Revival of Hetauda Textile Factory viable: Reports

Published On: December 14, 2016 07:40 AM NPT By: Republica  | @RepublicaNepal

 KATHMANDU, Dec 14: Separate study committees have suggested to the government to breathe a new life into Hetauda Textile Industry.

Officials of the Ministry of Industry (MoI) privy to the issue told Republica that three security agencies -- Nepal Army, Armed Police Force and Nepal Police -- will be asked to invest Rs 100 million to run the mill so that it can produce uniforms for their personnel as well as civil servants. 

The government has been paying civil servants Rs 10,000 every year as uniform allowance.

A study panel led by Puskar Raj Bajracharya, a former member of the National Planning Commission (NPC), has already suggested reviving the industry. Similarly, a new study report prepared by a textile engineer of Nepal Army also says that revival the textile mill will be economically viable. 

The state-run mill, which has already been liquidated, used to import raw materials and produce clothe by knitting and weaving. 

Both the study reports say that knitting would not be possible as knitting units of the mill cannot be restored. 

“Preparation is underway to breathe new life in the textile mill. Three security agencies will jointly operate the mill,” Minister for Industry Navindra Raj Joshi said.

However, the operation modality has not been finalized yet. 

Last year, the erstwhile industry minister Som Prasad Pandey had permitted the Nepal Army to run a garment industry based in Kalikasthan, Kathmandu, for producing uniform of army personnel. 

Textile mills were among the first factories set up in Nepal. But these mills could not sustain themselves due to entry of cheaper imports in the market. Recently, Patanjali Ayurved Pvt Ltd set up its plant in the land and buildings of Annapurna Textile Limited which was shut two decades ago.

The plan to involve security agencies to revive the textile mill without conducting market assessment has drawn criticism. Critics say that the mill may not sustain itself in this liberal market as it cannot get government protection like in the Panchayat era.

Hetauda Textile Industry is not the only public enterprise that the government is reviving.

Nepal Drugs Limited is in the process of resuming its operation. It has already started repair and maintenance of its machineries. Similarly, the government has begun process to hire a general manager for the drug manufacturer.

Likewise, the Ministry of Industry is preparing to lease out land and other assets of Butwal Spinning Mills to a private party through bidding. The private party, however, will not be allowed to pledge the asset as collateral to receive loans. 

Minister Joshi has already said that there was no alternative to privatizing loss-making Gorakhkali Rubber Industry.

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