NTC privatization in snail's pace

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KATHMANDU, March 20 - The Cabinet has decided to privatize the Nepal Telecommunications Corporation (NTC), a state-owned enterprise, with a view to rendering it more competitive and efficient. But the process has not moved forward as it had to be.

The NTC will be converted into ‘Nepal Telecommunications Company Limited’, and will have a seven-member managing board. Five ministries including Information and Communications; Finance; Industry, Commerce and Supplies, and the Department of Information, Citizen Investment Trust and the general manager of the Corporation would be the promoters, according to its memorandum of understanding (MoU).

The decision to operate the Corporation under Company Act was taken in the last week of December 2000 as the Nepal Telecommunications Authority (NTA), a regulatory body of the telecoms services, expedited the process of granting licences to the private sector to run various telecoms services.

The NTA was established in line with the government’s liberal economic policy in order to gradually open the telecoms services to the private sector. The state-owned monopolist in the telecoms business felt the heat of competition as private operators took some share of its revenue.

But the process has come to a standstill following the decision and the NTA officials and the unionists are demanding to move forward the process in that it has been extremely difficult for the Corporation to compete with the private firms in various telecoms services.

The main problem with the Corporation is that it has to wait the government’s decision for every works, which has been hindering the actual work performance.

Raghubar Lal Shrestha, General Manager of the Corporation says that NTC is one of the greatest contributors to the revenue and lingering in the process of privatization will seriously affect the Corporation’s income and the revenue it generates.

"There has been only two meetings following the decision. The decision making usually takes a long time for a state-owned organization to privatize. But the information and communication technology is rapidly growing. Therefore, to keep abreast of the wind of the change and to face the challenges in the market, the process of transforming the Corporation into a company should be precipitated".

He said, "After operating the Corporation under the Company Act, services will be distributed as per the government decision but it will attract more investment and that too from the government. This is the first step towards privatizing the NTC."

"Following the privatization, our efficiency and the quality of service will be increased. This will create more employment opportunities. Therefore, our employees should not fear of lay-offs. We will be in a better position that the present one, I believe", said GM Shrestha.

Even if the process is forwarded immediately, it takes about two years for the Corporation to be fully privatized, given the practice, to make rules governing the service and conditions of the employees, creating more quotas and other necessary changes. In keeping all this, efforts were made for the past two years to privatize the NTC.

At present, secretary at the Ministry of Information and Communications heads managing board which has representatives from the Finance Ministry. But the decision of the board has to go through the section officer to the respective minister. Then the ministry sends directives to implement the given decision.

Tanka Shrestha, President of Employees’ Union, says whether the employees get free shares of the Corporation after it goes to private hands is most important issue and as long as the case is not decided, the uncertainty will prevail.

"During the establishment of the Corporation it was said that 24 per cent shares would be given to the public, 25 per cent to its employees and 51 per cent would remain with the government, but it has not been executed yet. Therefore, employees share issue should be finalized before the NTC is run under the Company Act", he said.

He demanded to fix pension and gratuity of employees in an amicable way and to represent the employees union in the managing board.

According to a source, property valuation of the Corporation, distribution of shares and the investment portfolio, which are some of the key issues, has been difficult to settle. Hence, consuming more time.

The government had planned to complete these works within the second week of April 2001, but is not possible now, says GM Shrestha. While approached, Secretary at the Ministry of Information and Communications, declined to speak about it.

Of the total 5,219 quotas, 4,648 people are working now. The Corporation has an installment capacity of 307,473 telephone lines and has distributed 266,890 lines and has 283,482 people in the waiting list.

Of the total targetted revenue of Rs 3,989,932,000, the Corporation has collected Rs 1,475,379,942 by November 15, 2000.

Lack of implementation hindering liberalization policy

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KATHMANDU, March 20 - Over a decade has passed since the government adopted open market and liberalization policies. However, lack of proper commitment towards implementation of policies, rampant corruption, social and business insecurity, and improper co-ordination between government and private agencies, among a host of other factors, has marred the overall performance of the Nepalese economy, say experts.

In addition, with Nepal poised to join the World Trade Organization (WTO) in the near future, experts expressed their apprehension about Nepal’s survival in the global market. They were speaking at a one-day National Symposium on Trade and Investment, organised by Institute for Development Studies (IfDS) in the capital here today, in which over 50 participants took part.

The objectives of the symposium were to help develop policies for increasing both domestic investment and Foreign Direct Investment (FDI), increasing foreign trade, and prioritising national plans and policies for the achievement of the long-term national goals.

Expressing concern over the country’s dissatisfying economic performance in the post liberalization era, experts strongly urged upon the importance of exports diversification, law and order maintenance, creation of an investment-friendly environment, good corporate governance, and the need for government to sincerely push forward with its liberalization policies, among others.

Speaking on the occasion, Madhav Kumar Nepal, General Secretary of Communist Party of Nepal - United Marxist Leninist (CPN-UML), said that increasing foreign trade and foreign direct investment, in the context of globalisation, is of paramount importance. He emphasised that industrialisation, exports diversification and privatisation are important for sustained economic growth.

Similarly, Surya Bahadur Thapa, president of the Rastriya Prajatantra Party (RPP), said that improper implementation of Five-Year Plans, in addition to low rate of projects completion, has pulled back the rate of growth. He said, with the country’s agriculture sector at the mercy of monsoons, declining agro-productivity, weak competitiveness of domestic industries and inadequate homework for acceding to the WTO, the economy is not in proper health.

However, despite agreeing to the problems that the economy presently is beset with, Dr Shankar Sharma, member of the National Planning Commission (NPC), said that much has been achieved in the past decade. Justifying his arguments with some of the indicators of economic progress in the past decade, he said lower tariff regime, fiscal and non-fiscal incentives to business, and reduction of transportation costs through increased transportation network in the past decade, among others, has helped the economy climb.

However, he asserted that weaknesses like those in the regulatory mechanisms, civil services and manufacturing sectors have brought rigidity in economic expansion. "There is a need to probe as to how more FDI can be attracted into Nepal, with India’s recent budget opening up its labour markets," he also said.

Expressing his concern over the health of the country’s banking system, Deependra Purush Dhakal, Governor of the Nepal Rastra Bank (NRB), said that the central bank’s highest priority is to reform the two ailing banks, namely, the Rastriya Banijya Bank and Nepal Bank Limited. "The failure of the financial and the banking systems directly affect trade and investment. Nepal can achieve growths of 8 per cent, instead of 6 per cent, if the reforms are properly carried out," he said.

Hotel workers appeal ILO to pressurize govt

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KATHMANDU, March 20 - Central Joint Struggle Committee (CJSC) of hotel workers has formally appealed to the International Labour Organization (ILO) to pressurize the government to roll back its decision to impose Essential Service Operation Act (ESOA) banning strikes on hotel industry.

A CJSC letter jointly addressed to the Director General of ILO-Headquarters, ILO-ACTRAV and the Chairperson of the concerned ILO Committee, Geneva through ILO-Kathmandu office has asked ILO to perceive the "anti-democratic decision" seriously and raise question to HMG of Nepal.

"We also like to request for the inclusion of the case in concerned ILO Committee before the ILO Conference of the year 2001 and question the government on its position on ratified ILO Convention NO. 98 & 144 in order to create pressure to withdraw the anti-democratic decision" said a press release issued by the CJSC here on Tuesday.

CJSC in its letter has claimed that the government decision of being against the fundamental human rights and against the spirit of the Constitution of Kingdom of Nepal 1990, the release said, adding, "it has violated letter and spirit of Nepal Labor Law and the ratified and unratified core conventions of ILO as well."

Referring to the whole genesis of service charge row before imposition of the ESOA, the letter submitted Tuesday entitled "Violation of Trade Union Rights by HMG-Nepal" has blamed the government for being in favor of the employers and acted against the trade union rights of the hotel workers.

Likewise, a CJSC delegation met chairman of National Human Right Commission, Nayan Bahadur Khatri, and explained him about the violation of human rights by the government deceision, Tuesday.

As a part of CJSC initiative to restore the workers’ rights to strike, the release saod, "We have started to raise the issue into the international arena and the letter to the ILO-Kathmmandu office is a part of it."

Director of ILO-Kathmandu, Leyla Tegmo-Reddy, has assured us that the letter submitted would be sent to ILO-Geneva and exprerssed her readyness to work towards finding amicable solutions through dialouges, the release added.

UNCTAD and EU reach agreement

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KATHMANDU, March 20 - United Nations Conference on Trade and Development (UNCTAD) and the European Union (EU) signed an agreement on arrangements for the Third United Nations Conference on the Least Developed Countries, to be held in Brussels from May 14 to 20.

According to a press release received here today, the agreement was signed by Rubens Ricupero, Secretary-General of UNCTAD, and Poul Neilson, the European Commissioner in Charge of Development and Humanitarian Aid, on their respective behalf.

The Agreement establishes the terms and conditions for the organization of the Conference. It provides a grant of US$4.1 million to the UNCTAD Trust Fund for the least developed countries (LDCs). The funds will be used to organize the Conference and its parallel events, including a meeting of Parliamentarians, women entrepreneurs forum, NGO forum, meeting of mayors and young entrepreneurs forum, the release states.

This is the first time that the European Union is hosting a UN conference. Commission President Romano Prodi and UN Secretary-General Kofi Annan have expressed the commitment of their respective organizations to cooperate to the utmost in making the conference a significant and positive event for the future of the world’s 49 poorest countries. The LDCs’ total population comprises some 700 million inhabitants, with an average GDP per capita of $320, says the release.

In order to ensure a successful conference, logistical arrangements are under way and the European Union has already undertaken a number of substantive commitments. These include opening its market fully to the LDCs for all products except arms and an action plan to combat transmissible diseases. At the Conference itself, it is hoped that other concrete commitments can be agreed that will help LDCs revitalize their growth and development. 40 of the 49 LDCs are also members of the African-Caribbean-Pacific Group (ACP countries). ACP members have a special Partnership Agreement with the EU, among others, includes preferential treatment for the LDCs, the release concludes.