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Financial crisis in Dungsam Cement due to Nu 400 mn in unpaid dues by hydro projects

The country’s biggest cement plant, Dungsam Cement Corporation Limited (DCCL) is facing a financial crisis in commissioning timely payments to its transporters and suppliers as the Corporation has not able to claim huge overdues from the contractors of the major Hydro Power Projects, Punatsangchu I and II and Mangdechu.

DCCL’s total overdue receivable from the contractors comes to around Nu 400 mn out of which Nu 200 mn is the credit sales that are already overdue and Nu 190 mn falls under the credit within the payable period of 45 days.

The Managing Director of DCCL, Sonam Jigme said that the company has been following up on the issue by constantly corresponding through letters, exchange of emails or through calls with contractors of the Hydro projects for timely payment of the dues.

“With the delay in the clearance of credit even after the maturity period of 45 days by the contractors, we are finding it difficult to pay to our transporters on time. We are also worried that our suppliers might stop supplying raw materials, which will greatly hamper our production,” said Sonam Jigme.

The Indian contractors with the hydropower projects are Jaiprakash Associate, L&T Construction, Hindustan Construction Company, and Gammon E&C Private Limited.

According to the financial records from the DCCL, the total credit to Hindustan Construction Company as of date is around Nu 34 mn, out of which Nu 17 mn are within the credit period of 45 days while Nu 16 mn of credit has already reached maturity period of 45 days.

HCCs total credit for its other project in Tangsibji stands at Nu 38 mn out of which Nu 31 mn has already reached the credit maturity and only about Nu 7 mn is within the credit maturity period.

Likewise the records showed the total credit to Jaiprakash Associate in Punatsangchu was around Nu 56 mn out of which Nu 30 mn is within the credit period of 45 days and the credit of Nu 25 mn has crossed the maturity period. But the paper learnt from the Project Manager that the company has issued Post Dated Cheques worth Nu 32 mn on the 10th of August to DCCL.

The Jaiprakash Associate in Mangdechu stands the highest with total credit of more than Nu 194 mn out of which Nu 127 mn has already reached the maturity period and Nu 67 mn is within the credit period of 45 days.

The Project Manager, Harish Aggarwal admitted that there has been delay in the payments and that they’ll be clearing all the dues as soon as possible.

The total credit sale of Gammon E&C Private Limited  for Punatsangchu is Nu 36 mn out of which 27 mn of credit have matured and Nu 8 mn remains within the maturity period.

The total credit of Gammon E&C Private Limited in Mangdechu is Nu 34 mn.  L&T Construction’s total credit stands at 19 mn.

The Managing Director also pointed that the management has not revised the cement rates for the hydro power projects for the last three years whereas the prices for the locals have been revised yearly.

About Sonam Yangdon

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