The government has sold off the physical infrastructure of Biratnagar Jute Mill for Rs 10.3 million giving rise to criticism that it had been undervalued. The jute mill is the oldest industrial establishment in the country.

The mill management committee auctioned the assets spread over 2 bighas and 5 katthas of land after getting the go-ahead from the Ministry of Industry. 

Nirjala Chapagain of Namu VDC in Sankhuwasabha, who has been awarded the contract to demolish and remove the structures, has torn down the dispensary and health post in the first phase. 

Critics of the sale accused the management committee of destroying the country’s historic property for the sake of commission. “The committee sold the property for peanuts lured by commission,” said Himal Sherpa, a campaigner opposing the deal. According to him, the historic property could have been saved if the committee had sold the mill’s property at Hartalihat instead. 

However, Mahesh Hamal, secretary of the committee, said that the property was auctioned under the direction of the ministry. He added that a large part of the mill’s property was lying on private land. 

Most of the mill’s properties including the main gate stood on land belonging to Uttim Lal Yadav which has been inherited by his son Surya Lal. 

According to Hamal, the ministry had directed the committee to sell the infrastructure through a tender after the landowner 

filed a complaint against the government seeking to repossess the land.

The committee had put the value of the land at Rs 5.1 million. Even though two bidders Kamala Subba and Bhim Thapa had offered Rs 11.1 million for the property, the committee decided to sell it to Chapagain for Rs 10.3 million. Hamal said that they had followed all the due process as the lower bidders had a legal problem in their tender documents. 

When the government acquired the land to build the mill, it had acquired around 5 katthas and 16 dhurs of Yadav too. However, Yadav was not compensated for his land although he was assured a rental. In 1959, when Yadav tried to sell his land, the mill filed a writ against him.  

The court ruled that the landowner could sell the land only to the mill and that it should pay appropriate rent for using it. As per the court’s order, the mill had been paying Yadav Rs 15,000 as rent annually till 1976. No payment was made after that. 

Biratnagar Jute Mill, in which the government has a 46 percent stake with the rest of the shares being owned by the public, has been operating in fits and starts due to repeated political intervention. The mill resumed operations last month after the government handed it over to Binsom International Company of Kolkata under a 25-year lease. The company has agreed to pay Rs 13.5 million as rent to the government annually.