Laxmi Capital News
PEs log loss of Rs 1.25 billion

Although the government has embraced thepolicy of privatization, it has been increasing its investment in publicenterprises. 

The increment in public enterprises by thegovernment goes against its principle of not pouring in fresh capital inloss-making entities. 

According to Financial Status of PublicEnterprises - 2018, the government invested fresh Rs 38 billion in publicenterprises in Fiscal Year 2016/17. Total investment of the government inpublic enterprises stood at Rs 312 billion at the end of FY2016/17, a rise of13.87 percent compared to Rs 274.75 billion a year earlier.

Although the government is increasing itsinvestment in public enterprises, it is not getting returns on its investment.Returns from these investments fell by 0.4 percent in FY2016/17 compared to ayear earlier, according to the report.

Nepal Electricity Authority, CivilAviation Authority of Nepal (CAAN) and Nepal Telecom have received a combined72 percent of the government’s total investment in public enterprises. Of itstotal investment of Rs 312 billion, these three public enterprises havereceived Rs 224.69 billion.

According to the report published by thefinance ministry on Sunday, 11 public enterprises, including Janak EducationMaterials Center (JEMC), Dairy Development Corporation (DDC), Nepal WaterSupply Corporation, Nepal Drugs Limited (NDL) and Nepal OrindMagnesite Ltd,posted a combined loss of Rs 1.25 billion in FY2016/17. Timber Corporation ofNepal Limited, National Productivity and Economic Development Center Ltd,Cultural Corporation, Nepal Television and RastriyaAwas Company Limited arelogged loss in the review year.

JEMC, Dairy Development Corporation, NepalDrinking Water Corporation and Nepal Drugs Limited have accumulated loss of Rs2.7 billion, Rs 549.9 million, Rs 1.20 billion and Rs 1.44 billion. 
According to the ministry, only a few loss-making entities have brought aboutimprovement in their management. 

A total of 26 enterprises posted acombined profit of Rs 42.68 billion in FY2016/17. Nepal Telecom, Nepal OilCorporation, Nepal Bank Limited, Rastriya Banijya Bank Limited (RBBL) andAgricultural Development Bank Limited (ADBL) were among the top earners in thereview year.

According to the report, NT earned profitof Rs 76.33 billion, while Nepal Oil Corporation profited Rs 10.88 billion.Similarly, three state-controlled commercial banks -- Nepal Bank Ltd, RBBL andADBL – have posted profit of earned Rs 2.3 billion, Rs 1.98 billion and Rs347.9 million, respectively. 

Source: MyRepublica, 28th May 2018