Figures released by the Ministry of Finance on Sunday show that of a total of 36 PEs, 19 incurred losses and only 17 PEs operated in profit in the last fiscal year ended mid-July 2008. In the fiscal year 2006/07, only 14 government-owned enterprises had incurred losses, while the rest had generated profits.
"This clearly indicates the condition of state-owned enterprises is deteriorating," states the report released by the Ministry of Finance.
In the review period, only four PEs were able to give a dividend of Rs 1.51 billion to the government. This is only 1.8 percent of the total of Rs 81. 92 billion invested by the state on these companies.
The report states that Nepal Telecom (NT) and Rastriya Banijya Bank (RBB) were among the few profit generating enterprises. NT had generated Rs 7.94 billion in net profit and RBB´s net profit had stood at Rs 1.77 billion in the fiscal year 2007/08.
However, a huge loss of Rs 5.57 billion incurred by Nepal Oil Corporation in the review period had shed the total profits generated by state owned enterprises to Rs 4.94 billion. In the FY 2006/07, net profit of the entire PEs had reached Rs 7.74 billion.
Inefficiency, incompetence, callous indifference to marketplace changes and reliance on the ´do nothing´ boardrooms have been identified as the major reasons behind the weak performance of these state-owned enterprises.
Known for railing against mismanagement and poor performance, these companies are also known for providing shelter to too many employees. In the FY 2007/08, 36 PEs had a total of 34,170 staff members. "But if compared with private companies of similar nature, per employee productivity in public enterprises is far lower than that in the private sector," states the report. "This is only increasing the overhead costs of public enterprises."
The report shows the total liabilities of 36 PEs surged to around Rs 21.31 billion in the review period. This amount came out of the government-owned enterprises´ failure to provision gratuity and other similar monetary benefits that these companies should give to their employees.
On top of all these, the PEs are also grappling with the problem of shrewd book-keeping. Till FY 2007/08, only 19 state owned enterprises had audited their accounts. "This is the epitome of carelessness and managements´ incompetence," states the report.
rupak@myrepublica.com
Related story
21 PEs disobey OAG direction to audit
