The Rameshore Khanal-led High-Level Economic Reforms Recommendation Commission has advised the government to dissolve five non-functioning public enterprises, including the Janakpur Cigarette Factory, as part of a broader strategy to streamline state-owned entities and enhance economic efficiency.
In its final report submitted to the Ministry of Finance on Friday, April 11, the commission identified Janakpur Cigarette Factory, Butwal Yarn Factory, Nepal Engineering Consultancy Service Centre, National Construction Company Nepal, and Nepal Orind Magnesite as institutions that have failed to sustain their operations. The report urges the government to formally liquidate these enterprises and take control of their physical assets for repurposing into more productive uses.
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The commission also proposed a merger between Hetauda Cement Industry and Udayapur Cement Industry after a comprehensive assessment of their assets and liabilities. The merged entity should then open its remaining shares for sale to the private sector, thereby increasing operational efficiency through public-private partnership.
Turning its focus to the national flag carrier, Nepal Airlines Corporation, the commission recommended a structural overhaul by bringing in foreign strategic partners to manage the organization commercially. “It would be appropriate to hand over management to an international partner for a defined period to commercialize the enterprise,” the report noted.
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In another significant recommendation, the commission proposed transferring the Dairy Development Committee to provincial governments as a public institution, aligning it with the federal structure for more localized oversight and better service delivery.
To depoliticize public institutions, the report calls for urgent amendments to existing company laws, ensuring these entities operate professionally and without political interference. It also emphasized the importance of timely audits of all public institutions to enhance transparency and accountability.
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Additionally, the commission strongly advised against using government loans to cover salaries and recurring expenses in public enterprises. “Public institutions must be self-reliant; bailouts for basic operations like salaries are unsustainable and discourage reform,” the report warned.
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In a further restructuring push, the commission suggested scrapping the Revenue Investigation Department, arguing that its responsibilities can be effectively absorbed by other existing agencies.
(With inputs from RSS)
