Staff of shuttered JCF still waiting for severance pay

THE Cabinet decided three weeks ago to pay off the employees of Janakpur Cigarette Factory (JCF) and close it down, but they are yet to see any of the money. Payment has been held up because the Ministry of Industry hasn’t been able to work out how the severance pay should be distributed to the factory’s 758 workers. “Though the Ministry of Finance has allocated funds to pay off the staff, we have yet to decide who should distribute the amount and how,” said Rishi Raj Koirala, head of the Technology Division at the Industry Ministry. He added that they needed another eight to 10 people to distribute the money and provide security at the factory. “The Finance Ministry has allocated funds under several titles including medicine, remuneration, gratuity and allowance,” added Koirala. “But we do not have any basis to determine how much and under what heading each employee should be paid.” Koirala said that an official should be authorised to check the accounts of the factory in order to fix the amount of the payment. “We have asked the Finance Ministry to provide an additional Rs 20 million for security arrangements, but it has not responded so far,” he added. However, Finance Ministry officials said that their job was only to provide the necessary budget, and that the management aspect was the responsibility of the Industry Ministry. “The Cabinet has asked the Industry Ministry to start the payment process by delegating authority to a joint secretary,” said Dhundi Raj Pokharel, chief of the PEs Division at the Finance Ministry. The government has estimated over Rs 2 billion will be needed to pay off the JCF staff. An official of the Public Enterprises Section at the Industry Ministry said the Finance Ministry had provided Rs 1.36 billion in the first instalment to pay the salaries of the employees. The Finance Ministry will need to arrange Rs 520 million for the second instalment. Among other benefits, the employees will be given a gratuity equivalent to one month’s salary under the severance package fixed by the government. An Industry Ministry official said that the government had not decided if payment should be made to employees who have retired without receiving retirement benefits. “A sum of Rs 251 million will be required to pay the staffers who have already retired,” he said. Three months ago, the Public Enterprises Board (PEB) had recommended that JCF be closed and its staff paid off because the troubled stateowned enterprise was deemed to be beyond rescue. JCF’s liabilities include Rs 500 million in bank loans and Rs 120 million in government taxes. It owes hefty sums to suppliers of raw materials, including Rs 70 million to suppliers in India. It has to pay Rs 210 million to Rastriya Beema Sansthan in insurance premiums, according to the PEB report. The PEB has valued JCF’s fixed assets at Rs 10 billion.