Please tame other white elephants too!
Disinvestment of JKCL
In a landmark decision the Jammu and Kashmir Union Territory administration has approved a proposal for disinvestment of Jammu and Kashmir Cements Limited. The decision was made in the highest decision making body – Administrative Council chaired by Lt. Governor, Manoj Sinha. The decision was made as the government owned company was not able to sustain and manage its finances properly and maintain efficiencies of operations over the period of time. 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 and despite enjoying economy of scales, the company failed to show requisite growth and generate cash flows and operating margins during the last more than two decades.
It goes without saying that the governments, that be, never ever took any steps to make this company or, for that matter, other government owned corporations efficient in the direction of revenue generation and collection. Take, for instance, state road transport corporation and its operations. Despite having huge fleets of buses and trucks and also the manpower, the corporation has not been able to earn what would have been expected. Same is the case with Jammu and Kashmir Tourism Development Corporations. It too has failed to make any marks vis-à-vis helping J&K’s economy. JKTDC has properties at prime locations in entire J&K much better than private hotels and guest houses. But fact of the matter is that mismanagement of these assets have rendered the same un-usable. These properties are not properly managed neither are run on professional lines. Result, tourists prefer to rent out private properties despite appreciating the scenic locations where JKTDC properties are available.
Same is true about J&K Cements Limited. The company, as observed by the Administrative Council and known to the people here, despite having assured demand from government against advance payments has not grown even marginally over the long period of time and has shown sharp decline in its production and revenues from 2012-13 onwards. Managerial and financial inefficiencies, coupled with failure to exploit locational advantage, has made the company defunct further depreciating plant and machinery without any resultant productivity. It was further observed that the company had not only accumulated losses but was also burdened with liabilities on account of salaries and outstanding wages and payments in addition to default in statutory deductions like CP fund, GST, etc.
Jammu and Kashmir has been victim of turbulence from past more than three decades. These turbulent times have had a very serious toll on the economy here. However, the governments, that be, continued with the operation of companies like J&K Cements Limited which have proved white elephants. Earlier, such companies and other almost-non-performing-corporations were not touched and allowed to run, despite resulting into losses to the economy, because these were the places where the then rulers would accommodate their blue-eyed-boys & girls.
Now that the UT administration has taken a major step to not pump into more money into a dead company, it should also focus on other corporations and see why these can’t perform better having all the necessary and requisite infrastructure and budgetary provisions at their disposal. J&K’s economy is struggling to breathe, it can’t afford to have white elephants like J&K Cements Limited sucking whatever wealth it has.
