National Trading proposes raising Rs 1b by selling land
KATHMANDU, April 16: National Trading Limited (NTL) has proposed raising Rs 1 billion by selling 18 ropanis (0.92 hectare) of land in Teku of Kathmandu to diversify business operation.
The board of directors of the state-owned trading firm has already approved the company´s proposal. “It has now been forwarded to the Ministry of Finance for final approval,” Dilli Dhoj Karki, acting director general of the company, told Republica.
NTL, which was actively selling imported machinery and range of commodities until a decade ago, has now been forced to restrict its business operation to sales of few items like cement and sugar.
“This was largely because of the enforcement of Public Procurement Act, which does not allow state-owned companies to get directly involved in purchase of goods,” Karki said. “As a result we have not been able to import goods like machinery and parts of various equipment for almost half a decade.”
Although there are debates on whether the state should get involved in businesses that are currently in the realm of the private sector, experts say becoming a mute spectator of fall of companies that are currently operational will only drain away taxpayers´ money.
“If the government truly believes such companies are of no use to the state, it should take bold moves and privatize or scrap such firms,” an official of finance ministry said on condition of anonymity. “But until such decisions are taken, those firms should be allowed to make optimum use of their capacity.”
To enhance its performance, NTL has proposed opening petrol pumps in Bhairahawa, Birgunj and Dhangadi, among others. The company currently operates a petrol pump in Teku and is soon opening another such station in Pokhara.
“We have also proposed establishing a liquefied petroleum gas bottling plant, though location of such a facility has not yet been finalized,” Karki said, adding, “Business diversification is the only way we can survive.”
The state-owned firm currently functions as authorized distributors of state-owned Udaypur and Hetauda cement factories. It also purchases sugar in bulk by launching tender bids for the purpose retailing it.
To diversify its business operation, the state-owned company has also requested that it be allowed to sell chemical fertilizer and goods confiscated by customs offices. It has also proposed opening five more sales outlets and keeping 10,000 tons of sugar as buffer stock.
“To meet these targets, we need fund injection of around Rs 1 billion, which can be obtained by selling 18 ropanis of land in Teku,” Karki said. “As of now state-owned companies like Employees Provident Fund and Nepal Transport and Warehouse Management Company have expressed interest in acquiring the plot.”
National Trading Limited currently owns around 50 ropanis of land in Teku. It also has around 26 ropanis of land in Ram Shah Path of Kathmandu and huge plots of land in places like Biratnagar, Birgunj, Mahendranagar and Surkhet, among others.
Established around 50 years ago, NTL, which has around 398 staff members, has a negative net worth of Rs 98.9 million. It currently has loan liability of over Rs 600 million and staff liability of around Rs 180 million.