Kathmandu, October 4:

The government is all set to announce a fresh bid for the third time with a view of handing over the state-owned Nepal Resin and Turpentine Ltd (NRTL) to a private party. The upcoming privatisation bid call is the third one, as previous bids didn’t receive much attention from potential private parties. In 2003, the government took a decision to privatise the ailing state-run enterprise in order to run it in an efficient manner.

NRTL has remained closed for the last two and half years after incurring heavy losses. Necessary preparations have already been finalised following a ministry level meeting approved to go for a fresh bid for the country’s only state-run resin and turpentine processing company, said a senior official at the ministry of finance.

Established in 2043 BS at Attariya of Kailali district, NRTL was primarily founded for processing pine rosin to produce turpentine and resin that is abundant in the mid-west and far-west region of the country. The government has decided to lease out immovable property like land and buildings for at least 10 years, while the machinery and lab equipment will be sold, said officials at the privatisation cell of MoF. The official also informed that the government is to introduce new modalities in order to create a congenial environment and encourage more private parties to take part in the bid.

The privatisation process has slowed down mainly due to land ownership that belongs to the department of forestry. Now the problem is resolved and the potential private party can take the land on a long-term lease, the official added. “The beauty of NRTL is abundant availability of raw resin in the area where the factory is located,” he said. He also expressed hopes that more private parties would take part in the bidding process since terms and conditions have been made flexible and transparent.

The privatisation process has slowed down in recent years, though the government continues to make an avowed commitment towards privatisation in pursuit of free market reforms and a liberal economy. The government still owns 43 different public sector enterprises. Most of the enterprises in the industrial, service, social and trading sector are running at losses, while those in the public utility sector are earning profits, mainly because they enjoy monopoly of services. If everything goes as planned, NRTL is the second public enterprise in which the privatisation process has been started. The government has already asked for a proposal from the potential private party, Lumbini Sugar Mills. Though the privatisation process being touted as one of the major agendas for financial sector reforms, it has been idle for the last couple years as the country remains tangled in a political crisis.

NRTL had incurred a net loss of over Rs 9.3 million before its closure in 2003 and the company’s net worth has also gone negative, according to public enterprises report 2004. Moreover, it has not done auditing of profit and loss since 1997-98.