Nepal's Ministry of Industry prepares to designate shuttered Bhrikuti Pulp and Paper as 'sick industry,' with benefits such as tax waiver on imports of machinery for expansion, diversification, will move to change law to include privatized companies

Debra Garcia

KATHMANDU, Nepal , January 26, 2014 (My Republica) – Going against the existing law, the Ministry of Industry is preparing to identify Bhrikuti Pulp and Paper Limited (BBPL) as a 'sick industry'.

As per the Industrial Enterprise Act 1992, only the industrial units operating in loss for five straight years and running at 20 percent or less production capacity can enjoy benefits of sick industry. However, privatized industrial units cannot claim the facility.

Sick industries can enjoy facilities like tax waiver on import of machineries for extension and diversification of such industry, among others.

BPPL, which was privatized in 1992 and handed over to Golchha Organization, has remained shut for more than a decade.

Highly placed government sources told Republica that the cabinet has erased a 'clause' on the high-level report on sick industries' to prepare the ground for declaring BPPL a sick industry under the influence of Golchha Organization.

The report had prepared criteria for declaring sick industry and recommended facilities for them.

A source said the clause on 'privatized industries are not eligible for the benefits of sick industry' in the committee's report has been erased. The cabinet led by Interim Council of Minister Khila Raj Regmi erased the clause and sent to MoI for implementation, the source said.

BPPL had applied for sick industry status in the second lot in July last year.

A committee led by Industry Secretary Krishna Gyawali recently decided to recommend BPPL and two other industries for the sick industry status. The industry ministry has forwarded the file to the cabinet for final approval.

Yam Kumari Khatiwada, spokesperson of MoI, said BPPL is not in the list of industries getting the sick industry status. She, however, told Republica that the ministry had sought opinion of the finance ministry on what ground BPPL had been privatized.

Khatiwada is the head of the technical committee formed to recommend the name of sick industries to the industry secretary.

Talking to Republica, former vice-chairman of National Planning Commission Dipendra Bahadur Chhetri Chhetri, who headed the taskforce on sick industries, said there was no point pumping in additional resources on privatized industrial units as the state had provided them lots of facilities during privatization.

The cabinet has yet to take decision on four industries recommended for sick industry status last year. Published by HT Syndication with permission from Republica. For any query with respect to this article or any other content requirement, please contact Editor at htsyndication@hindustantimes.com

(c) 2009 Nepal Republic Media Pvt. Ltd.

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