Cabinet decides to privatise 4 public enterprises

By Bhaskar Sharma

KATHMANDU, Dec 2 : At a time when aid agencies are lamenting over the slow pace of privatisation of state-owned enterprises in Nepal, the government has decided to begin the privatisation of four major public sector entities.

The Cabinet took the decision on Friday to embark upon the privatisation of Nepal Transport Corporation (NTC), Sajha Yatayat, Cottage Industries and Handicrafts Emporium (CIHE) and Nepal Oriental and Magnesite Pvt. Ltd. (NOMPL), according to a high-level source at the Ministry of Finance.

He said that all employees would be laid off before putting the enterprises into private hands. This means that over 1300 employees in the three entities, apart from NTC, would lose their jobs. The book on targets and performance of public enterprises, published by the Ministry of Finance this year, contains no data relating to NTC.

The employees to be laid off in all the PSEs would be compensated as per the rules of their respective enterprises, the source said. He added that donor communities are likely to extend financial support for clearing the outstanding payment to the employees.

Asked to comment upon the latest decision, Finance Minister Dr Ram Sharan Mahat, talking to The Kathmandu Post, said, "The government is financially burdened, and the latest decision to privatise the financially inept enterprises was taken to reduce the burden," he said.

All the four enterprises are financially in doldrums, a result mainly of frequent strikes arising out of the non-clearance of the payment to workers. While Sajha Yatayat is running into losses of Rs 1.5 million per month, NOMPL, presently closed, and CIHE incurred net losses of Rs 80.7 million and Rs 7.8 million in the last fiscal year. As per available data, the government has invested Rs 22.6 million in CIHE and Rs 82.5 million in NOMBL. The outstanding loan for NOMBL alone stands at around Rs 585 million.

The source said that the government is gearing to speed up the privatisation process to address concerns of international donor and aid agencies which have time and again lamented the slow pace of privatisation. The sharpest criticism has come from the Department for International Development (DFID), the British government owned agency that is aiding Nepal in its privatisation endeavours.

Though the government was carrying out homework to initiate the privatisation of various PSEs for the past few months, the latest decision to privatise the four enterprises comes shortly after the declaration of a state of emergency early last week. Experts view that such decision at this juncture may have been taken in the hopes that employees would not protest the decision. Any kind of disruptive activities or demonstrations are banned under the state of emergency.

This is one of the rare times since the Nepali Congress government opted for privatisation in 1992 that the Cabinet decided to lay off all the workers of any public enterprises before the handing over the industry to a private party. The government’s decision to lay off workers stems from bitter past experience when many such privatisation resulted in massive lay-off after the hand-over.

The government realised the need to relieve workers to ensure that the enterprise runs smoothly in private hands. "Hence it was decided to completely close the PSEs before its privatisation," said the source.

The government early this year had decided to close down the financially troubled Hetauda Textiles Industry by laying off more than a thousand workers. The government also had decided to compensate the employees for which it allocated Rs 25 million.

Privatisation has remained a messy business ever since the government began its ambitious reform program. During the last eight years, 16 PSEs have been sold to private parties, but not without controversy. The privatisation of non-performing PSEs has featured as one of the major agendas of Nepal’s economic reform and has been tied up by number of bilateral and multilateral donor agencies to their lending.

43 PSEs continue to fare hopelessly in their businesses. Barring NTC, Hetauda Textile Industry, Rastriya Beema Sansthan and Bhaktapur Brick and Tiles Factory, the government has invested Rs 17.94 billion rupees in shares and Rs 53.39 billion in loans. Out of the investment in shares, the government has received returns of only 0.24 per cent. And the average return for PSEs on capital investment is just 0.55 per cent.

No word of Maoist leaders’ death, says PM

Post Report

KATHMANDU, Dec 2 – Prime Minister Sher Bahadur Deuba on Sunday denied knowing anything about the rumoured deaths of some senior politburo members of the underground Communist Party of Nepal (Maoist).

At a meet-the-press programme today in the capital, the Prime Minister was asked whether Ram Bahadur Thapa (alias Badal), the Maoist military strategist, and Krishna Bahadur Mahara, the chief Maoist negotiator in the failed peace talks with the government, were killed along with others in army operations in Rolpa district over the weekend.

Deuba replied: "I do not know anything officially" about it.

Meanwhile, the Prime Minister took the opportunity to again reiterate why the government had imposed the state of emergency last week. He said the Maoists had compelled the government to do so. PM Deuba accused the Maoists of betrayal when the government was sincerely trying to solve the Maoist problem through dialogue.

"We were compelled (by the Maoist terrorists) to use the army, promulgate the ordinance (on terrorism) and declare the State of Emergency." The PM added that these steps were "aimed at terrorists and those individuals and organisations who support them."

The Prime Minister did not set a time frame for the army operation to end, but he said that the operation was so far successful. He also added that the army men were not facing any difficulty in the ground offensive.

He assured the media that the government would try utmost to make available the information about the army and police operation against the Maoists. He also thanked them, the public and the international community for supporting the government cause.

Both the PM and the Minister for Information and Communications Jayaprakash Prasad Gupta assured the media that steps were being taken to provide information to the media from a single source.

Anti-rebel campaign intensifies

Post Report

KATHMANDU, Dec 2 – The Royal Nepal Army (RNA) is continuing to intensify the anti-Maoist operations in the Maoist stronghold areas across the country.

The army opened fire at a terrorist camp in Doramba forest in Ramechhap district Saturday leaving heavy casualties on the Maoist side as it stepped up aerial attacks, said a press release issued here today by the Defense Ministry.

In another major development in the mid-western hill district of Rolpa, the army successfully recovered a large cache of arms and ammunition that were siphoned by the terrorists last week in a daring raid on an army barrack in Dang district. The army personnel recovered the ammunitions in Dahabha area, the statement said.

The army went into full-fledge operation to hunt down the terrorists after the latter attacked the Dang-based army barrack killing several security personnel and capturing weapons and ammunition in late November.

In Ramechhap, the army is believed to have attacked a large number of Maoist terrorists holed up in Doramba forest, according to the press statement. The release also said that the army has been able to thwart the Maoist attempt to attack the amrymen stationed at the Sunkosi Hydroelectric Project in Sindhupalchok district on Saturday.

Meanwhile, the army and policemen deployed as part of the "Cordon and Search Operation" (CSO) in the western hills have been able to seize explosives, grenade, and socket bombs from the terrorists in Tinpiple area in Lamjung district on Saturday, the release adds.

In the capital city, an army bomb disposal squad successfully defused a bomb planted in Nayatole area of Lailtpur district Saturday.

Likewise, the Chairman of Chipur Village Development Committee (VDC), Dadeldhura, who was severely injured by the Maoist terrorists was airlifted by to the district headquarters by an army helicopter for medical treatment, the release has said.

Meanwhile, the Home Ministry said in a press statement that 42 Maoist terrorists in Sakhuwasabha district have surrendered before the District Administration Office.

In other developments, the fate of top rebel leaders Krishna Bahadur Mahara and Ram Bahadur Thapa, who is also known as "Comrade Badal", is still unclear. While it has been confirmed by various government sources that the duo were among those trapped in an army operation in the jungles of Rolpa over the weekend, it is still not certain whether they have been captured or killed. Several newspapers have already reported that Mahara has been killed, but the Defense Ministry and Home Ministry have still not confirmed the reports.

Schools closed by rebels to re-open

KATHMANDU, Dec 2 (PR) – Hundreds of private schools across the country which had closed down for a whole academic year due to a flare up in Maoist violence, is set to re-open the next academic session, said the Private and Boarding School Organisation Nepal (PABSON) here today.

PABSON President Rajesh Khadka told The Kathmandu Post that the present state of emergency in the country has created a stable and secure condition for the re-opening of some 500 private schools mostly in the western and mid-western districts. These schools had to be closed down earlier this year due to the pressure brought on them by the Maoists who accused the schools of being too elitist. PABSON officials said that the parents are now upbeat about sending their wards back to the schools in the next academic session, which begins from April.

However, some teachers’ associations would neither confirm nor dismiss the PABSON claim. "Most village schools are in a bad state. Besides security problems, there are a host of other factors which will not help in the reopening of these schools," said Ramakanta Sapkota, General Secretary of Nepal National Teachers’ Association (NNTA). "This is too early to say when the schools will start functioning again, but they won’t be closed for too long," said teacher Sapkota.

Army action too late: Former army chief

Post Report

KATHMANDU, Dec 2 – Former Chief of the Army Staff (COAS) Sachit SJB Rana today said the Royal Nepal Army (RNA) should have been mobilised earlier against the Maoists so that the number of casualties could have been remarkably reduced.

"The government should have mobilised the RNA against the Maoist terrorists some time earlier," said Rana, adding, "But it could not materialise due to the government’s apathy towards the fulfilment of necessary conditions prior to the army deployment." The former army chief was speaking at a talk programme organised by the Reporter’s Club in the capital.

Last week, the government began deploying the RNA against the Maoists declaring them as terrorists. The Maoists have been waging a violent "People’s War" demanding a republican state since the last six years which so far has claimed more than 2,000 lives.

"But this time, the government fulfilled the necessary pre-conditions and the army has been summoned," said Rana.

Speaking from the same forum, Finance Minister Dr Ram Sharan Mahat said, "Had the government mobilised the army some time earlier, there could have been less casualties."

He also said the government has diverted some of the development expenditure to address the security concerns. "We will meet the financial need by taking internal loans and by withdrawing the low-priority projects," he said.

According to Rana, the army was all set to be mobilised a "few" years ago but the idea was later aborted as the government could not provide the army with around Rs 700 million, as also 3-4 helicopters.

Moreover, former army chief Rana said the most important reason behind the RNA not being mobilised before, was the lack of an all-party consensus and there were high chances of dragging the army into a controversy.

"Five months ago, the army could not be used in Nuwagaon just because no written order came from the (Defence) Ministry," said Rana. He also urged the government to seal off the border with India to effectively counter the Maoist terrorists in Nepal. "The RNA also needs to be provided with 5-0-5 rifles and night vision weapons including 3-4 helicopters."

The foreign countries have hailed the government move of declaring a State of Emergency and some of them have already committed to grant assistance to the government.