Spread the love

Kathmandu, Dec 7: The government’s total investment in public enterprises (PEs) has reached Rs 930.88 billion by the end of fiscal year 2024/25, yet returns remain weak, according to the Public Debt Management Office (PDMO).

The PDMO’s Annual Report on Share and Loan Investment shows that the figure includes both equity and loans extended to 159 state-owned entities. Equity in 116 PEs totals Rs 404.81 billion, with major stakes in Nepal Electricity Authority (NEA), Civil Aviation Authority of Nepal (CAAN), Nepal Telecom, Rastriya Banijya Bank, and Agricultural Development Bank. Loan exposure stands at Rs 526.06 billion, including Rs 158.18 billion from domestic sources and Rs 367.88 billion from foreign loans. NEA, Kathmandu Valley Water Supply Management Board, CAAN, and Nepal Water Supply Corporation top the list of borrowers.

Despite large sums invested, recovery remains limited. In FY 2024/25, the government recovered only Rs 2.62 billion in principal and Rs 5.29 billion in interest, while fresh investment totaled Rs 41.48 billion. Outstanding dues have climbed to Rs 400.08 billion, including Rs 259.19 billion in principal and Rs 140.88 billion in interest.

The 2025 Annual Performance Review of PEs highlights poor returns, showing just a 2.4 percent yield on government equity in FY 2023/24. Of 44 government-owned PEs, 15 are running losses and three are inactive.

In response, the government has begun privatization of four struggling entities: Janakpur Cigarette Factory, Butwal Yarn Factory, Nepal Metal Company, and Nepal Orind Magnesite. Gorakhkali Rubber Udyog, Udayapur Cement Udyog, and Hetauda Cement Factory have also been identified for potential privatization.

Despite nearly Rs 1 trillion in investments, public enterprises continue to underperform, with low returns and rising liabilities posing persistent challenges to the state’s financial management.