Privatization is transferring ownership, property, or business from the government to the private sector. The privatization of public enterprises is one of the important aspects of Nepal’s economic liberalization. Privatization has been taken as a means of improving the performance of public enterprises.
Privatization Policy and Practices in Nepal
The Privatization Act, 1994 defines privatization as involving the private sector in the management of the enterprise or selling or leasing it, or transferring government ownership to the private sector or workers, or the desirous group either wholly or partially. The main features of this act are as follows:
Privatization Committee
A privatization committee manages the privatization of government businesses. It is led by the finance minister or state finance minister and includes government officials, financial experts, and legal advisors. The committee is appointed by the government and operates under the Ministry of Finance.
Responsibilities of the Committee
- Suggest privatization programs and priorities.
- Conduct studies to design privatization plans.
- Assess enterprises and recommend them for privatization.
- Solve issues during the process.
- Monitor decisions and agreements.
- Create sub-committees if needed.
Privatization Methods
- Assets Sales
- Business Sales
- Share Sales
- Management Contract
- Lease Assets
Proposal Evaluation Criteria
- Fair price offer.
- Retaining jobs for current workers.
- Expanding the business with investments.
- Increasing job opportunities.
Dispute Resolution
Issues are resolved through discussions among parties.
Worker Job Security
The government may ensure existing workers keep their jobs after privatization.
Enterprise Liquidation
- The government can close an enterprise through an official notice.
- Unpaid dues are collected as government revenue.
- Assets and liabilities may be transferred or settled as per the law.
Thus, Privatization helps improve the efficiency of public enterprises by involving the private sector. It can support economic growth, create jobs, and increase business opportunities if done well.