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Govt privatises brick factory, contracts out spinning mill
KATHMANDU, JAN 07 - Ending a long-running privatisation saga of state-owned Bhaktapur Brick and Tile Factory, the government formally handed over the factory to RRP Enterprises for a period of 10 years.
A government communiqué stated that the RPP Enterprises bagged the contract by quoting Rs 39.3 million based on Net Present Value. Of the amount, the enterprises has agreed to pay Rs 14.56 million for existing machines and spare parts and remaining Rs 24.73 million as the lease amount of land and building for a period of 10 years.
An agreement to this effect was singed jointly by Bhanu Prasad Acharya, Secretary at the Ministry of Finance and Dinesh Chandra Pyakurel, Secretary at the Ministry of Industry, Commerce and Supplies on behalf of the government while Raghu Ram Pradhan inked the agreement on behalf of the RPP Enterprise.
Finance Minister Prakash Chandra Lohani and Minister of Industry, Commerce and Supplies Hari Bahadur Basnet were also present on the occasion.
The communiqué issued on the occasion also confirmed that the buyer has made a full payment for the machine and spare parts and first year’s lease amount of land and building amounting Rs 2 million.
Earlier, a committee formed to evaluate financial bidding submitted by the three aspirant private parties, which were selected during the evaluation of technical bidding, had named RRP Enterprises as the preferred bidder on the ground of financial analysis based on Net Present Value.
Of the seven private parties that had competed to acquire the factory, a committee formed by the privatisation cell at the Ministry of Finance had selected the technical bids of Subarna Das and Groups, Bala Ram Neupane and RRP Enterprises allowing them to compete for the financial bidding.
The BBTF, which was built in 1979 with the financial and technical assistance from the government of China, was one of the most successful state-owned ventures till 1992. But the frequent political intervention and overstaffing eroded the financial condition of the factory.
On the same occasion, the government also handed-over the management of state-owned Butwal Spinning Mill to Salt Trading Company. Dinesh Raj Battarai, Chairman of the Mill and Parameshore Mahaset, Chief Executive Officer of the STC singed the agreement on their parts.
As per the agreement, the government and the STC have been agreed for equal sharing of profits. However, the STC will have to pay at least Re 1 per kg to the government as the managerial charge.
Besides bearing all the previous liabilities of the Mill, the STC will make necessary investments required to upgrade the production of the Mill.
The production of the factor currently stands at 5 tons per day and the STC is planning to upgrade the daily production to 15 tons per day in near future.
Speaking on the occasion, Finance Minister Lohani said both of the hand over were made as per the privatisation policy of the government and assured full support of the government for the successful operation of the privatised companies. Posted on: 2004-01-08 03:15
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