Nepal | July 04, 2020

MoICS to decide fate of Gorakhkali Rubber Udyog

Himalayan News Service
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Kathmandu, March 27

The government has asked the Ministry of Industry, Commerce and Supplies (MoICS) to decide on the fate of Gorakhkali Rubber Udyog (GRU) — the state-owned tyre company which has remained defunct since 2012.

Writing a letter to MoICS recently, the Ministry of Finance (MoF) has asked the former to conduct a study on whether it would be feasible to revive GRU or shut it down and submit the study report to MoF within a few weeks.

Following such recommendation from MoF, the MoICS has formed a study committee under the coordination of MoICS Joint Secretary Rishi Koirala to decide on the fate of Gorakhkali Rubber Udyog.

“The committee has already visited GRU and is currently developing the report,” informed Janaki Ballav Adhikary, joint secretary at MoICS.

Gorakhkali Rubber Udyog had stopped production in August 2012 after the company underwent cash shortage to purchase raw materials required for tyre production owing to the continuous loss that it had been facing since many years.

MoF has asked MoICS to furnish a report on whether to revive or shut down GRU as the state-owned company has been become a financial burden on the government. Though GRU has stopped production, the company still employs almost 250 staffs and the government has been spending more than Rs 150 million every year on salary to these staffs.

As per MoF, Gorakhkali Rubber Udyog still owes almost Rs 820 million to the government and Rs 180 million to different banks and financial institutions.

 


A version of this article appears in print on March 28, 2018 of The Himalayan Times.


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