Kathmandu, July 15:

A report by the Finance Ministry estimates that more than double accumulated net profits of all the 36 state-owned public enterprises (PEs) will be needed to rescue Nepal Oil Corporation (NOC).

The NOC is estimated to post a loss of Rs 7.18 billion due to rise in petroleum prices in the international market. But the net profits of the other PEs is estimated to be at around Rs 3.51 billion.

However, in the fiscal year 2006-07, Nepal Telecomm (NT) and Agriculture Development Bank, Nepal (ADBN) pushed the total net profits of the PEs up to Rs 7.96 billion.

The annual review report of the PEs for the fiscal year 2006-07 states that out of total 36 PEs, 22 have registered net profits and 14 are still in losses. In the fiscal year 2005-06, 19 PEs had incurred losses. However, the overall performance of the PEs has relatively improved in comparison to the last fiscal year.

The net profits of the PEs for the fiscal year 2006-07 is at Rs 7.96 billion. “The NT’s Rs 5.98 billion and ADBN’s Rs 1.05 billion net profits have pushed the total profits of the PEs,” states the report. In 2005-06, the profits stood at Rs 2.54 billion only. The estimated profits on the basis of figures so far, was Rs 5.98 billion, according to the report.

The PEs like Udaypur Cement Industry has posted its increase in sales by 33.20 per cent. Dairy Development Corporation and Hetauda Cement Industry have witnessed marginal increase in their sales in this fiscal year. However, the net loss of these seven PEs under industry sector is at Rs 178.1 million.

The seven PEs under service sector have, however, posted a net profit of Rs 568.4 million, a rise by 80 per cent from the fiscal year ahead. The national flag-carrier, Nepal Airlines Corporation (NAC) has posted Rs 342.1 million net profit due to increase in passengers and smooth operation of both of its Boeings. However, this year, it’s profit might plunge because of the Boeings repeated technical glitches and irregular flights on the profit making routes.

The government has also earned Rs 1.48 billion cash dividend from seven of the 36 PEs. But its a mere 1.96 per cent of the government’s total investment.

According to the report, only 21 PEs have completed their annual auditing and the rest have failed to complete their annual auditing on time. The report concludes that the companies which are in losses will add liabilities to the government as they are creating unfounded liabilities.