POKHARA, Nov 14: The government has started preparation for privatizing Gorakhkali Rubber Industry.
Minister for Industry Nabindra Raj Joshi told media persons in Pokhara on Sunday that the government cannot inject funds in the loss-making entity forever. “Private sector has expressed interest to run the industry. Instead of losing money every year, it is better to handover the company to the private sector,” Joshi added.
He, however, said that the government has not selected any firm to run the rubber factory so far.
The factory based in Majuwa Deurali of Gorkha has been making loss for the past many years. The government has to allocate huge amount of money every year to pay salary of its idle staffers. Altogether 289 employees are on the payroll of the factory which stopped production many months ago.
Monthly loss of the tire-maker is in tune of Rs 10 million. It has accumulated loss of more than Rs 1 billion.
“As we are not in a position to resume operation, we will begin lay-off of employees very soon,” Joshi said, adding that he has already discussed the matter with the factory management and that its board members have agreed to resign.
The industry stopped operation about a year ago due to lack of raw materials.
Unlike other privatization practices of the past, the government will rent out infrastructures to the private sector. “We will not sell the land. The private sector will not be able to borrow money from banks by pledging factory land as collateral,” added Joshi.
The factory is spread over 640 ropani.
“We will clear all liabilities of the factory and hand it over to a capable firm,” he added.
Though Joshi said some foreign firms are interested to take reins of the factory, he did not disclose them.