JK Cements Ltd Liabilities Cross Rs 300 Cr

by Khalid Bashir Gura

SRINAGAR: Jammu and Kashmir Cements Ltd, a Public Sector Unit (PSU) is crumbling under liabilities as the company has recorded manufacturing losses of Rs 300 crore. Due to lack of funds and raw material, the plant was rendered dysfunctional since July 2019.

The plant was initially closed in 2017 by the Jammu and Kashmir Pollution Control Board owing to leakages and pollution.

Insiders said the overall liabilities have reached Rs 400 crore. It includes Rs 40 crore unpaid salary to the staff for the last 17 months, their CP Fund of Rs 27 crore, retirement benefits due to the employees who superannuated worth Rs 17 crore, DA from sixth and seventh pay commission awards worth Rs 77 crore, unpaid power bill of Rs 16 crore, royalty paid to the Geology and Mining worth five crore rupees. Besides, the liabilities include unpaid supplier bill worth Rs 23 crore and the unpaid bank loan of JK Bank worth Rs crore.

In the recent last meeting of the company’s Board of Directors that met on July 30, 2020, it was decided to revive the Corporation by infusing fresh working capital. Earlier, the government had said that it is exploring ways and means to privatize the company.

The employees said they are unsure which way the administration is planning to take – infusing fresh capital or privatising the company. Recently the hopes were rekindled as the former Lieutenant Governor had directed to Privatize Jammu and Kashmir Cements limited vide order No: (LG)/2020-15 dated 14-01-2020 but on the ground, this decision has not been implemented yet.

The government is indecisive of choosing either of the two options it has identified. The crisis has hit the employees seriously. Battling hunger and starvation, employees are left to fend for themselves.

“People who retired in the last five years have not received even a single penny from the saving of their career. Owing to worsening financial conditions, some employees have deferred the marriages of their wards and are battling with chronic illness,” one former employee said.

Jammu and Kashmir Cements Ltd was incorporated as a fully owned Government Company in 1974. With a capacity of 600 metric tonnes per day, the plant started its commercial production in 1982. Later, the Jammu and Kashmir Government installed another plant of 600 MTs per day capacity in 2008 whose production started in 2010. The factory has an installed capacity of 1200 MTs per day and produces 500 MTs on average. Even though, the average production of the new plant remained always between 150 to 200 MTs per day and never reaches the rated production of 600 MT’s. The New Plant has a manufacturing fault and needs more than Rs 100 crore for modification.

One of the insiders said: “Out of 600, 170 employees are on deputation and more than 430 are surplus. Around 100 employees have retired in the last three years. The Corporation is running another cement plant at Samba where more than 70 employees are working. The Government has deployed 170 employees in different departments while the remaining 430 employees are without a salary since March 2019.”

Since the corporation is planning to revive the plants, the deputed employees worry and suspect if the plant will be able to support and feed them once called back from different departments. “The start of the new plant cannot give employment to more than 200 employees and above them will be termed as surplus. If all will be recalled, the result will be chaos and fuss. If called back to the plant, we may become liability again,” said an insider.

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