Tuli paper mill to be revived in 2 years: Pangnyu

Union Finance Minister P. Chidambaram

Minister for industry and commerce S. Pangnyu Phom Saturday said Nagaland Pulp and Paper Company Limited (NPPCL) or Tuli paper mill- a joint venture of Hindustan Paper Corporation Ltd (HPC) and government of Nagaland would be fully revived within two years.

In an exclusive interview to Nagaland Post at his residence here, Pangnyu disclosed that on May 8 union finance minister P. Chidambaram cleared the file and referred it to a union cabinet committee for approval.

Pangnyu said after the approval, major renovations work would be taken up so that the mill could begin functioning at the earliest.

He also informed that 88% shares of the mill would be held by HPC and the remaining 12% by the state government.

The minister said the Tuli paper mill had to close down due to several factors including damage to boiler machine, poor supply of power and law and order situation caused by “taxation.”

He said that after he took over as the minister in-charge for industry and commerce, he has been holding series of meetings with HPC officials and Tuli paper mill employers association in an effort to revive the sick unit.

Pangnyu said once the Tuli paper mill is fully revived, it would generate employment opportunities for state’s youth.

Before revival of the mill, Pangnyu said he would soon convene a consultative meeting with all the legislators from Mokokchung district, representatives of the Ao Senden, Ao Kaketshir Mungdang (AKM), Ao Gazetted officers and NGOs from Mokokchung district along with top ranking officials of various departments.

He attributed the revival package on Prime Minister Manmohan Singh and Minister of heavy industries & public enterprises, Praful Patel for recommending the matter to the finance ministry.

In order to meet the paucity of power, Pangnyu disclosed that as a temporary measure, the state government was mulling over setting up of a thermal power plants in Tuli and Dimapur
On the state’s industrial policy, Pangnyu said new modalities, particularly for the foot-hill areas (special economic zone) could be passed in coming ensuing assembly budget session.

On transport subsidy, he admitted that state had “numbers of cases” related to transport subsidy and unless “action taken report” was submitted to the ministry, it was not possible to release the subsidy money. He however said that initiatives were being taken to release the subsidies at the earliest.

In June 26, 2012, Nagaland chief minister Neiphiu Rio and his cabinet delegation met Planning Commission deputy chairman Montek Singh Ahluwalia, wherein the cabinet urged upon Centre to provide Rs. 1200 crore for revival of Tuli Paper Mill.

However, the department of heavy industries said that it has set a maximum investment plan of Rs. 679 crore for NPPCL.

It maybe mentioned that the union cabinet in its meeting held on November 8, 2006 approved the revival of NPPCL at an estimated cost of Rs. 552.44 crore with Rs. 261.26 crore as government’s equity, Rs. 252.99 crore as loan from banks/financial institutions with government guarantee and Rs. 38.19 crore as 5% non cumulative preference share.

However, it was found that the cost of the project escalated to Rs. 1102.85 crore thereby making it unviable proposition with estimated IRR of 5.5% only.

Investment of estimated cost of Rs. 679 crore has been considered in two phases-- a fund based Capital Investment Subsidy (CIS) 30% of investment for Plant & Machinery (Rs.476.47crore) which is approximately Rs. 150 crore has also been considered.