Govt unlikely to meet pay demands of Janakpur Cigarette workers

The government may not fulfill all the demands of employees of Janakpur Cigarette Factory on golden handshake, a team that recently conducted a study on the state-owned enterprise´s status has indicated.
"The government is positive about demands placed by workers but it may not be able to fulfill all of them," an official at the Ministry of Finance (MoF) told Republica. "The government will sit again with workers--who are anticipating early launch of the voluntary retirement scheme--to settle the issue.”
According to the official, it will cost the government around Rs 2.6 billion to provide severance package to employees who want to voluntarily retire from their jobs. This amount is higher than Rs 1.26 billion derived by the government based on existing rules.
The MoF had earlier formed a team to assess economic viability, liabilities and assets of the company after workers started putting pressure on the government to relieve them from work at the factory which has remained closed for two years.
The team that comprised representatives of trade unions at the company had valued the company´s assets at around Rs 10 billion. "The total outstanding liability of the company stands at around Rs 2.3 billion," said Hari Sharan Pudasaini, an MoF under secretary, who is also the coordinator of the team.
Employees at the factory had voluntarily asked the government to relieve them from work last December and pay them as soon as possible. The workers had first placed the request at the Ministry of Industry (MoI), which later forwarded it to the MoF.
According to Arjun Chaulagai, one of the workers at the company, Finance Minister Shankar Prasad Koirala has also expressed verbal commitment to settle the issue as soon as . "I will immediately take a look at the report prepared by the committee and try to settle it," Chaulagai quoted the finance minister as saying.
The company that was established in 1965 with the support of the Russian government used to make famous brands of cigarettes like Yak, Gaida and Deurali.
However, with the entry of Surya Tobacco, its near monopoly in the tobacco market ended and it started incurring losses. By the end of 2010/11, the company had accumulated cumulative loss of Rs 170.80 million.
The company has cited use of obsolete machines for its collapse. But in addition to that unnecessary political intervention in operation of the factory, interference in appointment of the factory´s chief and overstaffing have also led to the failure of the company.