In the last fiscal year, 26 public institutions earned a net profit of Rs. 48.51 billion 75 lakhs. According to the Ministry of Finance, there are currently 44 public institutions, of which 15 have incurred losses and three have zero business operations. The ‘Annual Status Review of Public Institutions 2081’ states that in the fiscal year 2078/79, there were also 44 public institutions, of which 25 were in profit and 17 were in loss. Compared to the previous fiscal year, the total net profit of the institution increased by 3046.20 percent.
The main reason for the increase in net profit is Nepal Oil Corporation. After the price of fuel increased in the international market, the corporation had a net profit of Rs. 38.17 billion 78 lakhs in the fiscal year 2078/79.
However, due to the decrease in fuel prices and the responsibility of bearing the loan, the corporation could not operate in a fully self-sufficient manner and incurred a net profit.
In the fiscal year 2079/80, the corporation’s net profit was Rs. 11.72 billion 30 lakhs. The increase in the net profit of the institutions operating in the business sector is also a reason for the increase in the net profit.
The government received a profit of Rs. 10.45 billion in the fiscal year 2079/80 from the institutions operating in profit. In the fiscal year 2078/79, a profit of Rs. 6.15 billion 51 lakhs was received.
Public institutions are those institutions in which the government has more than 50 percent controlling ownership. Currently, there are 10 institutions in the industrial sector, four in the business sector, 11 in the service sector, five in the social sector, five in the public utility sector, and nine in the financial sector.
According to the review, the total number of institutions in the industrial sector is in loss. The loss of the institutions in this sector is Rs. 1.48 billion 50 lakhs. The institutions in the business sector have a net profit of Rs. 11.81 billion 14 lakhs.
Similarly, the total number of institutions in the service sector is Rs. 2.22 billion in profit. The institutions in the social sector have a loss of Rs. 12.05 billion. The condition of the institutions in the public utility sector is satisfactory. The total number of institutions in this sector is Rs. 17.10 billion 40 lakhs in profit. The institutions in the financial sector are all in profit. The total net profit of this sector is Rs. 18.98 billion 75 lakhs.
According to the review, Nepal Oil Corporation has the highest net profit of Rs. 11.72 billion 29 lakhs. In second place is Nepal Electricity Authority with a net profit of Rs. 9.40 billion 55 lakhs, followed by Nepal Telecom with a net profit of Rs. 7.92 billion 1 lakh, Citizen Investment Trust with a net profit of Rs. 3.85 billion 70 lakhs, and Employment and Loan Guarantee Fund with a net profit of Rs. 3.80 billion 63 lakhs. The net profit of these five institutions is 75.67 percent of the total net profit.
| Institution | Net Profit (in Rs.) |
|---|---|
| Nepal Oil Corporation | 11.72 billion 29 lakhs |
| Nepal Electricity Authority | 9.40 billion 55 lakhs |
| Nepal Telecom | 7.92 billion 1 lakh |
| Citizen Investment Trust | 3.85 billion 70 lakhs |
| Employment and Loan Guarantee Fund | 3.80 billion 63 lakhs |
The institutions with the highest losses are Nepal Airlines Corporation (Rs. 65.29 million), Nepal Water Supply Corporation (Rs. 54.69 million), Dairy Development Corporation (Rs. 48.42 million), Udayapur Cement Industry (Rs. 36.28 million), and Nepal Television (Rs. 35.12 million). Nepal Airlines Corporation has been operating in continuous loss since the review period of 2076/77.
| Institution | Loss (in Rs. million) |
|---|---|
| Nepal Airlines Corporation | 65.29 |
| Nepal Water Supply Corporation | 54.69 |
| Dairy Development Corporation | 48.42 |
| Udayapur Cement Industry | 36.28 |
| Nepal Television | 35.12 |
Compared to the fiscal year 2078/79, the net loss has also decreased, but the financial condition of Nepal Airlines Corporation is not satisfactory. The review states that ‘there are problems in the timely repayment of the principal and interest of the aircraft purchased with loans from financial institutions, high administrative expenses, low aircraft operations, and not implementing commercial plans properly, which has led to a deterioration of the situation.’
Similarly, other institutions also lack clarity and unity in their objectives. The review states that ‘on the one hand, there is a constraint of operating in a competitive and challenging environment with commercial objectives, and on the other hand, the government has the responsibility of providing quality goods and services to the citizens at affordable prices.
The institution does not have full autonomy to determine the price of the goods and services produced by itself. The members of the executive committee of the institution and the chief executive officer cannot save themselves. The problem has been seen in the appointment of experienced and capable individuals.’
