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Kathmandu Wednesday March 21, 2001 Chaitra 08, 2057.
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NTC privatization in snail's pace
Post Report
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.
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