KATHMANDU, Feb 20: The government is taking a fresh step to send ailing Janakpur Cigarette Factory (JCF) into liquidation by settling dues of 893 employees who have asked for a concrete pay off plan.
In this regard, the government is soon forming a committee comprising representatives from the government, employees and factory management to study financial situation of the struggling state-owned cigarette producer.
Though the government decided to liquidate JCF last year, it hasn´t materialized in the absence of a concrete pay off plan for workers.
“We are trying to address the demand for voluntary retirement scheme put forth by the employees by forming a committee which will stake stock of assets and liabilities of JCF along with outstanding dues that the factory owes to the workers,” Khum Raj Punjali, joint secretary at the Ministry of Finance (MoF), told Republica.
The Corporation and Coordination Division (CCD) of MoF, which is headed by Punjali, on Tuesday proposed to form a committee to do necessary homework for settling workers´ dues and other necessary works.
"The committee will study assets and liabilities of JCF and calculate fund required to pay off 893 workers,” Punjali added.
The government had announced to liquidate the factory through its Action Plan on Good governance, 2012.
According to Punjali, around Rs 2 billion would be required to pay off the workers. It would cover gratuity, medical and leave benefits.
The employees had originally approached the Ministry of Industry (MoI), seeking golden handshake offer. Later, they had forwarded their demand to the finance ministry.
“Close coordination between the two ministries would be necessary to complete the liquidation process,” said Punjali.
Established in 1965 with the support from the then Soviet Union, the factory had once dominated domestic market with popular brands like Yak, Gaida and Deurali. It, however, lost its market share after its monopoly in the market ended with the entry of privately-run Surya Tobacco Company.
The company reported an accumulated loss of Rs 170.80 million until 2010/11.
Meanwhile, workers, who have been knocking the doors of officials at both the ministries, expressed dissatisfaction over the government apathy toward their demands.
"We are no longer interested in working for JFC. That is why we have been pushing for golden handshake offer,” Arjun Chaulagain, a representative of JCF workers, told Republica.