E-Kantipur

KATHMANDU, JAN 28 -

The government has reiterated its plan to bring a strategic partner for Nepal Telecom in the Good Governance Plan following lack of progress on this front. The scheme unveiled on Thursday has set an ambitious six-month deadline to finalise a strategic partnership deal for NT.

This is not the first time such a commitment has come from the government’s side. It’s already been two years that the high-level committee advised the government to invite a strategic partner for NT. Subsequently, the government had initiated work to divest 26-30 percent of its stake in NT to a strategic partner.

Shreedhar Gautam, secretary at the Ministry of Information and Communications, said that since the same working procedure would make it difficult to the company to work in a competitive environment, the strategic partner had become a must. Gautam, who is also chairman of the NT board, said, “It will be easy to select a partner after an amendment to the Public Procurement Act, regarding which work has already started.”

NT senior officials said Thursday’s announcement has opened the way for their long planned strategy to work with an international partner to build a good team and provide better services to its customers. However, if the last two years are any indication, it will not be all smooth sailing.

The Privatisation Committee of the Ministry of Finance (MoF) had formed the Privatisation Study and Consultation Sub-Committee of the Privatisation Committee headed by lawmaker Hari Rokka in May 2010. But little progress has been made over a strategic partner for NT.

Rokka now says inviting a strategic partner is not the only solution to help move the state-owned telecom company forward along with technological development and competition. “There should be an amendment to the Public Procurement Act,” said Rokka. “Once the amendment is done, we can either bring a strategic partner or NT itself can invite a management partner.”

According to Rokka, even after giving 26-30 percent of the shares to the strategic partner, the government will still have a majority stake in NT, and that will require it to follow the Public Procurement Act. “Hence, bringing in a strategic partner without amending the procurement act will not make much difference,” added Rokka.

Senior NT officials have been complaining that the company has been losing its market share to competitors as the state-owned telecom utility has to adhere to government rules and regulations including the Public Procurement Act when it comes to implementing new projects. This, according to top NT officials, makes the whole process lengthy and cumbersome in comparison to private telecom companies that can start new projects immediately. In the last two years, NT has not been able to expedite its infrastructure expansion plans due to political interference and hurdles in the procurement act.

With increasing competition in the telecom sector, there has been growing demand of late to find a strategic partner for NT. Telecom experts say divestment of NT makes better sense given the aggressive expansion of private telecom operators. With private operator Ncell expanding its operations aggressively, there is growing concern whether NT, till now the best performing PE, would go the way of Nepal Airlines Corporation and Nepal Oil Corporation.

NT itself is keen to have a strategic partner. NT Managing Director Amar Nath Singh had stressed the need for a strategic partner at a meeting of the parliamentary Public Accounts Committee in December 2010. NT is primarily pushing for the strategic partner plan to get around the hurdles posed by the Public Procurement Act, make procurement smoother and faster and free the company from political interference.

Apart from the strategic partner issue, the government’s good governance plan has also talked about NT’s various projects, procurement system and services. Mobile service will be provided on demand for the next two years by procuring 10 million additional lines in the GSM mobile service segment, as per the plan.

The plan has also mentioned implementing e-bidding system for procuring goods and services and maintaining 12-hour battery back-up at all base transcriber stations in the Kathmandu valley for quality service during load-shedding hours.

Posted on: 2012-01-28 09:20

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