Rs 1.47b interest waiver for 10 sick industries

KATHMANDU, JUN 15 -

Ten industries that were declared sick around a month ago will get interest waiver of around Rs 1.5 billion.

The Ministry of Industry’s recommendation, which the Cabinet approved while declaring these industries sick, has sought interest waiver of Rs 1.47 billion.

The industries are Nepal Boards Limited, Bara; Birat Leather Industries, Hetauda; Birat Shoe Industries, Kathmandu ; Basulinga Sugar and General Industries, Kailali; Sumi Pharmaceuticals, Nawalparasi; Fluer Himalaya, Birgunj; Shree Antu Tea Industries, Ilam; Gaida Wildlife Camp, Chitwan; The Fulbari Resort, Pokhara and Dolphin Manor Hotel, Bardia.

Of them, Fulbari Resort will get the highest interest waiver of Rs 616.35 million, followed by Basulinga Sugar and General Industries (Rs 364.93 million) and Nepal Boards (Rs 193.76 million).

Besides waiving bank interests, the industries will also receive facilities such as credit restructuring, fixation of appropriate interest rate, extension of loan repayment, waiver of the interest until the restructuring period, waiver of penal interests and capitalised interests, among others, based on their business plans.

The loan will be restructured by converting principal into soft loans. They will be able to enjoy such soft loans until the next three-five years, and after that, they will have to do transactions as per the rules of the banks concerned.

The lenders will be able to reduce the size of the principle by selling collaterals based on consensus with the borrowers.

Interest and fines will also be waived off if the sick industries pay outstanding tax liabilities and fees.

If the sick industries have

been blacklisted by the Credit Information Bureau, they will be de-listed. Although the government and the Nepal Rastra

Bank have long been providing concessions to sick industries , hardly any of the industries has revived so far.

Given this context, the government decided to give the massive facilities to them to ensure their revival.

However, the government’s failure to abide by the Industrial Act while declaring the 10 industries sick has ignited controversy. The Clause 25 (A) of the Industrial Act has mentioned that only industries suffering losses for five years in a row and running at less than 20 percent capacity are eligible for the status of sick industry.

However, the report endorsed by the Cabinet does not mention the capacity utilisation status of eight of the 10 industries.

Already shut industries have also been declared sick although the Act talks about giving such a status only to industries that are in operation.

Industry Ministry Spokesperson Yam Kumari Khatiwada, who is also the member of a technical committee formed to study the details of the endorsed sick industries , has said the industries were declared sick based on the Industrial Act 1992, and that they will have to go through several other processes to get the facilities.st waiver for 10 sick industries

Source: The Kathmandu Post