SHILLONG: Leader of the Opposition and UDP president, Donkupar Roy on Monday urged the State government to shift the Mawmluh Cherra Cement Limited (MCCL) headquarter to Sohra from Shillong, hinting that the efficacy of the corporation would increase with the change.
“The babus are in Shillong and the workers are in Sohra. It is high time that the office headquarter is shifted to Sohra. The matter was taken up in the House in the previous years and it was said that immediately after the completion of the new plant the office will be shifted to Sohra,” Roy said while moving a call attention motion on the MCCL.
“Previously, it was felt that there is no telecom and internet connectivity but now we have everything in Sohra; there is no reason why it should not be shifted there,” Roy added.
Replying to the call attention motion, Chief Minister Mukul Sangma said following the NGT ban operations for the old wet process plant had to be stopped in August, 2014 as there was depletion of coal stocks.
He asserted that MCCL will operate the new dry process plant by April, 2016 as had been discussed and resolved during the meeting between MCCL and government officials on February 24.
Following the hurdle faced in restarting the old plant, the MCCL board of directors decided to not restart the old plant as according to them it will further deplete the already meager resources as it was found that running the old plant would not generate enough revenue to even pay salary to the employees.
“Since 2007-08, the production from the old plant had fallen continuously mainly due to the age of the plant which has resulted in the once cash rich, debt free company to incur losses with poor liquidity. With the stoppage of the plant MCCL could not generate any revenue thus severely affecting the already poor liquidity condition,” the chief minister said.
The chief minister further pointed out that the sorry state of affairs of the MCCL plant continued even after transportation of coal was allowed by the NGT, since the liquidity condition did not allow procurement of sufficient coal for restarting the old plant. Moreover, as no major investment was made since the reactivation project of the old plant in 1991-92, a lot of investment was necessary to restart the plant after the stoppage.
Roy observed that when it comes to employment, preference should be given to the locals if they possess the required qualifications, but quality should not be compromised.
The chief minister stated that for running the cement plant efficiently optimization of the strength of the employees was necessary. He added that with the implementation of the Voluntary Retirement Scheme (VRS), 145 staff opted for it thus reducing the strength from 455 employees to 310 employees.
He stated that the delay in completion of the expansion project had resulted in huge interest charges by UCO Bank against the term loan of Rs 50.96 crore availed by MCCL for the project.
Moreover, the MCCL has to make refunds in quarterly installments from the expansion project funds to avoid the account becoming NPA (Non Performing Asset) along with the payment of monthly interest, while the bank has pressurized the State government and MCCL to clear the overdue payments.
Under these circumstances, the government had decided to liquidate the total loan of Rs 34.76 crore by making a one-time payment against the balance loan which would not only reduce the total interest payment but also would relieve MCCL from the burden of maintaining the timely payment schedule to the bank till liquidation of the loan.
It was also observed that prior to operation of the new plant it was necessary for MCCL to clear a part of the accumulated liabilities. Apart from this, working capital was required for operating the new plant which the bank did not consider in view of the overdue amounts against the term loan, after which the government extended a financial support of Rs 80.25 crore as a soft loan to MCCL.
The chief minister said the cost of production in the dry process would be lesser than the wet process plant and with optimum production MCCL would be able to regain stability at an early date.
It may be reminded that the MCCL expansion project was scheduled to be completed by October, 2007 with an initial cost of estimate of Rs 85 crore. When the project was conceptualized way back in 2005, the UCO Bank had sanctioned a term loan of Rs 50.96 crore at a debt equity ratio of 60:40. The Government of Meghalaya was to contribute Rs 28 crore as equity while MCCL was to contribute the balance amount.
The chief minister added that in January, 2011, bulk funds were received by MCCL which prompted the re-mobilization of work force giving the much needed boost to the project.
