Nagaland’s only ‘heavy industry’ faces imminent shutdown

Nagaland’s only ‘heavy industry’ faces imminent shutdown
Seen here is a part of the Tuli Paper Mill photographed on February 10, 2015. After the string of unfulfilled promises made about the mill, it is facing imminent closure. (Morung File Photo)

 

Instead of reviving, Tuli Paper Mill on the brink of closure

 

Morung Express News
Dimapur | July 16

 

The Nagaland Pulp & Paper Company Ltd. (NPPCL) or the Tuli Paper Mill is a classic case of ‘resuscitation’ gone awry – resulting in a slow death instead of being revived.

 

“Yes, the closure seems to be certain, and it would be only a matter of time, before it is officially announced. Matter is in the knowledge of GoN (Government of Nagaland), as they represent the Board of Directors,” stated a NPPCL official on the condition of anonymity.

 

This contradicts several assurances given over the years. On October 2014, when The Morung Express inquired about its status of revival, the then Public Relation Officer (PRO) of NPPCL stated, “The paper mill will be running at its full capacity by February 2016, give and take 2-3 months.” About a year after, in September 2015, the Ex-Chairperson of NPPCL, TN Mannen revealed in an article that the mill which was “last said to be revived by November 2016, but has now been delayed to November 2017.”

 

When queried about the same, the official argued that while the project was going on ahead of schedule, “since August onwards neither the fund came, nor any assurances, the suppliers stopped their work as they were not being paid.”

 

“As the work came to a standstill, no schedule or milestone could be achieved.”

 

“The reason for stoppage of funds was diversion of the fund to HPC and as HPC themselves were in a very poor financial crisis, they could not repay the diverted amount.”

 

Asked whether these issues were raised by GoN’s representative in the board of directors during board meetings, he highlighted that the matter was taken up both at the level of board and Nagaland Chief Minister’s Office, which was later reported in media.
At the moment, the parent Hindustan Paper Corporation Limited (HPCL) itself has been referred to NCLT (National Company Law Tribunal). The tribunal ordered the initiation of a corporate insolvency resolution process against the HPCL.

 

According to a notification dated June 28 passed by NCLT’s Interim Resolution Professional in Kolkata, corporate insolvency resolution process had commenced from June 13 and is estimated to close on December 9, 2018. The last date of submission of claims (from creditors) was July 10, 2018.

 

“Yes the board has been dissolved and taken over by NCLT,” the official added. “Without GoI’s intervention, then the company shall be sold to the recognized bidder and all the dues of HPCL shall be paid to creditors.”

 

Bleak scenario at the mill
According to the official, the present status of the mill “seems to be bleak.”

 

“The salaries of employees were stopped since February 2017, now we have started selling the scrap and paid them three months salary,” he added.

 

Due to non payment of electricity bills, it was also informed that power has been disconnected. Only six hours per day power is given which is used for running the water pumps.

 

The official added that employee’s bus has been stopped due to the financial crisis and their “conditions are pathetic.”

 

Way forward
Asked about the way forward for the mill, he said, “For resumption, funds are required, as Utilisation Certificate has not been given, more funds are unlikely to be released from GoI, hence probably employees shall be given VRS and mill could be closed.”

 

Nothing can go ahead without funds. Now the requirements could be higher, fresh manpower would be required, as, project related persons have either superannuated or transferred; and vendors have to be roped in again, the official elaborated.

 

Asked about the insolvency case by NCLT, he noted that it applies only to the ‘holding company’ (HPCL), not subsidiaries – implying that it can be revived either by GoI or State Government.

 

“Probably if GoN wants it can take over and revive, and it would be given at a very nominal rate if intelligently bargained. The government can release the funds required to clear all the debts,” the official said.

 

The Tuli Paper Mill
A joint venture between HPCL and Govt. of Nagaland, the Mill was established in 1971 but suspended in October 1992 due to “continued operating losses.”

 

According to the NPPCL’s website, with an installed capacity of 100 tons per day (tpd), the mill was established primarily to exploit the abundant power resources with an objective to “promote, establish, execute and run industries, projects or enterprises for manufacturing, selling and/or export of pulp, paper, newsprint and various products from pulp and paper.”

 

The approval for the mill’s revival was given by the Government of India in June, 2013 with an estimated cost of Rs. 489 crore for the first phase and Rs. 190 crore for the second.

 

The revival process was started thereafter.

 

In February 2015, the Union Minister for Heavy Industries and Public Enterprise Anand G. Geete assured that the Centre has activated an “action plan to revive” the mill.

 

During a visit to the mill, he informed that the plant had to run on the basis of 95% (Centre) and 5% (state) share upon completion. Again on June 2016, Geete said in Agartala that the Government has “decided to revive the mill. We will do whatever possible to set up adequate number of industries in the north-eastern region.”

 

Perhaps, it is the end of a long and winding road for the Tuli Paper Mill.