Government plans Rs 1k-cr plan to revive Hindustan Paper

The government has firmed up a Rs 1,000 crore plan to revive Hindustan Paper Corporation through involvement of the private sector in certain activities and settlement of dues, official sources said.

The go-ahead to the revival plan was given at a meeting of the inter-ministerial group chaired by the prime minister earlier this month, sources said. The inter-ministerial group has been tasked with undertaking turnaround of Hindustan Paper Corporation and the Niti Aayog has been entrusted with overseeing implementation of the revival plan. “A Cabinet note is being prepared for settlement of the company’s liabilities to the tune of Rs 1,000 crore, including payment of salaries to its 1,500-odd employees (barring Hindustan Newsprint) and clearance of outstanding statutory bank liabilities,” a senior Heavy Industries Ministry official said.

Employees of Nagaon and Cachar paper mills belonging to central PSU Hindustan Paper Corporation, which comes under the administrative control of the Department of Heavy Industries, have not paid salaries for 10 months and a year, respectively. Due to shortage of working capital, the production in Cachar Paper Mill and Nagaon Paper Mill has been suspended since October 2015 and March 2017, respectively.

“There was a brainstorming meeting chaired by the prime minister, wherein it was decided that while retaining the public sector character of Hindustan Paper Corporation, contracts will be given to private players for carrying out procurement and due diligence activities,” the official said.

While roping in private players is a practice commonly followed by state-run PSUs in the services sector, it is a “paradigm shift” for companies operating in the manufacturing sector, the official added. Over a period of three decades, HPC has built up a total capacity of about 3.35 lakh tonnes of paper and newsprint.