SHIVAMOGGA: The state government has decided to lease out operations of the state-run Mysore Paper Mills (MPM) in Bhadravathi in order to revive the plant. The government has invited a request for proposal from private parties to invest in the plant on Lease-Upgrade-Operate-Transfer Basis.
Minimum investment from a successful bidder should be more than Rs 1,000 crore within three years from the lease deed execution date.
Shivamogga Deputy Commissioner and MPM Managing Director KB Sivakumar told The New Indian Express that around six or seven paper manufacturers are expected to participate in the bidding process. Last date for submission of bids online on Karnataka Public Procurement Portal is October 12.
"Main intention behind leasing out operations is to revive the plant, generate employment and turn the plant into profit-making. Successful bidders should create an employment of at least 500 workforce in the paper mill/pulpwood based manufacturing industry and overall 1000 workforce including direct employment in other permitted allied industrial activities. Not only the plant, the sugar factory, which was established to cater to the need of raw materials such as bagasse, will also restart once the plant recommences operations," the MD said.
Founded by Krishnaraja Wodeyar Bahadur, it was incorporated in 1936 and later it was recognized as a public sector undertaking in 1977. Sources in the MPM said that the plant is capable of manufacturing different varieties of paper including kraft paper, writing and printing paper, dandy and newsprint.
The installed capacity of the plant is 1,00,000 metric tonnes of paper per annum. It has a capacity to manufacture 360 MT of paper per day.
However, in the late 1990s, with original newsprint users being allowed to import all their demand from foreign countries, primarily south east, the demand for domestic newsprint took a dip resulting in MPM incurring significant losses.
By 2011, the networth of MPM became negative and it was declared sick under the Sick Industries Act, 1985 and referred to the Board for Investment and Financial Restructuring (BIFR). MPM has now decided to lease out the operations of the entire plant to any interested and competent partner which would in turn rehabilitate and revive the plant.
The total area that would be leased out is 658 acres on 'as is where is basis' to the Lessee free from all the existing liabilities. The plant also has its own captive thermal power plant of 41 MW capacity to supply electricity and forestry division, for providing pulpwood, maintaining a captive forestry on 22000 hectares.
The MD said that for smooth transition of the plant and machineries to the selected bidder, MPM has decided to strike a settlement to existing permanent and contract employees by awarding them Voluntary Retirement (VRS), settling of liabilities to the creditors to handover the assets to the lessee devoid of any charge and around 2,00,000 tonnes of pulpwood shall be provided every year from the authority’s captive forest plantations to the lessee.