Public enterprises to be classified as commercial, strategic entities

KATHMANDU: Public enterprises will now be classified into two categories—commercial and strategic—under the government’s new Public Enterprise Management and Governance Policy, 2025.

According to the policy, which was approved by the Cabinet on September 28, public enterprises operating in sectors that compete directly with the private sector will be categorized as commercial enterprises. Similarly, those established to implement government policies and programs, fulfill national and international commitments, or provide essential services where private sector involvement is minimal or absent will be designated as strategic public enterprises.

The policy also envisions transforming all public enterprises into company-model institutions. “The legal basis for establishing public enterprises will be restructured, and all will gradually be converted into companies,” the policy states.

Other key provisions include separating regulatory and operational functions, ensuring board representation based on share ownership, and fully digitizing the financial transactions of public enterprises. The government’s shareholdings will be dematerialized and transferred under the name of the Public Debt Management Office.

As per the policy, private-sector representation will be ensured in a way that avoids conflicts of interest within each enterprise’s objectives and operations. Moreover, the policy calls for an organizational and management survey to identify and abolish unnecessary or outdated positions.

The policy further outlines plans to prepare new criteria and procedures for appointing officials, amend founding orders, charters, and regulations, and gradually convert public enterprises established under various laws into companies in accordance with the Companies Act, 2063 (2006).

Of the 45 public enterprises currently in operation, 20 are fully government-owned, while 25 are majority-owned by the state. Similarly, six enterprises are not engaged in any business activities, while two are inactive. Among those in operation, 28 are running at a profit, while 15 are incurring losses, according to government data.