Embilitiya paper factory staff without pay; mills remain closed

I write with reference to an article published in your newspaper last week about the state-owned paper factory in Embilipitiya. In the story, titled “Paper jam as state factory grinds to a halt” (The Sunday Times, November 2, 2008), the writer suggests that the factory might be privatised.
Please note that this information is not true. We have no intention of privatising the paper mill. The following is a clarification of the current situation at the mill.

Presently, the paper mill is in operation, but not at its full capacity. It is true that there is a working capital problem, but discussions are under way with the Treasury to obtain short-term funding of Rs. 250 million. I am also happy to inform readers that the Chinese government has expressed an interest in upgrading the mill, and we are holding discussions with them as well.

S. Amarasinghe,
Chairman, National Paper Company Limited

Two weeks after the closure of the state-owned paper factory in Embilipitiya, staff salaries remain unpaid, and there are no signs that the factory will be resuming production any time soon, despite government reassurances that the factory will be revived, trade unions say.

Staff were supposed to have been paid their last month’s salary on October 24, but up to yesterday no salaries had been given out and no official word has been received on the matter, says Inter-Company Workers’ Union, Embilipitiya branch, president Abeywardena Gunadasa.

The factory, which had been inoperative for five years, was officially re-opened on September 24 by Minister Basil Rajapaksa. Manned by some 300 employees, the factory produced 32 tons of paper in its first eight days of operations, before it was unexpectedly closed down again. The closure came as a shock to the employees, who were hoping the re-opened factory would continue to operate without interruption.

Former JVP MP Wasantha Samarasinghe, who had campaigned to revive the factory, told The Sunday Times that two previous attempts to revive the factory had failed. He said employees feared the factory would be eventually privatised. He said the government gave Rs. 25 million to get the factory started again.

Although the factory had previously stopped operations five years ago, employees continued to receive their full salaries. However, from January to May this year, they were paid 75 percent of their salaries, and in June and July they were paid 50 percent. In August and September they received their full salaries.

National Paper Company Ltd chairman S. Amarasinghe told The Sunday Times that the Treasury has allocated money for staff salaries, and that employees would be given their September salaries and soon as the money was available. He added that discussions were under way with the Treasury to obtain short-term funding of Rs. 250 million.Meanwhile, last Wednesday the factory’s water supply was stopped, and the next day the factory’s power supply was cut.

In his Budget speech last week, President Mahinda Rajapaksa said there would be a 5 percent cess on paper imports in order to boost local paper production at the state-owned Embilipitiya and Valachchenani paper factories.

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