Embilipitiya paper to restart, 6 years after corrupt deal
View(s):In the wake of rising paper prices in the world market, the Sri Lankan government is – at last – set to revive a defunct state paper mill at Embilipitiya after all the previous attempts made during the previous regime failed due to corruption and malpractices.
The Ministry of Industries and Commerce will lease the mill to Korean SPA Packaging (Pvt) Ltd (KSPA) with Rs. 1.2 billion investment to produce paper and packaging material by upgrading machinery and infrastructure on a cabinet approval received this week, a senior Ministry official disclosed.
KSPA is a multibillion rupee turnover company engaged in the corrugated and flexible packaging industry catering to the packaging needs of various industries including tea and garment industries in the country since 1993.
KSPA is a multibillion rupee turnover company engaged in the corrugated and flexible packaging industry catering to the packaging needs of various industries including tea and garment industries in the country since 1993.
Embilipitiya Paper which was first set up in 1978, closed in 2003 and resumed in 2011 under an Australian firm in a deal tainted with corruption allegations in 2011.
Auslanka Paper Company (Pvt) Ltd was the local entity incorporated with Perth Engineering and Maintenance (WA) (Pvt) Ltd, an Australia based firm, to revive the paper mill at Embilipitiya on a 30 year lease period at a price of Rs.600 million.
The company however abandoned the business in 2012 without repaying a bank loan facility of over Rs.400 million.
At that time the Finance Ministry received a complaint of a Rs.100 million commission paid by Auslanka to a top official of the State Resources and Enterprise Development Ministry. A probe into this corrupt deal had been terminated inconclusively in 2013.
(BS)