The review will take a minimum of three months and the government will then decide whether there is a genuine need of all the SOEs in the country or not
As the finance ministry has come up with the Corporate Governance Guidelines for State Enterprise 2019, Prime Minister Dr. Lotay Tshering said the government is relooking into the roles of State Owned Enterprises (SOEs).
The finance ministry has formed a task team to review and study on the functions and roles of SOEs with relevant agencies and there are 16 SOEs registered with the ministry.
During the Friday Meet yesterday, Lyonchhen Dr. Lotay Tshering said currently around four SOEs are running profitably and some of them are running in losses.
Lyonchhen said if SOEs keep growing, private sector shrink because of the limited market and limited share.
“If there are limited shares and through some government policies give more emphasis on SOEs, how will the private sector grow? We are in the process of drawing a line between how much should the SOEs be doing and what the private sector should be doing,” Lyonchhen added.
He added that the private sector development board, which was constituted recently, will now come up with some suggestions and advices to the government.
Meanwhile, the Corporate Governance Guidelines for State Enterprise 2019 states that the purpose of the guidelines is to promote sound corporate governance in state enterprises through adoption of high standards of corporate governance principles and practices; provide guidelines to the state enterprises on corporate governance practices that are based on globally accepted standards and facilitate state enterprises to operate in such a way that maximizes economic value and performance within the overall guidance of the Public Finance Act 2007 and the Companies Act 2016 and the amendments thereof.
Similarly, Finance Minister Namgay Tshering said there are no proper rules of procedure on the SOEs and that their first priority is to streamline the functions of the existing SOEs.
He added that some of the SOEs are almost three to four years old and that the ministry is looking into redefining and trying to review the rationale behind the need for all these SOEs.
“Do we really need all these 16 SOEs in the country? A few SOEs’ roles can be functioned by the private sector too and the government should be helping and facilitating the private sector growth,” Lyonpo Namgay Tshering said.
The Lyonpo added that the task force team will review the functions of the SOEs and that the ministry has also drafted the Terms of Reference on how the review should be done.
He added the outcome of the review would have say on the actual requirement of SOEs and that some SOEs may probably be not required. In the long run, it would also be looked into whether some SOEs can function as a private pubic partnership (PPP) and how private can play vital role in the SOEs.
The review will take a minimum of three months and based on the report, the government will decide whether there is a genuine need of all the SOEs in the country.
Citing examples of Bhutan Post and Food Corporation of Bhutan Limited (FCBL), Lyonchhen said these offices are no more useful now as all letters and emails are sent through social media.
Lyonchhen added that those days FCBL was required to sell food products at subsidized rate and now that we are going for food self-sufficiency, no more subsidies is required.
Dechen Dolkar from Thimphu