Govt allows National Trading to sell land, raise Rs 1b
KATHMANDU, May 4: The Ministry of Finance has given a green signal to the state-owned National Trading Limited (NTL) to sell 18 ropanis (0.92 hectare) of land in Teku to raise Rs 1 billion for business diversification purpose.
“The permission has been given on condition that the land be sold to government agencies or organizations,” a senior official of the finance ministry told Republica.
As per the decision taken by the cabinet in June 2010, public enterprises cannot sell fixed properties to parties other than those under the state control.
“Keeping the government provision in view, we have already initiated talks with couple of state-owned firms, and Employees Provident Fund and Nepal Transport and Warehouse Management Company have expressed interest in acquiring the plot,” said Dilli Dhoj Karki, acting general manager of the company. “We will continue to hold talks with other parties as well and hand over the land to the one that offers the best deal.”
Once the deal is struck, National Trading will actively pursue its business diversification plan, which includes opening of petrol pumps in Bhairahawa, Birgunj and Dhangadi, among others.
The company, which currently operates fuel refilling stations in Teku and Pokhara, has also proposed establishing a liquefied petroleum gas (LPG) bottling plant, although the location of such a facility has not been finalized yet.
“We are also seeking government permission to sell chemical fertilizers and goods confiscated by customs offices,” Karki said, adding, “Establishment of five more sales outlets is also on the cards.”
Established around 50 years ago, National Trading was actively selling imported machinery and different commodities until a decade ago. However, lately, its role has been limited to that of selling sugar and cement manufactured by Udaypur and Hetauda cement factories.
“Our business scope has been constricted ever since the enforcement of the Public Procurement Act, which barred state-owned companies from getting 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.”
These factors, along with inefficiency and unnecessary political intervention, started affecting the company´s financial health. It is now saddled with over Rs 600 million of debt.
“Things might improve and the company may be able to flap its wings again, once it raises funds through sales of land,” Karki said.
The trading house 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.