Govt forms panels to conduct studies on 3 PEs

The Corporation Coordination and Privatization Division under the Ministry of Finance (MoF) has formed three committees to conduct detailed studies on present status of three public enterprises (PEs).
The committees, formed under Prem Banadur Pandey, an MoF official, will assess economic viability, liabilities and assets of Nepal Drugs Limited, Nepal Orind Magnesite and Nepal Metal Company.
Based on the reports, the government will decide on whether to start their operation on its own, hand them over to the private sector or invite a strategic investor, or liquidate them.
“These committees will start working once Terms of References are handed to them,” Hari Saran Pudasaini, an MoF under secretary, told Republica on Friday.
Each of the five-member committee includes chief or acting chief of the public enterprise, two employees from each of the enterprise and an official of the Ministry of Industry, according to Pudasaini.
“They will work together with Pandey to identify strengths and weaknesses of the three enterprises,” Pudasaini informed.
The government move comes at a time when all three state-owned enterprises have either stopped production or never come into operation due to various reasons.
Of the three, Nepal Drugs was shut down around three years ago after failing to comply with the standards set by the Department of Drugs Administration due to lack of funds to upgrade its production facility.
Despite its closure, the government has been injecting around Rs 4 million per month in the company to extend salary to 280 employees who are still in the payroll. However, a business plan submitted by the company in August 2011, states it can generate annual revenue of Rs 1 billion by manufacturing 100 different brands of medicine if the government injects a capital of Rs 520 million into it.
Likewise, Orind Magnesite, which manufactures magnesite and talc powder, has not been operating in full capacity due to lack of modern machineries, while Nepal Metal, which is involved in mining of zinc-lead ores and concentrates from Ganesh Himal area, has not conducted any mining work since its establishment in June 1976 due to technological barriers and financial resources.
The committees will basically assess economic viability and long-term prospect of three public enterprises. They will also evaluate staff liabilities and other liabilities, including bank and government loans, and assets held by the enterprises.
The government is currently conducting similar study on Janakpur Cigarette Factory, which has remained closed for almost three years now due to lack of raw materials and obsolete machineries.