print on September 30, 2019 of The Himalayan Times.

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