National Trading likely to get new lease of lifeThe government is mulling to resurrect National Trading Limited (NTL) instead of merging the defunct state-owned enterprise with Nepal Oil Corporation (NOC) as per an earlier decision.
The government is mulling to resurrect National Trading Limited (NTL) instead of merging the defunct state-owned enterprise with Nepal Oil Corporation (NOC) as per an earlier decision.
The Ministry of Supplies said it had taken the advice of experts into account when deciding to give perpetually loss-making NTL a new lease of life.
NTL had been lined up for amalgamation as per the government’s plan to combine loss-making public enterprises possessing immense fixed assets.
As of 2015-16, NTL’s average annual revenue stood at Rs50 million while its administrative costs amounted to around Rs100 million and losses totalled Rs151 million.
The company’s financial position started to weaken in 2008 after the Maoist-led government closed the duty-free shop it was running at Tribhuvan International Airport.
The government’s budget statement for 2016-17 had also said that NTL would be merged with Nepal Food Corporation, Agriculture Inputs Company and Timber Corporation of Nepal to form National Supply Company.
A few months ago, the government sold 51 ropanis of land at Teku owned by NTL to NOC. The money received from the sale was used to pay off NTL’s 340 employees.
NTL’s liabilities total Rs1.56 billion. According to officials of the Ministry of Supplies, a majority of the participants at a multilateral meeting held on Friday supported reviving NTL.
“A number of participants said that NTL should not be sent into liquidation. They recommended merging it or allowing it to trade specific products,” said Supplies Secretary Prem Kumar Rai.
Rai said they would be proposing six alternatives to the government regarding the future of NTL. “We are preparing the final document which will be submitted to the Cabinet for the final decision,” he said.
As per NTL, its assets are worth Rs15-16 billion. General Manager Laba Raj Joshi said they had presented several business plans during the multilateral meeting held at the Ministry of Supplies.
“We have presented both short- and long-term business plans to the government, assuming that it will decide to resurrect the enterprise,” Joshi said.
According to Joshi, short-term plans include renting out NTL’s fixed assets, reopening the airport duty-free shop or working in alliance with Nepal Food Corporation to supply essentials. “This could shore up NTL’s finances in the next three years.”
Long-term plans for NTL include allowing it to import products like bitumen or operate exhibition centres that can be established on its land.
Meanwhile, Bimal Wagle, former chief of the Public Enterprise Board, expressed doubts about the long-term sustainability of NTL. “The enterprise is no more relevant in the new context, however, it can be developed as a wing of Nepal Food Corporation to help regulate the supply of essentials during emergencies,” he said.
Giving an example of the high demand for raw sugar in the European market, Wagle said that NTL could explore potential export markets globally. “The enterprise can be used as a means to enforce regulated liberalisation to help the country achieve its self-reliance targets,” Wagle said.