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| Kathmandu, Wednesday February 19, 2003 Falgun 07, 2059. |
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BSF privatisation process to
be begun
Post Report
KATHMANDU, Feb 18:In a bid to expedite
snail-paced privatization of loss-making Public Enterprise (PEs), a crucial meeting of the
Privatization Committee held today has decided to initiate the privatization process of
Birgunj Sugar Factory (BSF).
According to a source, after a lengthy
discussion, the meeting of the committee decided to put the sugar factory into the
privatization process. But, since the committee is an advisory body of the whole
privatization process of the country, the privatization process of the PEs would not be
formally initiated until a cabinet meeting approves the proposal.
The meeting discussed on the proposal of
Ministry of Industry, Commerce and Supplies (MoICS) to start the privatization process of
three loss-making PEs, namely BSF, Himal Cement Factory (HCF) and Bhaktapur Brick and
Tiles Factory (BBTF).
However, the meeting could not make any
specific decision regarding the initiation of privatization process of HCF and BBTF.
"Since the HCF was set up under the Company Act with majority share of Nepal
Industrial Development Corporation (NIDC), it is not within the jurisdiction of the
government to privatise it," said the source.
He further said that the general meeting of
the HCF should decided to close down the factory and appeal to the Office of the Company
Registrar to initiate legal procedures for the liquidation of the company. "The
meeting also urged the Ministry of Industry, Commerce and Supplies and NIDC would work in
close association to accelerate the liquidation of the HCF," added the source.
Similarly, the meeting also didn’t
discuss about the fate of Bhaktapur Brick Factory due to lack of time.
The proposal of putting the three public
enterprises into privatization process had been slightly lingered due mainly to the last
month’s wrangle between the Ministry of Finance and Ministry of Industry, Commerce
and Supplies over the issue of privatization procedures.
Minister for Commerce, Industry and Supplies
Mahesh Lal Pradhan had opposed the existing privatization procedures of selling the
state-property at a throwaway price. He had argued that the public enterprises should be
privatized only after making them financially strong and government should inject
necessary capital to revive financial health of the PEs.
However, the Finance Ministry had made it
clear that it is no more in the position to inject more capital and clear the soaring
financial liabilities and had argued that privatization is the only way to lessen the
burden. The Ministry has also said that postponing the privatization process would be
against the spirit of the liberal economy and would send wrong signal to international
community.
But, Minister Pradhan was compelled to
correct his argument after the palace urged him not to take any anti-privatization steps.
Plagued by the inefficiency and heavy
political intervention and over staffing, the state-owned BSF has been financially
bankrupt and had stopped its production long ago. A recent report had stated that the
government needs to invest some Rs 100 million in the factory to bring it to normalcy and
resume operation.
According to a government report, the factory is
yet to clear Rs 54 million to the farmers and it needs to pay Rs 15 million to the
employees as their salary and other benefits. The BSF had been employing over 1,070 people
including labourers on contract and temporary basis and the number is far higher than
actual requirement. Established 37 years ago with a sugarcane crushing capacity of one
thousand tons per day, the BSF’s capacity was later augmented to 15 thousand tons a
day.
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