Thursday, July 4, 2013

Government finally dissolves Janakpur Cigarette Factory, to pay off staff

The government has finally decided to pay off the employees of Janakpur Cigarette Factory (JCF) that has been closed since last two years.
The cabinet meeting today decided to pay off some 758 staffs of Janakpur Cigarette Factory, according to the Ministry of Industry that informed that the cabinet has also dissolved the board of the factory.
The government has, however, formed a committee led by a joint secretary at the Industry Ministry to recommend measures to be taken to manage assets including machinery of the factory.
Though, the state coffer will have to bear Rs 2 billion for the laying off of the staffs including their salaries, gratuity and benefits, it will be a beneficial proposition as the investment in the closed cigarette factory has become worthless due to no output. 
As the employees have been demanding extra gratuity saying that they are retiring prematurely, the government will give them one extra month’s gratuity. “But they will be paid in two installments,” the ministry said, adding that they will get a salary and other benefits in the current fiscal year and additional benefits will be given in the next fiscal year.
Earlier, the Public Enterprises Board (PEB) had suggested the government to pay off the staff and hand over the factory to the private sector, if they can operate it. But the loss-making Public Enterprises (PEs) needs to be either privatised or closed to lessen the burden on state coffer, the study has suggested.
Established in 1965 with the then Soviet Union's assistance, the cigarette factory was once the largest contributor to the government coffer. But regular political bickering and policy confusion hurt the factory's output. 
The study had also revealed that the factory owes Rs 70 million to tobacco suppliers in India and Rs 210 million to Rastriya Beema Sansthan (insurance premiums). Its fixed assets have been estimated at Rs 10 billion.

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