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Embilipitiya Mill: Huge deal like waste paper
In 2011, Ministers approved a project where the Embilipitiya Paper Mill owned by the National Paper Company Limited was given on a thirty year lease to an Australian firm, Perth Engineering and Maintenance (Pvt.) Ltd. The precincts covered 44.7 acres and the agreement was for Rs 400 million. This was after the Chief Government Valuer valued the machinery and the vehicles. The deal was signed by the Australian firm’s local offshoot, Aus-Lanka Paper Company (Pvt.) Limited.
Just a year after operation (in 2012), State Resources and State Enterprise Development Minister Dayasritha Tissera says the company “fully stopped its operations” and “abandoned the property in an irregular manner.” His Ministry had not been informed. Worse enough, Minister Tissera says the Aus-Lanka Paper Company (Pvt.) Ltd. has obtained a loan from a local bank by mortgaging the machinery of the mill.
It was only thereafter that the Ministry had come to know about it. An official committee headed by an Additional Secretary studied the matter. With the help of the Ministry of Defence and Urban Development, civil security personnel were positioned in the premises. The Ministry consulted the Attorney General. It came to light that the lessee (Aus-Lanka Paper Company (Pvt.) Ltd.) had filed a case against the local bank following the bank’s move to sell the mortgaged machinery.
The AG has held the view that there was no possibility to either abrogate the lease agreement or demand the annual lease fee from the bank in question.The matter remains in limbo. The postscript to the 2011 agreement is even more revealing. A further extent 93.3 hectares owned by the Sri Lanka Mahaweli Authority and possessed by the Embilipitiya Paper Mill of National Paper Company Ltd. was to be given on a Rs. 200 million annual lease to the same company. This was the total package of Rs. 600 million agreed upon. Now, the Ministry will not go ahead with the move.