Bedraj Pooudel

BIRATNAGAR, July 29: After Indian and Bangladeshi companies expressed interest in resuming operations at Nepal's first industry, Biratnagar Jute Mill, the government is preparing to form a board of directors and hold a general assembly. The government has started homework to collaborate with private companies after Tata Group of India showed keen interest in operating the jute mill and also conducted a technical study.

The government has appointed Rajendra Karki as the chairman of the newly formed five-member board of Biratnagar Jute Mill. Members include Tikaraj Dhakal, Mukunda Prasad Nepal, the head of the Treasury and Finance Comptroller Office, and the head of the Commerce Office. On January 15, 2010, the industry, which had gone on 'payoff,' retained 40 employees under contract for re-operation.

Chairman Karki stated that a technician from Tata company studied the mill for about 20 days. He emphasized the need for reliable private sector investment alongside government efforts. A general assembly has been called for October to discuss the mill's operation. Tata, already operating a jute mill in India, has shown interest in the Biratnagar Jute Mill.

According to Karki, 70 percent of the jute mill's machines are operational. Previously, it was costly to operate up to 60 looms with a single high-capacity motor, but now each loom will have its own motor, increasing production efficiency. The loom has been successfully tested with the new system, allowing individual looms to be stopped without affecting others.

Until 1995, the jute mill made an annual profit of Rs 280 million, operating round the clock in three shifts, producing 45 tons of jute products daily, and providing jobs to 3,600 individuals. The government owns 68 percent stakes of the jute mill and the private sector owns 32 percent. Accounts Officer Shyam Kumar Lama noted that the industry owes contract employees Rs 40 million in salaries, which must be paid before operations can resume.

The closed jute mill has debts of Rs 5.42 billion. The jute mill was established with loan investments from Rastriya Banijya Bank, Nepal Bank, Udayapur Cement Factory, and others. Unpaid taxes since 1981 amount to Rs 210 million. The mill, which was closed for six years, appointed a new board of directors on June 11, 2024. Board member Dhakal mentioned interest from Bangladeshi companies in operating the mill using raw jute brought through Phulbari port.

If operational, the mill could employ around 3,000 people. Manoj Khadka, an activist and former mill employee, expressed concern over land encroachment and unauthorized construction on the mill’s property. The mill still has 69 bighas of land in its name, though much has been encroached upon by individuals.

In 2008, Utim Lal Yadav took 2 bighas, 5 kathas, and 16 dhurs of land in his name and sold it. According to Khadka, there are 45 bighas of land inside the mill compound and additional land in various locations, all encroached upon by people.