Loss-making PEs’ admin costs jump

- RAJESH KHANAL, Kathmandu

Jul 11, 2014-

Administrative costs of 17 loss-making public enterprises are projected to rise 41.35 percent this year, according to Annual Performance of Public Enterprises 2014.

These institutions are incurring a combined net loss of Rs 7.82 billion, while their administrative costs are projected to jump to Rs 10.28 billion at the end of this fiscal year from Rs 7.27 billion a year ago. These 17 PEs are expected to see their administrative costs jump by 0.67 percent to 74.12 percent this year.

The state firms that are losing money include Herbal Production and Processing Company (HPPC), Hetauda Cement, Janakpur Cigarette Factory, Nepal Aushadhi Limited, Udayapur Cement, Nepal Oriend Magnesite, National Trading Limited, Nepal Food Corporation (NFC) and Nepal Oil Corporation (NOC).

Similarly, National Construction Company Nepal, National Productivity and Economic Development Centre, Sanskritik Sansthan, Gorkhapatra Sansthan, Janak Sikchha Samagri Kendra, Nepal Television, Nepal Khanepani Sansthan and Nepal Electricity Authority (NEA) are also in red.

Bimal Prasad Wagle, chairman of Public Enterprises Board, said an increase in overhead costs as a result of high inflation rate and overstaffing could have contributed to the rise in office expenses of these enterprises.

“As a result, the unfunded liabilities of these enterprises have surged massively in the recent days,” he said. According to the report, unfunded liabilities of the PEs for retirement benefits to staff stands at Rs 26.96 billion.

Among the PEs, HPPC’s administrative costs would jump by the highest rate of 74.12 percent, from Rs 25.5 million to Rs 44.4 million.

NEA, which lost the most money among the PEs, would see its office expenses rise 50.64 percent, the third highest rise. NEA posted a loss of Rs 4.63 billion last fiscal year.

Administrative costs of NOC, which incurred second highest net loss of Rs 2.05 billion last year, are projected to surge 22.08 percent.

Other PEs facing higher administrative costs are Hetauda Cement Factory, Nepal Oriend Magnesite, Udayapur Cement and National Construction Company.

However, if all the 37 PEs are taken into account, their administrative costs would grow by 4.88 percent on an average to Rs 35.03 billion. The report said only five of them are expected to be successful in reducing the costs.

Administrative Expenses

Public Enterprises                                                           Rise in expenditure (%)

Herbal Production and Processing Company                          74.12

Hetauda Cement                                                                             54.79

Janakpur Cigarette Factory                                                               NA

Nepal Aushadhi Limited                                                                 -100

Udayapur Cement                                                                            23.07

Nepal Orind Magnesite                                                                  32.65

National Trading Limited                                                                5.38

Nepal Food Corporation                                                                  0.67

Nepal Oil Corporation                                                                      22.08

National Construction Company Nepal                                        28.21

National Productivity and Economic Development Centre         NA

Sanskritik Sansthan                                                                           3.63

Gorkhapatra Sansthan                                                                      9.65

Janak Sikchha Samagri Kendra                                                     4.00

Nepal Television                                                                                 13.17

Nepal Khanepani Sansthan                                                            18.25

Nepal Electricity Authority                                                                  50.64

Published: 12-07-2014 09:17

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