Four state-owned trading companies will be merged to form National Supply Company which will operate as an oversight agency to ease the supply of essentials.

The Supply Ministry said Tuesday that the establishment of the new company as per the government’s budget statement for 2016-17 would be completed by the end of the next fiscal year.

As per the government’s plan, the new company will be set up by combining National Trading Limited, Nepal Food Corporation, Agriculture Input Company and Timber Corporation of Nepal. 

Ananda Ram Regmi, spokesperson for the Supply Ministry, said the proposed National Supply Company would be tasked with forming an effective distribution mechanism. According to him, the four public enterprises (PEs) will either be dissolved or merged with the new company. 

Regmi said National Supply Company would coordinate with public enterprises and regulatory bodies related with the distribution of essential supplies. “This will ensure smooth supplies of daily essentials by providing services in an integrated form.”

The ministry said it would devise the terms of reference and guidelines by the end of this fiscal year. The board of directors of the new company will include high officials of the ministry and executives of public enterprises related with utilities. 

The formation of the supply company is also expected to help effective market monitoring. “As poor distribution is one of the main factors responsible for market anomalies including black marketeering, such wrong practices can also be minimised after the supply company starts operations,” Regmi said. 

“Besides, the company will work in coordination with other regulatory bodies like the Department of Supply Management, Department of Food Technology and Quality Control and Nepal Bureau of Standards and Metrology to ensure effective market monitoring.” As per the ministry, the government has allocated an annual budget of Rs20 million for the company.   

The government moved to set up the company after witnessing the poor supply situation following last year’s earthquake and the Indian trade embargo. Due to lack of an effective distribution mechanism, people are still having a hard time obtaining daily essentials including cooking gas due to a rise in black marketeering. 

In addition, people in drought-stricken Karnali have not received adequate amounts of food on time due to a poor supply mechanism. Though the monsoon is just a few weeks away, the government has failed to supply food to the region.