E-Kantipur

SEP 18 - From now on, chiefs of all six public enterprises (PEs) under the Ministry of Finance (MoF) will be appointed through free competition.

Finance Minister Barsha Man Pun made such a commitment at the parliamentary Public Accounts Committee (PAC) meeting on Saturday. Pun’s commitment has come at a time when pressure is being exerted on the government to appoint PE chiefs through free competition.

“The state of PEs is miserable,” said Pun at the meeting where Chief Secretary, Finance Secretary and Industry Secretary were also present. “Most of the studies on PEs have shown that the crux of the problem is political interference. Therefore, I will appoint the chiefs of PEs under MoF through free competition and there will not be political intervention at any level.”

Pun said he will also make efforts for appointment of chiefs of all other PEs through free competition. “I will work on this front even amending the act through Cabinet,” said Pun.

Amid increasing dependency of PEs on government resources, successive governments have been trying to find a way out to reform PEs, often touted as white elephants. However, the irony is that the government hasn’t been able to implement suggestions forwarded by commissions formed to reform PEs.

Of late, appointment of PE chiefs through free competition is being initiated as one of the administrative reform measures. “The Finance Ministry is making this move to hand over

the management of PEs to competent people,” said Pun. “Those who are selected through competition can play an important role in managing PEs.”

Pun admitted that political leaders are responsible for the miserable state of PEs. He also questioned the role of trade unions in PEs. Stating that trade unions have not played a constructive role, Pun said, “Making trade unions responsible is political parties’ job.”

Increasing political interference, over staffing and inefficiency has turned PEs in to loss making entities. An annual performance review of PEs carried out by the Finance Ministry shows that 22 of the 36 PEs registered profits in fiscal year 2009-10. And, there is a danger that even PEs making profits might face challenging times. One prime example is Nepal Telecom that is currently struggling to compete with telecom companies from the private sector.

There are six PEs under the Finance Ministry—Agriculture Development Bank Nepal (ADBN), Rastriya Beema Sansthan (RBS), Rastriya Banijya Bank (RBB), Nepal Stock Exchange (Nepse), Citizens Investment Trust CIT) and Deposit & Credit Guarantee Corporation (DCGC).

PEs, which are under the Finance Ministry, are comparatively better than those under other ministries. However, they have their own set of problems. RBB is yet to appoint its new chief executive officer while ADBN CEO Shyam Singh Pandey resigned following agitation from staffers.

The Industry Ministry has the highest numbers of PEs. According to Industry Secretary Shankar Koirala, of the 12 PEs under the ministry, only six are currently in operation. “Four have completely closed, while other two are temporarily suspended,” said Koirala.

According to Koirala, the government’s policy on PEs that keeps on changing with every successive government is itself a problem.

Posted on: 2011-09-18 08:45

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