Govt seeks Rs 1b from Russia to retrofit Udayapur cement

The Ministry of Industry is seeking to get Rs 1 billion from the Russian government in the form of grant to replace the degraded machinery equipment at Udyapur Cement Factoy (UCF), the country´s largest state-owned cement factory.
The ministry is all set to make the request through the Ministry of Finance (MoF).
"We have finalized our homework to approach MoF in order to forward the request to the Russian government," Uma Kanta Jha, secretary of MoI, said. "We will request for grant assistance, if not soft loan would be okay with us."
The ministry has already asked grant for Janakpur Cigarette Factory (JCF) from the Russian government.
"The loan that we are looking for from Russian government is solely to replace machine equipment parts," Jha said. "That will help to upgrade production."
The machineries in the factory are 18 years old. The latest annual report on public enterprises has recommended changing the equipment of the factory, which was established in 1987.
"After this problem is solved we can think of other problems in the factory," Jha said.
The factory, which has 549 permanent employees, frequently faces labor-related problems. As per the annual report on public enterprises, the government has failed to address these problems.
"The factory is in the loss due to the problems related to money, machine and man (3M)," the annual report on public enterprises states. "Interference of trade union is high in the factory."
The factory, whose board members and chief are politically appointed, incurred loss of Rs 879.84 million in 2010/11 and has a cumulative loss of Rs 17.73 billion.
According to Jha, the government will work on addressing the labor related problems after injecting the fund that is anticipated to come from the Russian government. "We are trying to revitalize the public enterprises," Jha said. "The Russian government itself is interested in extending the grant in order to upgrade the situation of state-owned factories."
The factory has audited its financial report only till 2004/2005. According to statistics, the factory is yet to pay Rs 17.4 billion of principal amount and Rs 8.02 billion in interest to the government. "The factory needs other additional investment as well," Jha said. "Replacing machinery parts is a step toward it."
The factory also lacks proper management of human resources. "The factory lacks good governance," the government report itself says, "The chief of the enterprise even does not get the job description."
Moreover, the factory which is facing the shortage of power even does not have any back up support to offset problems created by load shedding.