Government to resume operation of defunct PEs

- Post Report, Kathmandu

Sep 12, 2016-

The Ministry of Industry (MoI) is considering finalising a modality to resume operation of defunct public enterprises (PEs).

In the first phase, the ministry plans to restart seven industries that have ceased to function. The seven PEs, according to Industry Minister Nabindra Raj Joshi, are: Nepal Drugs Limited (NDL), Birgunj Sugar Mill, Nepal Orind Magnesite, Agriculture Tools Factory, Butwal Dhago Kharkhana, Nepal Metal Company Limited and Gorakhkali Rubber Udyog.

Joshi made the statement at an interaction organised here on Sunday to introduce the Industrial Sector Reform Work Plan, which has identified 59 areas for reforms, including policies and legal reform, structural and procedural reform, development of cottage and microenterprise, establishment of industrial area and special economic zone, improvement of goods and services and exploration and development of mines and minerals.     

According to the work plan, the ministry aims to bring seven defunct state-owned enterprises into operation by July 2017. Of the seven public enterprises, NDL, according to Joshi, will come into operation immediately.

He said the government is currently considering different modalities under which Nepal Drugs would be revived. “The modalities under consideration are: The government’s direct involvement in company’s operation, handing over management contract to a third party or resuming operation of the company as a public private partnership venture,” said Joshi. “We are evaluating the pros and cons of all three models and will make appropriate decision within two to three days.”

Established more than four decades ago, NDL is the country’s oldest pharmaceutical company manufacturing allopathic drugs. It has remained defunct for more than seven years after it failed to adopt Good Manufacturing Practice (GMP) set by the World Health Orgnaisation (WHO). 

Joshi said the ministry will bring the company back into operation by adopting the GMP standard. After resuming NDL’s operation, the ministry will initiate the process of bringing six other enterprises into operation. 

In the second phase, Joshi said, the ministry would resume operation of Biratnagar Jute Mill and Janakpur Cigarette Factory, which was previously shut down by the government. “Whatever might be the reason behind the closure of these enterprises, I will not completely privatise them,” he said. 

Published: 12-09-2016 10:12

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