Cost escalation delays reviving Tuli Paper Mill

The talk about reviving Nagaland Pulp & Paper Mill Corporation Ltd or popularly known as Tuli Paper Mill seemed to have hit roadblock due to cost escalation.
Initially, the revival of Tuli Paper Mill was estimated at Rs. 553 crore which was approved by the BFR earlier. However, due to cost escalation, the new estimated cost for the revival of Tuli Paper Mill had shot up now to Rs. 1242 crore. The main reason behind the cost escalation is due to the global economic recession which had sent prices of commodities skyrocketing across the world.
Revealing this to Nagaland Post, parliamentary secretary in-charge of industries and commerce, Dr. K.C. Nihoshe said a fresh estimate has been prepared for the approval from the centre was being awaited.
He said the state government was only awaiting the government at the centre to properly settle down.
“We are hopeful that we will get the central approval of the new estimate” he said adding that fresh DPR also has to be prepared and get approved which would be followed by floating tender. He said all these processes might take a little time. Imchen expressed hope that the paper mill would be able to start functioning within 2011.
Meanwhile, Chief Executive Officer NPPC, A. Mannan, when contacted revealed that the entire process of global tender for reviving the Tuli Paper Mill was over. However, in the process, NPPCL found that the initial estimated cost of Rs 553 crore for the revival of Tuli Paper Mill with a production capacity of 66,000 MT per annum which was approved by the BFR earlier was not viable as the prices of machineries had shot up. In this regard, the company has worked out a fresh estimate of Rs.1242 crore with an enhanced production capacity of almost 90,000 MT per annum.
The new estimate with enhanced production capacity was already approved by the NPPC Board and the same would be taken at the SPC by the first week of June, the CEO said. He also revealed that efforts were on to include the new proposal of the NPPCL in the list of first 100 days job of the new government at the centre.
It may be mentioned that the Nagaland Pulp & Paper Mill Corporation Ltd was established as a joint venture with the Hindustan Paper Mill Ltd in 1971. The mill started its production sometime in the early eighties and touched its peak production of 20 MT per day during the mid 80s. It later started declining in the 1987s and the mill virtually collapsed and was defunct. The NPPC introduced Voluntary Retirement Schemes to its employees sometime in 1992. Since then, the mill has been abandoned idle gathering rust.