KATHMANDU, Oct 29: The government has identified several key challenges in reforming public enterprises, including reducing administrative expenses through organizational restructuring, cutting unnecessary financial liabilities, and enhancing the effectiveness of boards of directors. Another priority is to ensure that these enterprises operate with a professional structure suited to their business nature.
Improving the production and distribution of goods and services in line with public expectations, minimizing external interference through policy, legal, and procedural reforms, and strengthening internal governance have been highlighted as major challenges.
The absence of effective monitoring and evaluation mechanisms, the lack of qualified leadership aligned with each institution’s objectives, and weak human resource management remain persistent problems.
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Many public enterprises struggle with poor employee management, unclear assessment of government investment, and low returns on state capital. Growing unfunded and potential liabilities have added further pressure, while weak internal controls and limited transparency continue to undermine performance.
To address these issues, the government aims to enforce business plans, approve annual budgets and financial reports, evaluate the performance of chief executives, and ensure transparent auditing, risk management, and remuneration systems. It also plans to approve and implement organizational structures, strengthen financial discipline, and ensure that institutions fulfill their legal mandates.
A new strategy will focus on merit-based and inclusive leadership selection, technology-driven and integrated service delivery, and redesigned business processes. Transparency in operations and decision-making, along with stronger accountability to service users, will be prioritized.
The government also plans to build a regular monitoring and evaluation system, enforce transparent and disciplined financial management, and modernize accounting systems to make them reliable and comparable.
The policy envisions identifying and managing financial risks, introducing performance-based incentives, and enhancing the skills and capacity of human resources. It also calls for participatory decision-making, research and innovation, use of modern technology, and improvements in service quality.
Currently, there are 45 public enterprises in operation. Among them, 20 are fully government-owned, while 25 operate under majority state ownership. By the end of fiscal year 2080/81, the government’s total investment in these institutions reached Rs 703.93 billion.
