Staff of Embilipitiya Paper Mills and those at National Paper Company Limited headquarters, are to be offered a Compulsory Retirement Scheme (CRS) and their services terminated.

However,Embilipitiya Paper Mills would not be liquidated but converted into a joint venture by finding a suitable investor, Media Minister Anura Priyadharshana Yapa said."The restructuring process will be completed in three months.

Employees of Valachchenai Paper Mills will nevertherless be allowed to continue in service. The Governments policy is not to liquidate state institutions since it could lead to trade union unrest."

The Rs. 66 million retirement package offered by President Mahinda Rajapaksa in his capacity of Nation Building and Estate Infrastructure Development Minister, he said has been approved by the cabinet of ministers. It will be utilised to pay salaries, arrears of salary and gratuity payments.

Yapa, said that Valachchenai Paper Mills would function as a separate entity after the restructuring process and employees paid out of profits earned by the company and not the Treasury.

"Strategic Enterprises Management Agency, having studied the National Paper Company Limited proposals said that the company can be profitably restructured by using minimum labour, in view of the quality and demand for paper and board items manufactured, especially by the Valachchenai Paper Mills."

The Government’s policy was not to liquidate state institutions since it could lead to trade union unrest, he added.

The Cabinet also approved a Memorandum submitted by Urban Development and Sacred Area Development Minister, Dinesh Gunawardena to complete the Awasa Building Project in Situlpauwa at a total cost of Rs. 96 million,Yapa said.

"The Awasa Project was originally estimated to cost Rs.40 million and Cabinet approval was granted for the Central Engineering Consultancy Bureau to design and build it. After a part of the building was completed on payment of Rs. 10 million, the scope of the project was changed to include the entire building on a request by the High Priest of Situlpauwa Temple. This, resulted in the project cost increasing to Rs. 96 million. So it has become necessary to sign a new agreement with the Central Engineering Consultancy Bureau to complete the project."