Army points out feasibility to revive Hetauda Textile Factory

Kathmandu : Prime Minister Pushpa Kamal Dahal 'Prachanda' today held discussions with the Nepali Army to revive Hetauda Textile Factory.

In a high-level meeting held at the Office of the Prime Minister and Council of Ministers today, the NA briefed the Prime Minister about the feasibility study regarding the resumption of the factory.

The feasibility study follows the government announcement to explore possibilities for reviving the closed industries in the government policies and programmes for the current fiscal year.

The textile factory that was established in 2032 BS in financial and technical assistance of the Chinese government and with the investment of the Nepal government halted its production in 2056 BS. The then royal government in 2059 BS decided to close it.

The study report highlighted the lack of market management,  lack of technology advancement as per the need of time, the power outage issue, overstaffing and the lack of managerial efficiency are among the factors leading  to the closure of the factory. 

The report states about the possibility to reuse some factory structures and machinery after maintenance.  It is stated that NA Welfare Fund has sufficient budget to operate the industry, adding that most of raw materials needed for the factory are available within the country. According to the report, the factory will have no problem for market if revived as the NA is one of the major potential consumer with NA personnel being likely users of garments to be produced by it.  The factory has 166 ropanis of land under its ownership.

As the report states, the revive of the industry is needed to contribute to the national industrial development and to contribute to gross domestic product,  to send a positive message to the world market, to boost up national sufficiency, in import replacement and in the creation of employment opportunities.

The study taskforce has also proposed the outline for re-operation of the industry. The proposed plan along with a three-year work plan has the target of manufacturing approximately 2.6 million metres cloth. A policy decision regarding this would be made in the current fiscal year and the industry would be handed over to the Nepali Army, which will prepare the DPR, and select and purchase new machinery goods.

Similarly, it is stated in the proposed outline that test production would be started in the coming fiscal year by completing the construction of the infrastructure and purchase of machine and equipments. It is stated that the machines would be added, the industry's capacity expanded and regular production started by conducting the feasibility study for the operation of Butwal Spinning Mills and managing the raw materials.

The preliminary cost estimate for re-operating the industry is Rs 1.93 billion and the annual operation cost is Rs 780 million. The taskforce has concluded that the industry will be in a position to make profit, replacing the investment cost, after nine years of its re-operation. 
The taskforce has also proposed for the policy and legal support of the government for the re-operation of the industry.

Speaking in the post-briefing meeting, PM Dahal said the study conducted by the Nepali Army centering on re-operation of the industry is significant. "The Nepali Army has carried out a sound study. I will hold one round of discussions on this at the political level also. A small team can also be formed at the government level for the study. We will take a concrete decision by a meeting of the Council of Ministers after that," he added.

On the occasion, the Prime Minister was of the view that privatization of industries led to the fall in productivity and the shrinking of job opportunities. 

"Government-owned industries were privatized in the past and it would to unexpected results.   The privatization was carried out haphazardly and it weakened the industrial atmosphere at home. The employment opportunities were reduced, forcing the youth force to leave country in the pursuit of job opportunities," the Prime Minister said. 

Deputy Prime Minister and Minister for Defence, Purna Bahadur Khadka, Deputy Prime Minister and Minister for Home Affairs, Narayan Kaji Shrestha, Finance Minister Dr Prkash Sharan Mahat, Minister for Industry, Commerce and Supplies Ramesh Rijal, National Planning Commission's Vice Chair Dr Min Bahadur Shrestha, Chief Secretary Dr Baikuntha Aryal, NA Chief Prabhuram Sharma, government secretaries and NA senior officials were among those present in the meeting.