RUSSIAN ASSIST SOUGHT TO REVIVE JANAKPUR CIGARETTE FACTORY

COUNTRY’S SHORTEST
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Kathmandu, 1 April: Ten-year-old Shital Pariyar of Darling-1 Malarani, Baglung, is only 23 inches in height, Nagarik reports.
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RUSSIAN ASSIST SOUGHT TO REVIVE
JANAKPUR CIGARETTE FACTORY
Kathmandu, 1 April: Janakpur Cigarette Factory (JCF) was established with Russian aid in 1964. And, the government is once again preparing to seek assistance from the country to revive the crisis-ridden public enterprise, Prithvi Man Shrestha writes in The Kathmandu Post.
The cash-strapped JCF has not been able to produce cigarettes for the last 10 months and has incurred a cumulative loss of Rs 800 million as of fiscal year 2009-10, according to Finance Ministry.
After receiving positive indication from the Russian ambassador about a month ago, the Ministry of Industry (MoI) has prepared a project proposal, under which the Russian aid will be sought for the installation of new machines and repair and maintenance of old ones.
The ministry has the forwarded the proposal to the National Planning Commission (NPC) for approval and the latter has sought Finance Ministry’s opinion on the proposal.
MoI Spokesperson Yam Kumari Khatiwada said the proposal was prepared after the Russian side expressed interest in extending aid to revive the once lucrative factory of the country. “The Russian ambassador assured support during his visit to the factory along with Industry Minister and secretary about a month ago,” she said.
The proposal was first prepared by the factory management itself and the ministry made necessary amendments to the proposal, according to Khatiwada.
The ministry has proposed a comprehensive reform plan for the factory which will require Rs 2.24 billion. Russia is expected to extend Rs 480 million in grants for machinery, infrastructure and repair, while the government will have to invest Rs 1.76 billion for voluntary retirement schemes (VRS), operation cost and provident fund for employees. As per the plan, the VRS scheme will require Rs 1 billion; operation cost needs Rs 520 million and provident fund Rs 240. A total of 550 out of 833 factory employees are expected to take retirement under the VRS scheme. The factory will make 70 new recruitments.
The proposal has stated that the implementation of the reform plan will yield an estimated benefit of Rs 3.54 billion, against the total cost of Rs 2.24 billion.
The factory has been incurring losses for the last few years. The situation has reached to such an extent that it has not been able to resume operations even after selling its lucrative property in New Baneshwor Kathmandu for Rs 722 million. The factory’s net worth is negative by Rs 705.5 million.
Three general managers recently appointed by the government have so far failed to revive factory although they were appointed under performance contract.
Now, the government has decided to send a MoI under-secretary to head the factory as temporary assignment until a new arrangement is made. The Public Enterprises Directorate Board is expected to make necessary arrangements to appoint new general manager at JCF through free competition.
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