Monday, December 07, 2009

Nepal: Nepal ready to dump nearly two-decade long privatization policy

FOCUS Information Agency - Nepali government is mulling over abandoning nearly two-decade long privatization policy of selling out state-owned assets to private parties and adopting a policy of gradual disinvestment of equity of Public Enterprises (PEs), Xinhua News Agency informed.

An official at the Ministry of Finance told that the cabinet meeting held recently formed a high-level committee led by the Finance Minister to recommend new policy to liquidate non-functioning state-owned businesses.

Five ministers representing ministries of Commerce and Supplies, Forest and Soil Conservation, Law and Justice, Industry and Agriculture and Cooperatives are the members of the committee that is expected to submit its final report by mid-January.

The government has reached the conclusion that the present policy of privatization is not workable given that fact that privatization is not politically popular among all the major political parties.

In addition, the poor performances of the PEs that were privatized during first-half of the 1990s also greatly weakened the pro-privatization arguments, said the officials.

The committee that will have finance secretary as the member secretary will first thoroughly review the present status of 36 government enterprises to find out how many of them can be brought into operation by enhancing their competitiveness.

"The committee will then find out the PEs that the state should run even if they are financially not profitable from among the Pes that can be brought into operation," the official added.

"The committee will recommend the government to initiate the process of dissolving and deregistering of the PEs falling into the category by settling all outstanding financial liabilities," the official added.

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