The National Assembly today held a thorough deliberation on whether to retrench or give for private sector takeover of the underperforming state-owned enterprises. The Economic and Finance Committee revealed that out of the 13 State-Owned Enterprises, ten have experienced substantial losses.
Deliberating on the three recommendations made by the Economic and Finance Committee of the National Assembly, the house saw an extensive discussion concerning the future of the non-performing SOEs.
“Since many SOEs under the government are running under losses, has the government had any thoughts or done any work to hand over these underperforming SOEs to the private sector? The Country’s debt is increasing and it is high time that we promote the private sector,” said Bartsham-Shongphu MP, Passang Dorji (PhD).
“Our state-owned enterprises are working hard but are struggling to make profits. Likewise, some of the SOEs are only there to provide various services to the public. It is challenging to hand over such SOEs to the private sector. But I think we should hand over the non-performing profit-oriented enterprises to the private sector soon,” Dramedtse-Ngatshang MP, Ugyen Wangdi.
In response, the finance minister informed the house that for now, state-owned enterprises under the Druk Holding Investments only have a debt of over Nu 41bn and that they can repay the loans on time.
“Most of the debts are under DHI and under DHI, there are about 22 state-owned enterprises. It is the government’s investment arm. As such, most of the enterprises and projects have the potential to make good profit and also be an example for the private sector in the country,” said Finance Minister, Namgay Tshering.
Lyonpo further added it will not be easy to hand over the underperforming state-owned enterprises to the private sector especially the 13 SOEs under the finance ministry. He said these enterprises hold social responsibilities and play a vital role in providing essential services to the public.
The chairperson of the Economic and Finance Committee however claimed that the SOEs like Bhutan Livestock Development Corporation Limited, Food Corporation of Bhutan Limited and Farm Machinery Corporation Limited should be shut down immediately. Likewise, the committee suggested that Kuensel Corporation be handed over to the private sector.
“BLDCL today is competing with farmers. Rather than focusing on primary production, BLDCL is selling butter, cheese and eggs and competing with local farmers. This office should be closed immediately. Likewise, FMCL is not manufacturing power tillers and grass-cutting machines here,” said Kinga Penjor, the chairperson of the Economic and Finance Committee.
The agriculture minister however said that these three SOEs which come under the forest ministry cannot be closed or handed over to the private sector as it plays an important role in ensuring reliable and adequate food supply.
In agreement with the agriculture minister’s stance, the finance minister supported retaining the SOEs but suggested the possibility of retrenchment instead of complete closure.
Similarly, the house also deliberated on the two other recommendations. One is on developing the tourism sector by continuing to improve the incentive packages and other viable strategies to attract more tourists.
The other recommendation is to reinstate credit access for those economic activities that do not generate adverse implications on the reserve.
The House will adopt the Annual Budget Appropriation bill tomorrow.
Passang Dorji & Deki Lhazom
Edited by Yeshi Gyaltshen
