FinMin okays Rs 147.5m for Gorakhkali Rubber

GORKHA, JUN 15 -

The Finance Ministry has approved financing of Rs 147.5 million as part of a rescue package for troubled Gorakhkali Rubber Factory as per its business plan. The factory had appealed to the government for help as it had been wallowing in the red for the last few years due to political intervention, labour unrest and weak administration.

“The Finance Ministry has decided to give us the necessary funds,” said Dinesh Bartaula, the factory’s general manager. “The factory will get the money in one to two days.”

According to the ministry, it approved a financing plan worth Rs 200 million as demanded by the factory. “We have already given Rs 50 million,” said Dhundi Pokharel, chief of the ministry’s public enterprise coordination division. The factory has a history of closing and reopening intermittently, and has received funding from the government frequently. However, it has not been able to operate in a self-sustaining way.

Bartaula said that the funds provided by the ministry would be used to buy raw materials and bring reforms in the factory. As the factory has been operating at a loss, it has been hard up to purchase raw materials.  As a result, it has remained closed time and again.

Recently, the factory’s operation was the shut down after it was found that 96,000 l of furnace oil obtained for use in the boiler house was adulterated. Factory workers said that the adulterated furnace oil had caused a fire in the boiler house. The factory resumed operations after purchasing a fresh batch of 60,000 l of furnace oil.

Hetauda Textile’s assets to be handed over to IDML

The government has decided to hand over the assets of Hetauda Textile Factory to Industrial Districts Management Limited (IDML) as it is moving ahead with the process of liquidating the factory. The assets of the factory, which has remained closed for more than a decade, will be handed over as per a ministerial decision of the Finance Ministry made this week.  Hetauda Textile ran up massive losses due to its failure to compete with cheap imported textiles. Its employees have already been paid off. The government’s earlier attempt to re-open the factory yielded no concrete results. The factory’s assets are worth Rs 364.5 million, including land worth Rs 21.9 million, plan and machinery worth Rs 81.4 million and building and infrastructure worth Rs 81.2 million

Source: The Kathmandu Post