In this regard, the board of directors of the Board -- a semi-autonomous body formed to monitor, supervise and regulate all state-owned enterprises -- has forwarded guidelines on appointment of chief executives on the basis of merit to the cabinet. [break]
The guideline was created as per the provision in the PEMB (Formation and Operations) Order, which was introduced by Prime Minister Dr Baburam Bhattarai last December.
“The guidelines basically include steps on selection and suspension criteria of chief executives of public enterprises,” a reliable source of the Ministry of Finance told Republica. “This is necessary as the government is soon removing all chief executives of state enterprises who were not appointed through open competition and replacing them with new ones selected through open competition.”
The government is currently operating 36 public enterprises, which includes telecom companies and banks to oil and media companies.
However, most of these companies are incurring huge losses, turning them into liabilities for the government. Many blame inefficiency, unproductive workforce, unnecessary political interference and technological backwardness as reasons for their unsatisfactory performance. But one of the main reasons, as cited by many, is failure to appoint capable leader to steer individual companies professionally.
The PEMB (Formation and Operations) Order clearly states that the PEMB will play a lead role in selecting qualified people for the post of chief executive of every public enterprise through open competition.
To make the selection process transparent, four indicators - personal qualification and experience, quality of business plan, face-to-face interview and leadership capacity - have been developed.
These indicators will be given different weightages based on which score of each applicant will be derived. This task of tallying the scores will be conducted by a six-member committee, formed under the chairmanship of the Public Service Commission´s chief or someone appointed by him. The committee will then forward the names of three best applicants to the government for final approval.
The PEMB is planning to initiate the task of appointing chief executives through open competition soon after its office is set up in Kathmandu.
The PEMB was established as per the PEMB (Formation and Operations) Order launched last December. It is currently headed by former secretary Bimal Wagle, who was appointed to the post through open competition last month.
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