KATHMANDU, Feb 1: Prime Minister Pushpa Kamal Dahal discussed the issue of reopening the ailing Hetauda textile industry with the Nepalese Army.
PM Dahal organized a high-level discussion at the office of the Prime Minister and Council of Ministers on Wednesday and took a briefing on the feasibility study conducted by the Nepalese Army for the re-operation of the textile industry.
The Nepalese Army conducted the feasibility study of re-opening such industries in line with the policies and programs of the Government of Nepal for the fiscal year 2023/24.
Established in 2032 BS with the financial and technical support from the Chinese Government and investment from the Government of Nepal, Hetauda Textile Industry (HTI) saw its production halted in 2056 BS. Subsequently, the royal government at the time opted to shut down the industry in 2059 BS.
After the incumbent government led by Dahal included the subject of re-operation of the closed industries in its policies and programs, the Nepalese Army studied its prospects. The summary of the report was presented by the Nepalese Army to the prime minister on Wednesday.
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The study report concluded that the industry was forced to shut down in the past due to lack of market management, timely modernization of technology, situation of load shedding, financial burden due to excessive manpower and lack of managerial capacity.
The report mentions that some of the existing structures and machines of the industry can be repaired and put into operation again. The army said the budget of its military welfare fund is sufficient for the operation of the industry.
According to the report, 166 ropani land is still in the ownership of the industry, the minimum infrastructure required for the industry is in place, and most of the raw materials for the operation of the industry are available.
The report clearly states that the required materials are available within the country and there is no problem for the market as the industry can sustain by fulfilling the demand for clothing for government employees including the Nepalese Army.
The report has also mentioned the necessity and justification of the re-operation of the industry according to which re-operation of the industry will maintain the industrial credit of the past, contribute significantly to the development of the country's industrial sector and gross domestic product, send an industrial message to the world market, increase self-reliance, and stop migration of youth.
The study report has also proposed the modality of re-operation of the industry. The modality with a three-year work schedule proposes a policy decision in the fiscal year 2023/24 to transfer the industry to the Nepalese Army, the preparation of DPR, the selection and purchase of new machinery for the production of estimated 2.6 million meters of cloth.
Likewise, as outlined in the proposed plan for the fiscal year 2024/25, the modality specifies that following the completion of infrastructure construction and the acquisition of machinery and equipment, trial production will commence.
Similarly, for FY 2025/26, the proposal entails the addition of further machinery, expansion of industry capacity, feasibility studies for the operation of the Butwal yarn industry, procurement of raw materials, and the initiation of regular production.
The report estimates the initial cost for the re-operation of the industry at Rs 1.93 billion, with annual operating expenses projected at around Rs 780 million. The study concludes that the industry is anticipated to become profitable upon re-operation, with costs recouped within a span of nine years.
The study group has also recommended policy and legal support from the Government of Nepal for the re-operation of the industry according to which, there should be cooperation in the policy and legal process for the re-operation of the industry, the ownership of the industry should be transferred to the Nepalese Army. After changing the responsibilities, there should be a policy arrangement so that the consumption of clothes produced by the industry should be done by government agencies, etc.
Speaking at the meeting after the briefing, PM Dahal said that the study done by the Nepalese Army is vital for the re-operation of the industry.
PM Dahal said, “The Nepalese Army has studied well. I will discuss this at a political level as well. For the study, a small team can be formed on behalf of the government. Then we will take a concrete decision from the cabinet meeting.”
The meeting was attended by Deputy Prime Minister and Defense Minister Purna Bahadur Khadka, Deputy Prime Minister and Home Minister Narayan Kaji Shrestha, Finance Minister Dr Prakash Sharan Mahat, Minister of Industry Ramesh Rijal, National Planning Commission Vice Chairman Dr Min Bahadur Shrestha, Chief Secretary Dr Baikuntha Aryal, Nepali Army Chief of Army Staff Prabhuram Sharma, Secretaries of various ministries of the Government of Nepal and senior officials of the Nepalese Army.
