Srinagar, March 17: The Jammu & Kashmir government, in a reply to a question tabled by MLA Pampore Justice Hasnain Masoodi, in the Assembly, provided detailed reasons for the closure of J&K Cements Ltd. (JKCL), a once-profitable public sector industrial unit.
The government stated that several factors contributed to the decline of JKCL, leading to the closure of all three of its plants since 2019. One of the primary reasons cited was the below-par productivity per employee ratio, which made operations unsustainable. Additionally, frequent power supply issues resulted in production losses due to operational interruptions.
It said that another major factor was the lack of sufficient working capital and improper maintenance of machinery, which caused frequent breakdowns. The company also suffered from external disruptions, including the September 2014 floods, the 2016 unrest, and the COVID-19 lockdown in 2019, all of which led to prolonged shutdowns and financial losses, it said.
Furthermore, JKCL was burdened by mounting liabilities, including unpaid employee salaries, contractor bills, provident fund dues, and GST payments, making its financial position unsustainable.
The government further clarified that JKCL is currently undergoing a strategic disinvestment process, as its revival has been deemed unviable. The administrative Council of J&K, in its decision (No. 113/15/2021) dated October 19, 2021, under the chairmanship of the Lieutenant Governor, approved the complete sale of JKCL and its assets on an “as-is, where-is” basis.
“The sale process involves an e-auction for qualified bidders. The government also addressed concerns regarding dust pollution and emissions from cement factories in Khrew and Khonmoh.
If further stated that J&K Pollution Control Committee (JKPCC) Order No. 41-J&KPCB (2021) dated January 22, 2021, imposed a two-year moratorium on the establishment of new air-polluting industries in these areas.
“After a review on December 20, 2023, the ban was extended indefinitely for cement plants, stone crushers, brick kilns, mining, and hot mix plants until air quality improves.The restrictions will be lifted once the Annual Average Air Quality Index (AQI) falls below 100 or the Comprehensive Environmental Pollution Index (CEPI) score drops below 60,” reply said.
Meanwhile, the government also outlined the measures taken for JKCL employees, ensuring that retiral and pensionary benefits have been included in the revised budget for 2024-25. The 6th Pay Commission benefits have already been implemented for serving employees.
“However, due to JKCL’s poor financial condition and the disinvestment decision, the 7th Pay Commission benefits could not be implemented. The government maintained that the decision to disinvest JKCL was taken as a policy matter and that financial constraints prevented further wage revisions,” it said.
On whether local MLAs and other stakeholders will be consulted before finalizing decisions regarding JKCL, the government did not confirm any specific plan for such consultations.
The government in its reply also provided details of JKCL’s financial records, highlighting declining production and increasing losses over the years. The financial data revealed that JKCL had been experiencing low capacity utilization and declining sales, leading to cumulative losses.
In 2008-09, JKCL recorded a turnover of ₹77.66 crore with a profit of ₹3.7 crore, but by 2018-19, the turnover had fallen to ₹59.33 crore, with losses mounting to ₹42.44 crore.
“In 2019-20, the company’s turnover was a mere ₹20.8 crore, marking a significant decline from its earlier operational years,” it said in its reply.
