Does anyone remember a time when you had to wait for a decade or more before Nepal Telecom gave you a land line? Yes, ten years or more after you had applied for a phone line! Many people were surprized when they finally received notification of their good fortune as by then they’d forgotten that they’d once applied for a phone. That is how government owned enterprizes work and the reason is simple; there was not a single person in the organization interested in making money for the corporation because no matter what, they got their salaries at the end of the month. And distributing more telephones only meant more work for the staff; there would obviously be more complaints and more calls for repairs. With no competition in the field of telecommunications, when mobile phones were introduced, NTC charged as much as Rs 1200 for a sim card. Enter a private company; and they bring the prices down to Rs 200. Yes, that was Mero Mobile. It later became NCell and now one can buy a sim for Rs 99. NTC was obligated to stop swindling people and bring prices down or go out of business. Now this government run corporation is trying to expand their services throughout the country simply because NCell is everywhere. It’s either ‘compete or close down’. Who would have thought NTC would open service centers around Kathmandu and their service would reach remote villages! But their service is still poor when compared to NCell’s.
Most of the progress made in this country since modernization has been through private enterprize. Take for instance education: the quality of education imparted by private schools is far superior to what one can expect from government schools for the simple reason that the government doesn’t spend enough despite a huge budget allocated for the education sector. Teachers are so poorly paid that well educated people will not teach in government schools. Moreover these schools are run on tiny budgets leading to lack of facilities and poor infrastructure. The teaching standards are so poor that a large number of students fail the SLC exams each year while some private schools have no failures at all.
In the past decades we have seen enterprizes under government control fail time and again. A case in point is RNAC which is now known as NAC. This corporation has long been a cash cow for those running the show and moreover suffered from government interference which has led to bad management and it has accrued huge losses. The massive loans RNAC had taken in the past have been written off but where did the money come from? It is tax payers’ money that the government plays with. With each change of government we see the appointment of a new Managing Director whose term is so short that he has little time to implement his reforms or bring order to the chaos. Attempts have been made to hand over management to a foreign company time and again, but those interested in running the corporation have suggested cutting down the work force significantly. That;s where talks end. NAC remains a loss making enterprize six decades after its inception while recently established private companies like Yeti Airlines and Buddha Air are making a healthy profit.
When it comes to public transportation, all government run enterprizes have failed so far. The Sajha Yatayat despite receiving donated Mitsubishi buses from the Government of Japan failed to maintain them and as a result of massive misappropriation of funds to put it nicely, it went bust. It has now been re-launched in partnership with a private enterprize and has been providing good service to commuters. The Trolley Bus Service between Bhaktapur and Tripureshwar which was established by the Government of China was the pride of Kathmandu as it ran on electricity, thus pollution-free and never had to stop for re-fueling. However it never made a profit and with lack of maintenance it soon ran aground. KMC now plans to buy 25 electric buses from China to be run in collaboration with Sajha Yatayat. This will succeed only if run in partnership with their private partner.
On the other hand wherever there is a dominance of private enterprize, we have seen phenomenal growth. There has been a spectacular mushrooming of eateries in the last decade and it is not just the quantity that is surprising but the quality of food that is available in Kathmandu today. From Vietnamese cuisine to Russian food the valley restaurants offer them all. It is truly something we can be proud of and we have even exported our chefs to various countries around Asia and the Middle East.
Amazingly even banks run by the government despite enjoying a monopoly before private enterprize entered the fray, failed to make a profit. While privately run banks like Nabil and Grindley’s were reaping huge profits and offering large bonuses to their staff, Nepal Banijya Bank and Nepal Bank had to seek outside help to bring them around to profitability by downsizing the staff and modernizing their services. It was not uncommon in the 80s for someone to spend half a day at one of these banks just to cash a cheque. One would find some employees knitting at their desks while the peon who took your cheque from point A to point B for processing would be out on an errand. And your signature had to be so identical that one would often have to sit in front of the Bank Manager and sign until it matched the sample signature accurately. Thank God for private enterprize we don’t need to spend any time at the banks these days, and we can keep our dignity too.
Anything run by the state in Nepal is doomed to fail as we have seen in the last 60 years unless competition pushes them to improve. Supplying electricity or energy of any kind to the entire country ought to be a multi- million dollar business and in six decades, Bidyut Corporation (or NEA) should have grown so big that we should be exporting electricity to power hungry India by now. Instead we are importing from India because during winter the demand is 1500 MW but NEA can only manage a miserable 300 MW. The corporation makes no profit at all and the top officials were recently charged with corruption. It fails to even collect bills and new power projects are mired in controversy and unnecessary disputes between different factions involved in implementing the project. Recently a Scandinavian power company pulled out after years of involvement and after spending millions of dollars. All these years of mismanagement and lack of investment has lead to 14 and in some years up to 18 hours/day of power cuts. Let private enterprize take over and we’ll soon see a surplus of energy as various companies vie with each other to become the leading supplier in order to reap in maximum profits. Until such a time when major utility companies are owned by private firms, the average households will lack basic facilities that are necessary for improving living standards.
The same is true for water supply. A private company that sells water to the public would have ensured every household received enough water to fulfill their needs. The more clients the better as there’s money to be made. What does a government run corporation do? It tries to minimize the use of water by supplying only a few days a week and opening the taps at the most inconvenient times like midnight or 3 in the morning. It’s a shame to see Kathamanduites in the 21st Century lining up for water at the centuries old water spouts. We’re still waiting for Melamchi!
If the government had a monopoly in the tourism industry we probably wouldn’t be making much money from tourism. Private companies vie with each other to bring in more tourists and build their own contacts abroad to capture a larger share of the business. We have seen a large number of expatriates like the late Jim Edwards, Jimmy Roberts, Boris Lissanevitch and many more who spent a lifetime in Nepal establishing new ventures that boosted the Nepali tourism industry. All this would never have been possible without private enterprize.
There is no doubt that privatization is the way forward but strict regulations have to be enforced to ensure quality services. A limited number of players is a must to avoid the kind of mess we have in the name of transport services. Private enterprise and strict regulations is the answer to Nepal’s woes.