Nepal | July 06, 2020

Transformation of supply mechanism crucial

Sujan Dhungana
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Kathmandu, December 11

As Nepal has already started adopting the new federal system, it is crucial that supply mechanism of different essential goods is transformed accordingly in time.

It is important that distribution networks of essential goods, supply strategies and policies are revisited and transformed as per the federal system rightly to ensure effective supply of essential goods. Among others, the Ministry of Supplies (MoS) and enterprises under it, like Nepal Food Corporation (NFC), Nepal Oil Corporation (NOC) and Salt Trading Corporation (STC), should undertake enough groundwork to transform distribution mechanisms under the new system.

At a time when the country’s supply mechanism is already outdated and unscientific, it is high time for these enterprises to diversify their roles and responsibilities. However, very less has been done in this regard till date.

“Undoubtedly, the current supply mechanism will not work in the federal system of governance and it has to be revisited. We are currently discussing transformation and division of roles and responsibilities of state entities under MoS,” said MukundaPaudyal, spokesperson for MoS.

However, Paudyal informed that MoS will reach a concrete decision regarding revisiting supply mechanisms only after the ministry gets a new leadership.

Fuel storage in every province

In a bid to transform supply mechanism of petroleum products under the federal system, NOC is mulling over setting up fuel storages in all seven provinces.

Developing bulk storage facility for fuel targeting the demand of each province is expected to maintain uninterrupted supply-demand chain in all the provinces. However, the petroleum storage development project of NOC has been stalled since few months after NOC staffers and its leadership were found to be involved in financial irregularities while purchasing land plots meant for development of petroleum infrastructure.

Acting Deputy Managing Director of NOC, SushilBhattarai said that government and all other related agencies should support and coordinate with NOC to expedite the petroleum storage project, not just to transform fuel supply mechanism but also because fuel storage facility is crucial in the country to address regular demand during supply constraints.

Supply under same mechanism

STC, which basically deals with the supply of essential commodities like salt and sugar, says that effective supply can be maintained under the same infrastructure and networks in the new federal system.

UrmilaShrestha, chief executive officer of STC, informed that plans are afoot to authorise seven regional offices of the STC to look after the supply in each province. “However, we shall reach a concrete decision only after the formation of the new government,” said Shrestha.

MoS Spokesperson Paudyal also said that the current supply mechanisms could work even in the federal system with a few reformative steps in the distribution networks and institutions.

“All three supply agencies — NOC, STC and NFC — have to be reformed institutionally to make them fit under the federal system,” said Paudyal.

Among others, Paudyal said that food depots of NFC need to be reformed in a timely manner while NOC’s supply mechanisms have to be made stronger by developing fuel infrastructure accordingly.

“Transforming the supply mechanism under the new system is a gradual process. If we do enough groundwork to adjust to the new supply mechanisms, we can maintain effective supply of goods in the federal system even with the existing infrastructure and supply policies,” added Paudyal.


A version of this article appears in print on December 12, 2017 of The Himalayan Times.


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