Though Ministry of Industry (MoI) has proposed to the Ministry of Finance (MoF) to address demands of workers of Janakpur Cigarette Factory (JCF), the finance ministry has put aside the proposal citing budget crunch.

The workers, among others, are demanding voluntary retirement scheme (VRS).

“We have requested the finance ministry to take a decision on the workers´ demands even if it cannot allocate money for the purpose in this fiscal year,” Jit Bahadur Thapa, joint secretary at the industry ministry, said. “At least the government should be clear on how much amount of money is required to relive the workers.”

The finance ministry about two months ago formed a team to valuate property of the ailing cigarette maker. The team has valued JCF´s assets at around Rs 10 billion.

The government will have to allocate Rs 2.6 billion to meet all the demands of the workers. But the government can pay off the workers by paying only around Rs 1.26 billion.

“We have asked the finance ministry to decide on the issue at the earliest,” Thapa said, “It is meaningless to keeping the workers on payroll without any production activity in the factory.”

Finance ministry officials have already indicated that it won´t be possible to address the demand of the workers in this fiscal year because of budget crunch.

“We have already informed the workers that it won´t be possible to launch voluntary retirement scheme in this fiscal year,” said Thapa.

JCF, which was established in 1965 with the support of the Russian government, used to make produce popular brand of cigarettes like Yak, Gaida and Deurali. It started incurring loss with the entry of privately owned Surya Tobacco. The factory had cumulative loss of Rs 170.80 million as at 2010/11.

Published on: 11 May 2013 | Republica