Sunday, July 11, 2010

Govt expenditure on PE employees goes up

Despite the poor performnace of the Public Entreprises (PEs) compared to private sector, the government's average expenditure on PEs employees has gone up almost to the level of private sector employees.
"The average expenditure per employee per month has increased to Rs 27,110 compared with Rs 21,672 a fiscal year ago," said the annual performance review of the PEs published by the Finance Ministry today.
Among the 36 PEs half of the PEs reported profit and the remaining half were in loss in the fiscal year 2008-09, whereas 17 were in profit and 19 in loss during the fiscal year 2007-08, said it.
"PEs under industrial sectors, service sector and social sector are in loss whereas the PEs under the trading sector, public utility sector and financial sector are in profit," according to the performance appraisal.
According to the Financial Comptroller General Office, the government has invested Rs 86.13 billion in these 36 PEs and has received Rs 3.47 billion in dividends in 2008-09. However, the return stands at only 4.03 per cent in comparison to the total government's share investment.
The government has received Rs 3.47 billion in dividends from Nepal Industrial District Management, Nepal Telecom, Nepal Stock Exchange and Rastriya Beema .
The review reveals that overall net profit of the PEs has also more than doubled to Rs 10.55 billion in the fiscal year 2008-09 from Rs 4.94 billion in the fiscal year 2007-08.
The performance appraisal gives a gloomy picture of the auditing of the PEs. "Out of 36 PEs, only 14 have completed audit up to fiscal year 2007-08, 15 PEs have completed audit upto 2006-07, two PEs have completed up to fiscal year 2004-05," according to it.
The government accepts that the task of limiting of number of Board of Directors to five could not be complied because of lack of Act and Regulations as some of the PEs that have specified the number of Board of Directors fixed above five that remained to be amended. Similarly, the government has also failed to hire professional management team to run the PEs.
The unfunded liability has increased by a whopping 92.59 per cent to Rs 9.54 billion in the fiscal year 2008-09, whereas contingent liability has touched Rs 17.10 billion. Similarly, the outstanding balance of the PEs remained Rs 74.6 billion at the end of the fiscal year 2008-09.
The annual performance review of the PEs incorporated per formance of 74 entreprises comprising 36 PEs with full government holding, 26 witgh minority share, 11 development committees involved in commercial activities and Employees Provident Fund that is incorporated under special Act.


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