Of the 37 public enterprises (PEs) operating in the country, only two --
Nepal Telecom (NT) and Rastriya Banijya Bank (RBB) -- paid dividend to
the government in the fiscal year 2011/12.
The Annual Review of PEs released by the Ministry of Finance (MoF) on Friday showed the government received Rs 6.26 billion in dividends, up from Rs 5.49 billion that it had received in 2010/11.
The government received only 6.11 percent returns on the investment that it made on PEs, majority of which are in red, in 2011/12. It invested Rs 102.41 billion in shares and Rs 101.23 billion in loan in the PEs until the end of the fiscal year 2011/12. Until 2010/11, its investment in shares and loan stood at Rs 92.19 billion and Rs 95.16 billion, respectively.
Political interference and growing unionization have dented competitive capacity of PEs. As a result, they are giving lower returns despite increased investment on them by the government.
The review report also states that 15 of the 37 PEs in the country made profit in 2011/12. Similarly, 21 reported loss. Nepal Engineering Consultancy Company reported no transaction at all during the year.
According to the report, all nine PEs under the Financial Sector category made profit during the review year. Agricultural Development Bank, Rastriya Banijya Bank, Rastriya Beema Sansthan, Deposit and Credit Guarantee Corporation, Nepal Stock Exchange, NIDC Development, Citizen Investment Trust, Hydropower Investment and Development Company and Nepal Housing and Finance earned profit in 2011/12.
Nepal Food Corporation, Civil Aviation Authority of Nepal, Nepal Transport and Go down Company, Cultural Association, Gorkhapatra Corporation and National Housing Development Company were the other PEs that made profit in 2011/12.
The report shows that total loss incurred by PEs reached Rs 3.49 billion in 2011/12, compared to profit of Rs 6.69 billion recorded a year earlier. Nepal Oil Corporation (NOC) and Nepal Electricity Authority (NEA) were the largest loss-making PEs in 2011/12. NOC and NEA reported loss of Rs 9.52 billion and Rs 9.94 billion, respectively, in 2011/12.
All seven PEs under Industry category reported loss during the review year. The government had invested Rs 5.36 billion in shares and Rs 1. 07 billion in loan in the PEs under industrial sector keeping in view rising demands from management for additional funds for subsidy, pensions and medical treatments, among other facilities.
Some PEs have also failed to conduct audit of their financial statements in time. Rastriya Beema Sansthan and Nepal Oriend Magnesite have not yet audited their financial statement for the last ten years, while Udaypur Cement, National Productivity and Economic Development Center have not get their financial statement audited for the last seven years.
“Most of the PEs have failed to come up with short term, medium term and long term reform plans while some are weak in implementation of their plans. We need clear policy to run the PEs which have become a burden on the government,” Finance Minister Shankar Prasad Koirala said, presenting the review report.
“In the absence of retirement fund, the government has to pay huge amount while paying off workers in PEs,” he added.
src republica
The Annual Review of PEs released by the Ministry of Finance (MoF) on Friday showed the government received Rs 6.26 billion in dividends, up from Rs 5.49 billion that it had received in 2010/11.
The government received only 6.11 percent returns on the investment that it made on PEs, majority of which are in red, in 2011/12. It invested Rs 102.41 billion in shares and Rs 101.23 billion in loan in the PEs until the end of the fiscal year 2011/12. Until 2010/11, its investment in shares and loan stood at Rs 92.19 billion and Rs 95.16 billion, respectively.
Political interference and growing unionization have dented competitive capacity of PEs. As a result, they are giving lower returns despite increased investment on them by the government.
The review report also states that 15 of the 37 PEs in the country made profit in 2011/12. Similarly, 21 reported loss. Nepal Engineering Consultancy Company reported no transaction at all during the year.
According to the report, all nine PEs under the Financial Sector category made profit during the review year. Agricultural Development Bank, Rastriya Banijya Bank, Rastriya Beema Sansthan, Deposit and Credit Guarantee Corporation, Nepal Stock Exchange, NIDC Development, Citizen Investment Trust, Hydropower Investment and Development Company and Nepal Housing and Finance earned profit in 2011/12.
Nepal Food Corporation, Civil Aviation Authority of Nepal, Nepal Transport and Go down Company, Cultural Association, Gorkhapatra Corporation and National Housing Development Company were the other PEs that made profit in 2011/12.
The report shows that total loss incurred by PEs reached Rs 3.49 billion in 2011/12, compared to profit of Rs 6.69 billion recorded a year earlier. Nepal Oil Corporation (NOC) and Nepal Electricity Authority (NEA) were the largest loss-making PEs in 2011/12. NOC and NEA reported loss of Rs 9.52 billion and Rs 9.94 billion, respectively, in 2011/12.
All seven PEs under Industry category reported loss during the review year. The government had invested Rs 5.36 billion in shares and Rs 1. 07 billion in loan in the PEs under industrial sector keeping in view rising demands from management for additional funds for subsidy, pensions and medical treatments, among other facilities.
Some PEs have also failed to conduct audit of their financial statements in time. Rastriya Beema Sansthan and Nepal Oriend Magnesite have not yet audited their financial statement for the last ten years, while Udaypur Cement, National Productivity and Economic Development Center have not get their financial statement audited for the last seven years.
“Most of the PEs have failed to come up with short term, medium term and long term reform plans while some are weak in implementation of their plans. We need clear policy to run the PEs which have become a burden on the government,” Finance Minister Shankar Prasad Koirala said, presenting the review report.
“In the absence of retirement fund, the government has to pay huge amount while paying off workers in PEs,” he added.
src republica
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