Print Edition - 2015-03-25 | MONEY
Government loses Rs 4b on failed corporations
Mar 24, 2015-
Rs4 billion of the government’s investments in public enterprises has gone down the drain as a number of them turned out to be a total flop. It has lost Rs2.7 billion in share and loan investments and Rs1.33 billion in defaulted interest as of mid-January, the Financial Comptroller General’s Office (FCGO) said.
The government had made share investments in 29 enterprises and loan investments in 23 enterprises which have now become defunct. Foreign loans amounting to Rs166 million had been lent to six enterprises which have since been dismantled.
However, the resources poured into the corporations that went belly up represent a very small portion of the government’s total investments. The share investments in 29 institutions that went bad account for 0.6 percent of the total investments while the bad loan investments amount to 1.38 percent.
The government’s share and loan investments in 139 institutions came to
Rs 272.94 billion as of the first half of the current fiscal year. This figure includes the Rs 5.56 billion worth of investments made during the review period.
According to the FCGO, the government has made share investments worth Rs127.73 billion in 107 public enterprises. The share investments made during the first half of the current fiscal amounted to Rs568 million. Ordinary shares make up 91.68 percent of the share investments.
Likewise, the government has granted loans worth Rs145.21 billion as of mid-January. Among the public enterprises receiving government share and loan investments, the Nepal Electricity Authority (NEA) comes at the top of the list, according to FCGO. The NEA received Rs4.99 billion in loans from the government during the first half of the current fiscal.
Public enterprises which have been formed under special acts (which includes the NEA) have received the highest share investment from the government. There are 20 corporations in this category that have received 72.7 percent (Rs92.51 billion) of the government’s share investments while corporations registered under the Company Act have received 23.08 percent.
State-owned enterprises have defaulted on government loans worth Rs60.69 billion out of the total credit of Rs145 billion as of the end of the last fiscal year.
The FCGO said that 48.55 percent of the outstanding amount represents principal and the rest interest. Likewise, internal loans amount to 53 percent with the rest being external loans.
Published: 25-03-2015 09:02