Taskforce suggests strong legal foundation to PEBA taskforce formed to make recommendations on making the Public Enterprises Board (PEB) effective has suggested giving stronger legal foundation to the board.
A taskforce formed to make recommendations on making the Public Enterprises Board (PEB) effective has suggested giving stronger legal foundation to the board.
The taskforce headed by former Secretary Bala Nanda Poudel has suggested continuing the PEB—formed by the Cabinet under “Formation Order” five years ago—under an Act. If it takes time to devise an Act, it has recommended bringing the PEB under a regulation under an existing Act.
The taskforce submitted its report to Finance Minister Bishnu Poudel on Friday. “As many as 12 chief executive officers were appointed based on the board’s recommendations, but almost all appointments faced legal challenges,” said a member of taskforce.
PEB itself was in legal turmoil for 18 months after its authority to make recommendations on PEs was challenged in the Supreme Court (SC). The court, through an interim order, barred PEB from issuing vacancy notices and carrying out other works related to the appointments of CEOs on September 2013. But the SC later in March 2015 allowed the board to conduct regular work.
However, the PEB’s former chairman Bimal Wagle said even under the current legal foundation, nothing has stopped board from doing its job. “It took a long time for the SC to give its verdict due to longer legal procedures. It is not due to the weakness in the legal foundation of the PEB,” he said.
During the period when SC barred the board from doping its regular work, the government removed 17 PEs from its purview and political appointments were made in them. The board was formed to make CEO appointments at PEs on the basis of merit.
The taskforce has also suggested changing the memorandum of association of PEs in line with the objective of the board. It has also suggested developing the PEB as an institution that conducts three main tasks—giving policy advice to the government on PEs, making recommendations for the appointments of CEOs and professional board members, and working as an oversight body of all PEs.
“While talking about the body giving policy advice, it can give suggestions on whether a certain PE should be privatised or restructured or the government’s shares should be divested,” said a member of the taskforce.
To work as an oversight body, the panel has suggested the board maintain an electronic database of all PEs based on which necessary policy advice be made.
In order to carry out the three above-mentioned tasks, the taskforce has recommended appointing three board members, excluding ex-officio members. Currently, there is provision of five board members, excluding ex-officio members.
Finance Ministry spokesperson Mukunda Prasad Paudyal said the taskforce has also suggested to put in place certain measurable performance indicators against which the performance of the CEOs could be evaluated. “The CEOs should be rewarded and penalised based on their performance,” he said.
Currently, CEOs are selected based on interview and presentation of business plan.
Currently, a CEO selected by board signs a contract, in which certain terms of reference are mentioned.
“The CEO’s evaluation is made based on whether s/he has performed based on the contract,” said Wagle.