Print Edition - 2014-10-15 | MONEY
Nepal Orind handover plan likely to be dumped
Oct 14, 2014-
The government’s plan to hand over management of Nepal Orind Magnesite to a major shareholder the Khetan Group is likely to be cancelled as Industry Minister Mahesh Basnet is not happy with the idea.
The Khetan Group was close to reopening the factory which has been inoperational for a long time, but the handover sequence was halted after the new minister said the plan was against the country’s interest. If reopened, it will provide 800 jobs.
“I have intervened in the decision to hand over the factory’s management to the Khetan Group after finding out that the deal would result in a loss to the government,” Minister Basnet said during a visit to the factory site. “The file that was forwarded to the privatization committee has been held back for now.”
Industry Secretary Uttam Kumar Bhattarai backed Basnet saying that Khetan’s proposal was found to be disadvantageous to the government as per its investment for 10-12 years.
Meanwhile, former industry minister Karna Bahadur Thapa, who had visited the factory last March, said that the proposal submitted by the Khetan Group was the best, and that the decision would benefit the government as well as locals. The local people have complained that a change in policy with every change at the ministry had increased confusion over the revival of the defunct factory.
Former village development committee (VDC) vice-president Jit Bahadur Shrestha said that the locals were eagerly waiting for the factory to resume operations. Recalling that the land where the factory now stands had been surrendered by the locals for a petty amount, Shrestha said that they would grow potatoes on it if the government failed to resurrect the company.
The Nepal government owns 75 percent, Khetan Group 12.5 percent and Orissa Industries 12.5 percent of the company.
“It is better to reopen the factory late than doing something that would cause a loss to the country as well as locals,” Basnet said. “We are planning to introduce a model which will end the tendency of promoting big business houses only. The new model will also promote investors from Dolakha and Sindhupalchok.” He added that there was no clarity on the issue so far.
The magnesite quarry at Lakuri Dada contains an estimated deposit of 18 million tonnes. The deposit is projected to last 100 years. The factory is situated in Makha of Sindhupalchok district. Magnesite is used in the production of refractory bricks for kiln lining, fused magnesia, magnesium metal, fertilizer, animal feed, medicine and industrial chemicals, among various other items.
In 2001, when the company was operating, it was providing employment to 520 people. The factory was established in April 1979 with the objective of producing dead burnt magnesite as per Harbison Walker’s Technology and talc powder. The factory has an annual production capacity of 50,000 tonnes. However, it has not been producing dead burnt magnesite but only talc powder.
Published: 15-10-2014 09:21