PE losses stand at Rs 41 billion

PE losses stand at Rs 41 billion
eKantipur.com, 25-May-07

The government has incurred a cumulative loss of Rs 45.16 billion in the operation of 21 state-owned enterprises by the end of fiscal year 2005/06.

“The loss incurred in these institutions were more than four times of share investments that the government has made into these enterprises,” said Bachchu Ram Dahal, acting auditor general, speaking at the meeting of the Public Account Committee (PAC) in the Interim-Legislature Parliament on Friday.

The government had made a share investment of Rs 10.86 billion in these 21 institutions while its total investment on all the 99 state-owned and semi-government institutions stood at Rs 51.54 billion.

He also informed that most of the state-owned institutions such as Nepal Airlines Corporations (NAC), Transport Corporation, Nepal Rosin and Turpentine and Rural Housing Company have not audited their accounts regularly.

Likewise, 10 other state-owned institutions have not audited their account for last 22 years.

According to Dahal, the Nepal Electricity Authority (NEA) alone has already incurred a cumulative loss of over Rs 5 billion whereas NAC's losses stand at over Rs 2.5 billion. The annual loss of NEA is around Rs 2 billion.

Top officials of NEA blamed wrong decisions and policies adopted by the then governments for the mounting loss. "The then government decision to purchase power from Khimti and Bhotekoshi Power Projects at high prices were the major cause behind the huge losses incurred by NEA," he said.

In addition, NEA has to recover over Rs 1.6 billion arrears from local bodies for street lamps. "The government should take immediate initiatives to recover the arrears and reduce losses," he said.

Gautam Das Shrestha, managing director of NAC, said that the then government's decision to lease an aircraft from Lauda Air in 2000 alone caused the NAC a huge loss of Rs 1 billion.

Dahal said that due to the weak internal control mechanism, lack of internal auditing, inability to utilize the full capacity of the institutions and increasing production costs were the main causes behind the huge losses in the public enterprises.