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RRP bags Bhaktapur Bricks Factory
KATHMANDU, DEC 18 - Government has decided to lease out the Bhaktapur Bricks and Tiles Factory (BBTF) to RRP Enterprise and lay off all 354 staff on 15 January 2004 to pave way for early hand over of the state-owned brick factory to the private party.
Such decisions along with the decision to settle all outstanding accounts of the factory by mid-January next year was taken in the recent meeting of the cabinet.
The privatisation committee, through bidding, had selected RRP Enterprise as the winner for the final hand-over of the factory and had forwarded its proposal to the cabinet for the approval. The company, owned by Raghu Ram Pradhan, has agreed to pay Rs 274 million as the lease amount for a period of ten years.
"Moreover, the cabinet has pledged a budget of Rs 160 million to the factory officials to clear its outstanding financial liabilities," said government sources. According to factory officials, the BBTF owes over Rs 150 million to the staff as salary and perks and this include outstanding liabilities that it require to pay to 44 staff who were laid off earlier.
The cabinet has also decided to pay one month’s salary equivalent to number of service years to the employees while laying them off.
Of other major financial burdens, the BBTF has a liability of about Rs 1 million to the public in the form of advance payment for the bricks supply, which were not fulfilled due to the closure of factory and other reasons.
Sources further told The Kathmandu Post that the factory would soon issue a notice calling the people that owes money to the factory to collect back their amount within a specific time to be decided shortly.
Following the decision, the Ministry of Finance has already released Rs 120 million, said officials, further adding that procedures to release remaining amount too has already been initiated.
The BBTF had shut down its production from June this year, about two months after the government decided to expedite its privatisation process, when its property evaluation was done. But, staffs were still to be laid off due to delay in decision and release of budget by the government.
"And such a delay, which accumulated staff liability for over six months, has cost the government additional sum of around Rs 60 million," said sources. They further noted that the government is still to clarify the modality as to how the factory would be handed over to the RRP Enterprise.
The BBTF was established in 1979 under the technical and financial assistance of the Chinese government. It has a capacity to produce around 15 billion units of brick per year. It was one of the most successful state-owned ventures till 1992. But since then, frequent political intervention and overstaffing eroded the financial condition of the factory, resulting a series of heavy losses over the years.
Earlier, the government had contracted out the management of the factory to a private party in mid-nineties, but was compelled to take it back after the contractor failed to run the factory as per the agreement signed with the government.Posted on: 2003-12-19 03:35
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