Press "Enter" to skip to content

J&K Cements suffered Rs 1.26 crore loss during Mehbooba Mufti’s rule

Last Updated on January 22, 2021 at 4:08 pm

When politicians try to act like entrepreneurs and manage companies, they fail in most of the cases. But unlike entrepreneurs, if the company fails then these elected representatives in the government don’t have to pay any cost by themselves.

Hard-earned money of the public is used to bailout these failed companies which is collected in the form of income taxes, GSTs and countless others. One another case conforming this endless process of failed government led companies running on public’s money has come before the public’s eye. During the regime of Mehbooba Mufti, Jammu and Kashmir Cements Limited suffered a loss of Rs 1.26 crore.

Between 2015 to 2018, Jammu and Kashmir Cements Limited failed to properly utilise the cement grinding cum- packing unit Samba and market the cement to private parties and government departments which resulted in a loss of Rs 1.26 crore.

The company started producing cement grinding-cum-packing unit Samba from September 2015. The erstwhile state was then being ruled by PDP led government. The company had a capital expenditure of Rs 26.10 crore on the plant till 2017. Around 2 lakh metric tones production of cement was predicted. However, only 34,619 MTs (around 18 percent) cement was produced underutilizing the total capacity of the plant from October 2015 to March 2018 because of low orders.

This low production could be dedicated to the fact that the plant was established without taking note of the demand situation in the industry and company failed to market the sale of cement and get the sale orders from private parties or the government departments. In April 2016, the J&K government directed all the departments to purchase the required cement in order to provide market support for sale of cement manufactured. The government departments could only buy cement from third parties if the company was unable to supply the requisite quantity and provide a non-availability certificate. Even after government’s directions, the company failed to increase its sales and utilise the plant to its best level.

Earlier, Rs 178.19 crore (First year: Rs 51.97 crore; second year: Rs 59.40 crore; third year: Rs 66.82 crore) sales were predicted during first three years of operation of the plant but it could not be achieved. Records accessed by the Early Times show that during the years 2015-16 to 2017-18, the company earned a revenue of Rs 27.13 crore, while it spent Rs 28.39 crore on running the plant, which resulted in operating loss of Rs 1.26 crore.

The plant was under-utilised to 82 per cent of the maximum production capacity and the company failed to generate sufficient amount of supply orders from private parties or government departments which resulted in a direct loss of Rs 1.26 crore.