Top officials came up with the modality with priority at a time when the government is screening the financial viability of the state-run enterprises to take decision on whether or not to continue their stakes.[break]
"We will encourage some PEs to search reliable domestic or foreign strategic partners for their better management. Collaboration with strategic partners for management of PEs will be one of our key options," Tanka Mani Sharma, joint secretary at the Ministry of Finance, told Republica on Thursday.
Currently, Nepal Telecom (NT), Nepal Airlines Corporation (NAC) and Nepal Stock Exchange (Nepse) are seeking strategic partners for their management. The Ministry of Finance has already given its nod to NT to seek strategic partner. Experts have also suggested NAC to find strategic partners to bail out the ailing national flag career. NT and Nepse are making profit, while NAC is suffering loss.
Nepse Chairman Tanka Paneru has already revealed the offer of Bombay Stock Exchange (BSE) to acquire 5 to 10 percent stake of Nepse.
Sharma also said the government was also taking up a policy of giving management contract or appointing executives in PEs on the basis of their performances.
"We will decide on options of modality of management after assessing the financial health and viability of the PEs," said Sharma, who also heads PE Coordination Division at the MoF.
On the back of burgeoning loss in government enterprises, concerned ministries have also expressed their common views on ending political interference, management contract for PEs and appointing management team on merit basis.
At a time when the Finance ministry is assessing the viability of more than three dozen PEs, Finance Minister Surendra Panday and Industry Minister Mahendra Prasad Yadav are also in favor of restructuring the government undertakings given their discouraging performance.
Public Accounts Committee (PAC) of legislature-parliament summoned Pandey and Yadav along with secretaries on Thursday to seek clarification on reported irregularities and mismanagement in state-owned Janakpur Cigarette Factory (JCF).
Speaking at the meeting, Pandey also floated management contract as one of the best options for management reforms in PEs. "Rastriya Banijya Bank (RBB) is the perfect example of successful management contract where chief executive is free from political interference and ever powerful. So, we can replicate the management modality of RBB in other state-owned entities too," said Pandey. He also said the government has opened option for finding strategic partner for the management of Nepal Bank Ltd also.
The Finance Minister was also of the view of introducing a legal provision to appoint chief executives of PEs through constitutional body so that they can be removed from their post only through impeachment.
Industry Minister Yadav said the government should adopt the policy of contracting out the management of frail PEs so that the government needn´t have to invest on them from the state coffer in the coming days. “Political interference and political instability have aggravated the management capacity of PEs. We should end such practice and pave the way for recruiting executives on the basis of their performance and capacity," Yadav said.
PAC seeks JCF strategy
PAC has directed the Ministry of Industry (MoI) to come up with a concrete policy to deal with ailing financial condition of JCF and turn it into a profit-making entity.
The PAC also directed MoI to implement the directives of MoF and submit the report of probe committee on reported irregularities in JCF within 15 days.
The MoF had last month sent seven-point directives to MoI, seeking clarification for the procurement of unnecessary materials in JCF and asking it to prepare a report on technical viability, time and budget required for effective functioning of JCF, programs on management reforms and immediate appointment of management.
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