Abandoned Embilipitiya Paper Mill workers compensated

Controversy surrounds Australian involvement in project

By Maheesha Mudugamuwa

Funds received in 2011 by way of foreign direct investment (FDI) amounting to Rs. 400 mn in the Embilipitiya Paper Mill project which was abandoned the following year had been expended to compensate the workers, National Paper Company Limited (NPCL) Chairman S. B Niyangoda said yesterday.

Niyangoda told The Island that the government had nothing to do with the NPCL or the abandoned project, but a local bank which had obtained a leasing facility was currently handling the matter.

The Embilipitiya Paper Mill which is owned by the NPCL had been given on a thirty-year lease to an Australian firm, Perth Engineering and Maintenance (Pvt.) Ltd in 2011, Niyangoda said. The facility encompassed 44.7 acres. The deal was signed by the Australian firm’s local offshoot, Aus-Lanka Paper Company (Pvt.) Limited.

However, in 2012 the company wound up operations and abandoned the property arbitrarily without informing the then Minister of State Resources and State Enterprise Development Minister Dayashritha Tissera. The Australian company had also obtained a loan from a local bank by mortgaging the machinery of the mill.

Meanwhile, former Chairman of the NPCL Mangala Senarath, contacted for comment, said the total value of the project was Rs. 600 million and only Rs. 400 had been recovered.

Senarath, however, said the Valaichchenai Paper Mill which, too, came under the NPCL, had remained closed for the last 13 months.

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