Govt bailout move for lone granite company

The government has taken up a financial restructuring plan for the cash-strapped Madhyapara Granite Mining Company Ltd (MGMCL) that has gone deep in debt for cost overruns, officials said.  
Under the bailout initiative, a five-member committee has been formed to review its overall liability, production of granite, sales and earnings and expenses for financial restructuring of the agency.
The committee has to submit its review report within a month, they said.
Petrobangla (Bangladesh Oil, Gas & Mineral Corporation) will also lend Tk 1.0 billion to the MGMCL to help continue the activities of the agency, they added.
A complete work-plan will be submitted by the MGMCL on the mine operation.
Besides, the company will take initiative for increasing the production of granite and reduction in its expenses.
The decision came at a meeting of the Energy and Mineral Resources Division under the Ministry of Power, Energy and Mineral Resources with State Minister Nasrul Hamid.
Currently, the volume of long-term loan of the company stands over Tk 10.41 billion. The loan came from different sources.
The government signed a contract with the Germania-Trest Consortium (GTC) for mining the stone.
According to the contract, some US$16.18 has to be paid to the GTC for the  mining of per-tonne granite.
After mining, total production cost of a tonne of granite, including transportation, stands at US$ 24.16.
For this, the volume of losses incurred by the company is increasing gradually as the production cost of per-tonne granite/stone comes to more than existing market prices, sources concerned said.
"Besides, the organizations concerned are reluctant to purchase granite/stone due to excess transportation cost," said one source.  
 Some 1,500 metric tonnes of granite is being extracted from the granite mine every day. The mine is designed to produce 1.65 million metric tonnes of hard-rock per annum to meet the country's requirement.
The total production target from the mine is 9.2 million tonnes, the data showed.
Managing Director of the MGMCL Md. Aminuzzaman could not be contacted over phone despite several attempts for his comment in this regard.
MGMCL, a company of Petrobangla under the Ministry of Power, Energy and Mineral Resources, was launched on August 04, 1998 with a paid-up capital of Tk 3.50 billion under the Company Act 1994.
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