Responding to lawmakers, who raised serious concerns over poor management and soaring liabilities of the PEs, at the meeting of Public Accounts Committee (PAC) of the legislature-parliament, FM Pandey said bringing all PEs under a single umbrella was very necessary for overseeing their operations effectively, streamlining their operations and improving their management. "For this change, we need a fresh approach and a separate law governing the PEs," said Pandey, responding to lawmakers, who questioned him for the poor management of the state-owned enterprises and their growing loss, despite injection of huge funds by the government.
Presently, PEs fall under different ministries´ ambit and poor inter-ministerial coordination has rendered systemization of their operations difficult.
To do away with this mess, Pandey even requested the parliamentarians to formulate a new law that he deemed necessary to govern the PEs.
According to reports presented at the PAC, the government has so far invested Rs 166 billion in the form of shares and loans in 36 PEs. Of them, however, only 14 are operating on profit.
Pandey also asked the lawmakers to form a precise mechanism to appoint and sack executives of the public enterprises so as to avoid political interference in PEs´ day to day operations.
Finance Secretary Rameshwore Prasad Khanal suggested making investment in PEs on the basis of their performance and viability in order to avoid adding unnecessary burden on the government. He also expressed dissatisfaction over the existing trends in PEs to distribute bonus to the employees on the basis of latest year´s profits, ignoring the huge accumulated loss recorded in previous years.
"PEs are distributing bonus despite huge accumulated loss. But the government is compelled to bear their past liabilities. This practice must come to an end," stated Khanal. He also said the government was presently bearing bonus liability of more than Rs 500 million even for loss making PEs.
Pratap Kumar Pathak, secretary at the Ministry of Industry, said PEs´ are having difficult time competing with private competitors since they are operating under Public Enterprises Act. Private companies operate under Company Act. “There should be a high-level mechanism to aggregate laws governing public and private companies as the existing Public Enterprises Act doesn´t provide sufficient legal authority to PEs to compete with private companies.
Purushottam Ojha, secretary at the Ministry of Commerce, said most of the PEs under the ministry are facing crunch of working capital, which have aggravated supplies of essential commodities in the market. "Though more than 300,000 quintals of food grains have been demanded from remote districts, we have been able to supply only one-third of the demands due to resource constraints of Nepal Food Corporation," Ojha said.
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