MoF has already worked out a framework of the new institution, delineating its function and responsibility. “We will soon forward it to the cabinet for approval,” said Tanka Mani Sharma, joint secretary at MoF.[break]
If the government approves the proposal, the new institution will takeover the authority of formulating policies related to public enterprises, recruiting board members and chief executives, monitoring their activities and checking anomalies in their operations.
So far, public enterprises are handled and monitored by concerned line ministries. As a result, there is no uniformity in the way they are managed.
Also, as concerned line ministries reserved the authority to recruit and appoint key staff like executive chiefs and board of directors, political leaders heading the ministry often misused their powers to appoint their “near ones” in the important posts.
Many ministers are known to have misused this authority by appointing party cadres as board directors and executive heads.
Several high-level commissions formed at different intervals have pin-pointed undue party politicking in appointments and interference in internal management as major problems plaguing PEs. Such practices have led to overstaffing, erosion of productivity and leakages in PEs.
“No wonder most of the PEs have turned sick and become useless institutions,” said a source.
Under the new framework, however, MoF plans to handover all supervisory, appointment, decision making and monitoring authority to the PEGA from the concerned ministries.
“Concerned ministries can ask PEs to submit their performance reports. However, they will no more be able to appoint board members and general managers, among others,” said the source.
This, MoF believes, will help check undue political interference in the PEs. As for PEGA´s structure, it plans to make the authority a small and efficient body.
Once freed from vested political interests, PEGA can then push for increasing their productivity, plugging leakages and streamlining their operations professionally, said the source.
There are currently 36 public enterprises promoted by the government. However, most of them are reeling under huge losses and have been depending on government loans and investments to carry on their operations.
Given the situation, the latest commission formed to review government budget management and expenditure system appointing the chairmen, boards of directors and chief executives on the basis of professional skill, transparency and open competition in order to run the ailing PEs under competent management and end political interference.
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