Economy, Market Watch

MoF seeks concept paper to divest shares of 8 PEs

Published by Octron on April 20, 2010

In a bid to divest shares of eight loss-making Public Enterprises (PEs), the Ministry of Finance (MoF) has asked concerned ministries to forward their concept papers along with their financial position to its Privatization Committee.

Tanka Mani Sharma, joint secretary at MoF, told myrepublica.com that they had sent letters to concerned ministries, asking them to furnish their concept papers along with their formal views on the modality of divesting shares.

About two weeks ago, the Privatization Committee of MoF had selected Dairy Development Corporation (DDC), Herbs Production and Processing Company Ltd (HPPCL), Hetauda Cement Factory (HCF), Nepal Drugs Ltd (NDL), National Seed Company Ltd (NSCL), National Trading Ltd (NTL), Gorkhapatra Corporation (GC) and Agriculture Input Company Ltd (AICL) to offer their shares to the public.

The government´s fresh initiative comes at a time when burden on the government is mounting due to burgeoning loss posted by ailing PEs because of ineffective management, overstaffing and eroding competitive power among others.

Through the budget speech for 2009/10 fiscal year, the government had announced the policy for effective implementation of divestment of stake in ailing PEs to increase people´s ownership through open sales of shares.

Sharma said the PEs have been selected keeping in view their relation with the people at grassroots level. He said the government hopes to increase ownership of people at grassroots level on those enterprises through divestment of shares. The government is mulling over transferring shares of these PEs to community organizations like farmers groups, community forest user groups and dairy producers´ co-operatives among others.

Among the PEs selected for divestment, DDC, HPPCL, AICL and GC had suffered losses during the fiscal year 2007/08. Similarly, revised estimate showed losses in DDC, HPPCL, HCL, AICL and GC where as all PEs except HPPCL had set targets to earn profits.

PEs selected for divestment

1. Dairy Development Corporation (DDC)
2. Herbs Production and Processing Company Ltd (HPPCL)
3. Hetauda Cement Factory (HCF)
4. Nepal Drug Ltd (NDL), National Seed Company Ltd (NSCL)
5. National Trading Ltd (NTL)
6. National Seed Company Ltd (NSCL)
7. Gorkhapatra Corporation (GC)
8. Agriculture Inputs Company Ltd (AICL)

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