Wag the dog

The overwhelming majority of public enterprises (PEs) continue to run on the same old lines — characterised by inefficiency, waste, massive corruption, overstaffing, and, unsurprisingly, being perennially in the red. The recently renamed Nepal Airlines Corporation (NAC) symbolises them. Once the sole provider of air services in the country, NAC has now shrunk to just two planes, with almost all of the domestic market having been captured by the private airliners, and its foreign routes shared by Nepali and foreign competitors. Another glaring feature of NAC is that to run these two planes and a handful of STOLs, it employs between 3,000 and 4,000 men. In this context, the civil aviation secretary, Madhav Ghimire, told a PAC sub-committee the other day that the ministry is working on divesting 49 per cent shares in NAC to make it a private-public venture. Stressing the urgent need for reform to save the corporation, he said that the ministry would decide on the matter within a month. He also talked of the possibility of buying more planes after the injection of private money.

Unquestionably, NAC is in dire need of an overhaul. But so are most of the corporations. And all of them need to be reformed to upgrade service and to boost profitability. Reasons are not far to seek. Successive governments since the Panchayat era have treated the PEs as employment mills, and politicians and government bureaucrats have misused them for their personal or other vested interests. Since the losses would be borne by the taxpayers’ money and they would not be held accountable for whatever they may do, they continued to act improperly despite year-after-year of loss. The initial privatisation drive of the government elected after the 1990 Jana Andolan more or less stalled after the selling-off of some one dozen PEs to private bidders. The entire process stank because of the way they were privatised, most of them doled out for a song.

The idea of getting rid of 49 per cent of the government stakes in NAC to private investors, theoretically, is a sound idea, but it is not new. Its Panchayat-day charter had a provision for that, so have the Acts governing a number of government-owned corporations, including the Gorkhapatra Corporation. It was another matter that the Panchayati rulers never bothered to implement the provision. The question then is not only one of selling off the PEs after it has been thoroughly milked dry; it must rather be guided by some philosophy or concept — whether the government should own and operate commercial enterprises or the media, if so, what kind of them. No government, including this one, has ever been clear on the issue. In the meantime, waste and losses continue to dig deeper in the public purse. Strangely, even under this government, the managements are showing unmistakable signs of making fresh appointments in PEs on contractual or daily-wage basis despite the already bloated bureaucracy, which needs to be pruned drastically in the first place.