J&K administration approves disinvestment of JKCL

The J&K Cements Limited was has not been able to sustain despite having dedicated limestone mining leases at its disposal.

Srinagar:The Jammu and Kashmir administration led by Lieutenant Governor Manoj Sinha on Sunday approved the proposal for disinvestment of Jammu and Kashmir Cements Limited (JKCL). The decision was taken by the Administrative Council (AC), which met in Srinagar under the chairmanship of Lieutenant Governor Sinha.

Rajeev Rai Bhatnagar, advisor to the Lieutenant Governor and Dr Arun Kumar Mehta, Chief Secretary, J&K, attended the meeting. An official statement said the disinvestment in J&K Cements was necessitated as the company was not able to sustain and manage its finances properly and maintain efficiencies of operations over the period of time.

The statement said the company was also not able to fully exploit the potential and sustain stiff competition in the market despite having dedicated limestone mining leases at its disposal. "The company despite having assured demand from the government against advance payments has not grown even marginally over the long period of time and has rather shown a sharp decline in its production and revenues from 2012-13 onwards".

As per the official, managerial and financial inefficiencies, coupled with failure to exploit locational advantage, have made the company defunct further depreciating plant and machinery without any resultant productivity. The company had not only incurred losses but also been burdened with liabilities on account of salaries and outstanding wages and payments in addition to default in statutory deductions like CP fund, GST etc, he added.

Earlier, the Administrative Council vide its decision No. 113/15/2021 dated 19.10.2021 had given in-principle approval for the complete sale of J&K Cements Limited by exploring the option of ascending e-Auction and authorisation to utilise 240 kanals of land adjacent to Khrew Plant at Industrial Estate.

The interested bidder should have a minimum net worth of Rs 250 Crore. Key principles and actions underlying the recommended disinvestment modality include 100% ownership in JKCL in favour of a private company/consortium. Furthermore, all the assets of JKCL on an as-is-where-is basis, along with approvals and licences (including mining licence) will be transferred as part of the share purchase sale.

It was further decided that the Government of J&K will take over all employees of JKCL and the acquirer will be responsible for staffing requirements to get the plant operational. While disinvesting, it shall be ensured that the provisions of the Mines and Minerals (Development and Regulation) Act, 1957and the rules framed there under are not violated in any case.

It was also decided that the process of reverse auction will be adopted for the purpose of disinvestment. The step was expedient as the company has turned defunct for more than two years. The attempts of reviving the company have failed in absence of fund flow that could have paved way for the revival of the Company.