UPDATE FIRE PUT OUT AT SHORE OF CG INDUSTRY Kathmandu, 15 Oct. The massive fire at CG Industry was brought under control shortly before 11 in the morning Monday. Firefighters and police worked all night to douse the fire/ Embers are being put out. Official cause of the fire or damage estimate isn’t yet available. Unofficial damage estimate is put at more than Rs1 billion. nnnn JFC VALUED AT RS.10B Kathmandu, 15 Oct. :Janakpur Cigarette Factory (JFC) has remained closed for the past one and a half years due to lack of working capital, but it is one of the richest public enterprises in terms of the value of its physical assets. The Public Enterprise Board (PEB), which has been studying how the company can be brought back to life, has estimated the value of its fixed assets at Rs 10 billion, The Kathmandu Post reports.. Paradoxically, the factory has long been dependent on the government to pay salaries to its staff. Last August, the government gave the factory Rs 100 million to pay its employees who have been hanging around doing nothing. According to the PEB, Janakpur Cigarette owns land and buildings in 18 locations in the country from Biratnagar in the east to Mahendranagar in the far west. The largest plot of 33.5 bighas is situated in Janakpur. It also owns land in Nepalgunj, Butwal, Dhangadhi, Dang, Surkhet, Gaighat, Narayanghat, Mahendranagar in Dhanusha, Birgunj, Pokhara, Galkot, Baglung, Kusma, Parbat, Dadeldhura, Jomsom and Musikot of Rukum. Last year, it sold its property at Naya Baneshwor, Kathmandu to the Citizens Investment Trust (CIT) for Rs 722 million, but the money was not enough to get the factory back on its feet. “Being rich only in fixed assets does not show the strength of any enterprise,” said PEB chairman Bimal Wagle. “The enterprise should operate well.” According to the PEB, Janakpur Cigarette has not been running well for a long time, and it has been closed for a year and a half, resulting in losses of Rs 381 million in fiscal 2011-12. The factory lost Rs 218 million in the previous fiscal year. The factory’s liabilities to the government, banks and suppliers stand at Rs 2.5 billion. It owes Rs 1.39 billion in salary, medical allowance, gratuity, retirement benefit and provident fund to its staff. It has not paid retirement benefits of Rs 650 million and medical benefits of Rs 270 million to its employees. Likewise, it owes Rs 70 million to tobacco suppliers in India, Rs 350 million to different banks and financial institutions and Rs 210 million to Rastriya Beema Sansthan in insurance premiums. It also owes the government Rs 300 million in outstanding loans, according to the PEB report. Meanwhile, the PEB plans to advise the government to involve the private sector in the operation of Janakpur Cigarette Factory . Once upon a time, it was one of the best performing public enterprises in the country. “We at the PEB have reached a general consensus that there should be private sector involvement in the factory,” said PEB member Rajeshwar Prasad Sharma. “The private sector’s involvement might be in the form of selling off the factory’s assets, selling part of the assets, particularly the factory alone, and public private partnership.” He added that the PEB felt that it would be morally wrong for the government to run the cigarette factory as it should be working to improve public health, not ruin it. There have also been attempts to seek assistance from Russia, with whose aid the factory was set up in 1964, to reopen it. As per the recommendation of the factory management, the Industry Ministry had even prepared a proposal and sent it to the National Planning Commission and the Finance Ministry to ask Russia for help. They rejected the plan as it also involved massive government investment. nnnn