During the National Assembly session today, the Finance Minister announced that the business of the Bhutan Livestock Development Corporation (BLDC) has been remodelled into a dealership. This means the corporation will no longer be a State Owned Enterprise or SOE and its ownership will be privatised through the sale of shares. The minister also hinted at the privatisation of other non-performing SOEs gradually.
There are 13 State Owned Enterprises under the Finance Ministry as of now. The SOEs were initially created to undertake commercial activities, which were not catered for by the private sector and as a social policy.
However, with time, duplication of services in the form of SOEs occurred in some private entities. Moreover, enterprises such as BLDC and FMCL, which have to fulfil social mandates, could not earn enough income, therefore increasing the burden on the national budget.
“Most of the SOEs have social mandates to fulfil. Everyone knows that our government did not come up with a new SOE during our tenure. The Finance Ministry is carrying out a series of business reviews in collaboration with external experts to turn SOEs into assets for the country in the long run,” said Finance Minister Namgay Tshering.
The ministry is considering privatisation of some other SOEs as well. The Finance Minister added that Bhutan Lottery and Bhutan Duty Free which make profits unlike other SOEs cannot be privatised for now.
“The ownership of FMCL, BLDC and BDBL can be privatised. Now when we say we will float shares for these SOEs, we need to have proper rules and regulations. So we will first start this with BLDC and we are almost ready with the formulation of the rules and regulations.”
As a cost-saving measure, the Finance Ministry has also initiated a series of mergers and acquisitions of the existing SOEs. The Menjong Sorig Pharmaceuticals Corporation and Royal Bhutan Helicopter Services have been merged with DHI and Drukair Corporation respectively. The Government now has approved the merger of the National CSI Development Bank with the Bhutan Development Bank.
Samten Dolkar and Tashi Dekar
Edited by Kipchu
