More transparency on privatization stressed

By a Post Reporter

KATHMANDU, March 20 - An independent review of the privatization programme in Nepal funded by British development agency Department for International Development (DFID) has pointed out a number of weaknesses, in the process, ironically the report itself is not free from flaws.

The report has pointed out anomalies in the political commitment, process and procedures and transparency of privatization process.

Citing the commentators, the report says, “The following concerns were expressed: past privatization transactions have been unsuccessful; there is no transparency or accountability of process; there is influence of vested interests; allegations of corruption and financial irregularities; no accountability in the utilization of proceeds and the interests of workers have not been protected.”    

Privatization experience in Nepal and internationally suggests that the “no redundancy” policy for employees contributes to the failure of privatized enterprises. “From the review team’s discussions with stakeholders, employees may be prepared to take early retirement given adequate compensation.”

The report has also raised question regarding the validity of present use of proceeds from privatization. “As a general rule, the net proceeds from privatization (after financing the costs arising from the transaction and any liabilities) should not be utilized in the regular budget as these proceeds are generated from one-off transactions.”

Privatization proceeds should be used firstly on the activities which strengthen privatization, and then for infrastructure or contributions to economic or social development.

The report has slapped government a serious allegation on the area of transparency. “Although the Privatization Act provides the minimum requirements for transparency, it is clear from the interviews that the government has not been successful in the dissemination of information about the programme.”

The report says criticisms ranged from withheld of information to strong accusation based on corrupt behaviour and financial irregularities.  

The report has also dismissed the claim of a similar report prepared by the Privatization Cell, Ministry of Finance some months back. In its report, “ Monitoring Privatized Enterprises,” the Cell had said, “privatized enterprises are performing better than they did under government.”

The report has claimed out of ten major privatized enterprises, “nine have increased investment, six have increased production, seven have increased sales and five have increased profits.”

Present report says, “…the individual analyses of those enterprises demonstrate that almost every enterprise is experiencing financial difficulty.” The report has, however, failed to deliberate which of the former public enterprises, industries mentioned in the Ministry’s report are reeling under financial difficulty.

The report is flawed especially in its understanding of the role of the Privatization Committee.  “…the Committee rarely meets and therefore the Cell directly submits decision to the Minister of Finance for presentation to the Cabinet. The line ministries have also stated that they are not involved in the process from the outset and often have to implement decisions enforced from the Ministry of Finance”.

Privatization Act 1994 has made it mandatory that any transactions regarding privatization of public enterprises should go through the Privatization Committee and this provision has not been violated by any government in the past. Similarly, the presence of the secretary of the concerned ministry has been made compulsory for any decision regarding privatization. Thus the report’s allegation that the line ministry is neglected in the privatization process seems overexerted.

Reforms in Cooperative Act 1992 necessary: Experts 

By a Post Reporter

KATHMANDU, March 20 - Financial experts have stressed on the need to reform Cooperative Act 1992 to consolidate the cooperative sector.

The view was expressed by a group of experts involved in cooperatives at a function on “Weaknesses on Cooperative Act -1992 and Challenges facing the Cooperative Movement in the Country”, organized by Nepal Federation of Savings and Credit Cooperative Unions Limited (NFSCCUL) Sunday.

Addressing the two-day long workshop, Governor of the Nepal Rastra Bank Dr Tilak Rawal said that the Bank is intensifying its monitoring and supervision to maintain the discipline in the financial sector. He urged savings and cooperative institutions for healthy competition. The time has come for big banks as well to open cooperative institutions in remote villages country to benefit the rural populace thus helping them to generate incomes.

Though, Dr Rawal said that cooperative banks are not functioning well. So there is a need to make these banks efficient and sustainable for long run financial growth, he added.

He asked financial experts’ cooperation in financial sector policy making that would help to amend acts as per the need of the markets.

Chairman with NFSCCUL Kailash Bhakta Pradhananga said there is a difference between saving and credits cooperative institutions and other cooperative institutions. The number of Savings and Credit Cooperative Institutions in all 14 zones has spread in 45 districts of the country which he termed cooperatives Unions as people’s bank.

General Secretary with Nepal Saving and Central Credit Cooperatives Association Limited Rishi Raj Ghimire stressed on the need to remove anomalies in the present act.

Presenting a paper on the role of Savings and Credit Cooperatives for national economy and NRB’s perception towards cooperatives, Deputy Governor Ram Babu Pant, said that cooperative institutions play an important role collecting more funds and utilize them for generating employment.

Pant also urged for timely reforms in Cooperative Acts 1992 for effective operation of savings and cooperatives institutions.

Member Secretary of National Cooperative Development Board Ramchandra Nainabasti, presenting a paper on challenges of cooperative movement and the role of National Cooperative Development Board stressed on wiping out the existing anomalies in the cooperative sector for poverty reduction in the country.

He underlined the need for establishing cooperative banks, institutional and development of rural markets among others for smooth progress of the cooperative sector.

Chairman with National Cooperative Association Deepak Prakash Baskota mentioned that the association is taking initiatives to reform cooperative acts as well as setting up cooperative schools and universities among others.

REDP receives Energy Globe Award 2000

By a Post Reporter

KATHMANDU, March 20 - Rural Energy Development Programme (REDP), under United Nations Development Programme (UNDP), has been awarded with the ‘Energy Globe Award 2000’ at Linz, Austria recently.

The award was given to REDP for its accomplishments in the field of promoting rural renewable energy technologies in Nepal.

The award, instituted by Energiesparverband, Austria, is given to honour projects and initiatives around the world in the field of energy efficiency and renewable energy sources.

Given in four categories - commercial sector, housing, campaigns and public investment - REDP stood second in the public investment category among 900 projects in all categories from 72 countries.

The information was given today at a Memorandum of Understanding (MoU) signing programme, between REDP and University of Flensburg, Germany, under their degree course on ‘Sustainable Energy System and Management’ (SESAM) for academic collaboration.

The concept of SESAM is oriented towards the requirement of rural development with a focus on the design, extension of appropriate technologies as well as the renewable energy sources and management of projects, it was mentioned in the signing programme.

Signing the MoU on behalf of REDP, Resident Representative of UNDP Dr Henning Karcher said, “The memorandum has been signed for broad- based and holistic development, for which partnership approach is necessary.”

The MoU will help to undertake capacity-building activities jointly, he added.

Similarly, signing the MoU on behalf of the German University, Prof. Uwe Rehling said, “This agreement will help to foster intercontinental academic and technical exchange in the area of mutual interest.”

He informed that SESAM would help REDP in building capacity and skills and added that it would provide professional expertise.

REDP, which was implemented from August 1996, is presently working in more than 70 VDCs of 10 hilly districts of Baitadi, Dadeldhura, Achham, Baglung, Myagdi, Parbat, Tanahun, Dolkha, Sindhupalchowk and Kavrepalanchok.

NRF organizes interaction

By a Post Reporter

KATHMANDU, March 20 - With a view to render its activities more effective Nepal Rugmark Foundation (NRF), a non-governmental organization   organized a daylong interaction programme with its licencees Saturday.

Speaking as a chief guest, A G Sherpa, chairman of Central Carpet Industries Association (CCIA) said the activities being carried out by Nepal Rugmark Foundation is laudable and asked the foundation to further expand its working field by reaching to working places related to carpet industry. He said as CCIA is also committed to end child labour and promote carpet export, CCIA and NRF could work jointly and contribute to the welfare of the children involved in the carpet factories.

Gradually, as the carpet manufacturers are realizing the need of rehabilitation works, some of them have opened day care centres for the children of their weavers. CCIA too has set up a day care centre for the children of the carpet workers in Bhaktapur with the financial support of GTZ, a German development agency. We are going to open 10 more centres at different places of the country in near future, Sherpa added.

Keshav Bhakta Mathema, General Secretary of NRF said the principal job of Rugmark is to monitor carpet factories whether child labour is involved in the sector and if involved to rescue them. Carpet manufacturers can help us a lot in this regard by not employing children in the sector.

Dattatraya Roy, UNICEF representative expressed hope that Rugmark would play a vital role in ending child labour from the carpet sector and requested all the concerned sectors to make concerted efforts for the same.

Speaking on the occasion, Naresh Sharma, representative of GTZ warned that since Nepal is going to acquire the WTO membership in the near future, we should eradicate child labour as it is one of the prime concern of the world trade regime. He also pointed out the need for reviewing working procedures of the CCIA and the NRF. Requesting NRF licencees to take the membership of the organization, Sharma said Rugmark needs more partners for its better performance.

Saroj Rai, Executive Director of NRF, Programme Officers Narayan Prasad Bhattarai and Deepa Regmi and Account Officer Dasharath Uprety presented different papers at the interaction programme. Participating in the interaction, Sulochana Shrestha immediate past president (IPP) suggested to carry out welfare programmes for the children of the weavers at various carpet factories.

It was informed that child labour has been contained to 50 percent at carpet factories and the involvement of child labour declining.

Nepal Rugmark Foundation has raised its number of licencees to 100 to date but its membership stands at 25 only. The foundation has inspected 350 carpet factories and has rescued 360 children and it has been providing education to 200 children at its four rehabilitation centres located at different places.

Shares
Nepal Stock Exchange
Singhadurbar Plaza, Kathmandu

20 March, 2000

               Trading Information                                   Trading Price                              

Paid-up value of S. N. 7   is 57.
Paid-up value of S. No. 8   is 10.
Paid-up value of S. No. 16  is 60.
Paid-up value of S. No.  15   is 50.
NEPSE Index : 318.54 (-0.12) Base : 12th.   Feb, 1994 = 100