Kathmandu, July 1: The government has accelerated efforts to privatize four long-defunct public enterprises—Janakpur Cigarette Factory, Butwal Yarn Factory, Nepal Metal Company, and Nepal Orind and Magnesite Company.

The Ministry of Finance (MoF) has invited applications to hire consultants for property valuation, marking a key step toward privatization. “We’ve begun the asset valuation process as the first phase,” an MoF official said.

A high-level economic advisory panel, led by former finance secretary Rameshwore Khanal, has also urged the government to scrap five non-performing enterprises, calling them a financial burden. Of the 44 public enterprises currently in existence, 15 are running at a loss and three remain inactive. Despite investing over Rs 615 billion in these entities, government returns have been dismal.

A public notice from the MoF set the submission deadline for Janakpur Cigarette Factory bids on July 7, while EOIs for the other three entities are due July 11.

Last month, the cabinet approved asset management plans for seven PEs, including Gorakhkali Rubber Udyog, Udayapur Cement, and Hetauda Cement. The new fiscal budget has endorsed this decision.

Following criticism of the privatization push under a revised law, the government has rebranded the process as “asset management.” Still, the recently passed Privatization Bill (First Amendment) Ordinance 2081 allows for public share offerings, mergers, or liquidation based on need.

Among the four targeted enterprises, Janakpur Cigarette Factory has been idle for 14 years and carries a cumulative loss of Rs 2.92 billion. Nepal Orind and Magnesite Company has lost Rs 5.03 billion and owes Rs 2.4 billion to the state. Butwal Yarn Factory, closed for over 15 years, has racked up over Rs 2 billion in losses. Nepal Metal Company holds Rs 178.3 million in net assets but owes Rs 920 million in government loans.

Nepal’s privatization journey began in the early 1990s under liberalization. But its results have been mixed. A 2018 white paper by then Finance Minister Yubaraj Khatiwada bluntly stated: “Privatized firms failed to meet expectations. They didn’t improve services or employment, and the state gained little in return.”

People’s News Monitoring Service