Kathmandu: Public enterprises in Nepal are set to be classified into two groups: commercial and strategic, according to the newly issued “Public Enterprises Management and Good Governance Policy, 2025” by the government.
The policy, approved by the Cabinet meeting on September 28, states that public enterprises competing with the private sector will be categorized as commercial enterprises.
Institutions responsible for implementing government policies and programmes, fulfilling national and international commitments, or providing essential services where the private sector is not involved will be advanced as strategic public enterprises.
Similarly, the policy outlines that all public enterprises will be transitioned to a company model. “By changing the legal basis for the establishment of public enterprises, all will be gradually converted into companies,” the policy states. It also proposes separating regulatory and operational functions, ensuring board representation based on share ownership, and other strategies.
The policy includes provisions to fully digitize the financial transactions of enterprises, dematerialize government-held shares under the name of the Public Debt Management Office, allow private sector representation without conflicts of interest in the enterprises’ objectives and scope, and conduct organizational and management surveys to eliminate unnecessary and irrelevant positions.
It also mentions preparing criteria and procedures for appointing officials in public enterprises, amending formation orders, articles of association, and regulations, and gradually converting public enterprises established under various laws into companies under the Companies Act, 2006.
In recent years, the competitive and commercial capacity of public enterprises has weakened, with their financial condition deteriorating annually. This policy has been issued with the aim of facilitating easy and accessible production and distribution of quality goods and services in line with the establishment objectives of public enterprises, while making them commercially competitive.
Of the current 45 public enterprises, 20 are fully owned by the government, and 25 operate under majority government ownership. Currently, six enterprises are not engaged in any commercial transactions, while two are inactive. Among the operational public enterprises, 28 are profitable, and 15 are operating at a loss.
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