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Kathmandu Sunday February 25, 2001 Falgun 14, 2057.
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Hetauda
Textiles to be privatised
By Bijaya Ghimire
KATHMANDU, Feb 24 - The government has initiated
steps to privatise the state-owned Hetauda Textile Industry, the country’s largest
textile industry, which it had closed down on February 12.
A high level official of the Privatization Cell
at the Ministry of Finance (MoF) informed The Kathmandu Post that the privatization
process would be completed within the next four months and the selection of auditors for
the valuation of the industry’s assets was completed Friday.
"The report is likely to be submitted
within the next three weeks," said the source.
The cabinet, a few weeks back had decided to
close the industry from February 12. And the government has already started the process of
clearing employees’ dues. The cabinet also decided to provide Rs. 250 million to
settle the workers’ salaries and wages.
"Steps have been initiated for the release
of Rs 250 million for clearing employees’ salaries and wages," said a high level
official of Ministry of Industry, Commerce and Supplies. "The privatization process
is moving ahead simultaneously."
The official at the Privatization Cell also
disclosed that the government has selected four other industries for the same. The
industries in the pipeline for privatization include Janakpur Cigarette Factory, Lumbini
Sugar Industry, Hetauda Cement and Birgunj Sugar Factory.
The same source disclosed that the government
has decided to restart its failed attempt to privatize Himal Cement Factory. The
government had dropped the idea of privatizing the factory following a low offer during
the last year’s tender call.
This is for the first time since the Nepali
Congress government opted for privatization in 1992 that all the workers of any public
enterprises have been laid-off before the handing over the industry to a private party.
However, the lay-off is not involuntary in the sense that the workers had collectively
demanded to settle their dues and had expressed their willingness to bid goodbye to the
industry.
The government’s decision to lay off
workers stems out from bitter past experience where many such enterprises after
privatization resulted in massive lay-off. The government realized the need to relieve
workers to ensure that the enterprise runs smoothly in private hands. "Hence it was
decided to completely close the textile industry before its privatization," the
official said.
Established over 25 years ago with assistance of
the Chinese government, the textile industry ran into doldrums four years back. It had
gone to complete shut down from December 6 last year. Employees of the industry had
resorted to strikes from January 7, demanding that the government inject Rs 130 million to
kick-start the factory. They had also pressed the government to diversify the industry in
collaboration with some foreign companies.
Decision to privatize one of the oldest textile
factories of the country comes as a renewed effort of the government to move ahead with
privatization policy, which has slacked in the recent years. Despite its pledge to
privatize at least seven public enterprises by the end of 2001, the government has been
able to send only one public enterprise - Nepal Tea Development Corporation- to private
hands.
Their efforts to privatize Butwal Power Company
(BPC) by making it the first ever state-owned power company to go to private hands ran
into controversy after one of the two bidders pulled out of the race last December
alleging irregularities surrounding the deal.
The government restarted the process and now it
is at the final stage. With the evaluation of the technical bid over, now hand-over
process will immediately follow the evaluation of the financial bid.
Despite its avowed commitment towards
privatization, the government still owns 43 such public enterprises. Most of the
enterprises in the industrial, service and social sector are running at losses while those
in the public utility sector are earning profits mainly because they enjoy monopoly of
services.
Till the end of the fiscal year 1998/99, the
government has invested Rs 17.01 billion in equity and Rs 47.27 billion as loans so far.
However, the return on share investment is as low as 2 per cent.
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