Shimla (Dec 15): Former ADGP of Himachal Pradesh, BS Thind, has alleged that the recent sale of AIPIL carton manufacturing unit by the state government caused a loss of Rs 20 core to the exchequer. While responding to media reports by wuoting the managing director of AIPIL, Madan Chauhan, defending the deal, the former ADGP, who was MD of AIPIL from 1993-98, said in a press statement released here today that Chauhan’s statement was incorrect that the machinery had become old and useless.
“During my visit to similar plants in UK it transpired that this type of plant had a life span of more than 50 years even when it was running to full capacity. The plant at Pragati Nagar functioned at the most at 5 to 10% of its capacity. Consequently the machinery that has been sold at scrap value is practically new and could have been repaired by spending about Rs 2 crores, he claimed.
“The reason for the plant going into losses was due to upward evaluation of the Yen and the hesitation of the farmers to adopt the new type of corrugated packaging as compared to the traditional wood packing,” he observed. He said that in order to obtain more orders, the government in 1993 had obtained a commercial license for manufacturing any type of cartons for packaging. In 1998 the Corporation had orders worth Rs 90 crores in the pipeline but due to reasons best known to the government, the appointment of marketing agents was cancelled, he alleged.
He pointed out that presently the demand of corrugated cardboard cartons in Himachal Pradesh alone has gone up to about 2 crores cartons per annum. “The claim of the government that the plant was not viable is proved false by this demand,” he claimed. “Due to the state of art technology, the carton manufactured by these machines installed at Pragati Nagar was far superior to the cartons that are being manufactured by the private corrugaters in Himachal Pradesh as well as outside the state. Moreover, the private corrugaters have been overcharging for their inferior quality of cartons because the state-owned plant had stopped production of cartons,” he said.
Thind said that it is wrong to assess the present value of the plant by subtracting the depreciation value. “In fact, just like land prices, the value of the this plant has gone up with time. Unlike vehicles, this plant has very few movable parts which are open to wear and tear. Hence the contention of the present MD that the plant had become useless and its value had depreciated is not the correct way to assess the value of the plant and the machinery,” he alleged.
“During my tenure as the managing director of AIPIL, a license for setting up a paper mill manufacturing craft and semi-craft paper had been obtained. This plant was to be located either at Poanta Sahib or at Una. Once the plant was running to its full capacity, the paper would have been purchased from this mill,” the former ADGP said, adding that this would have generated employment for about 3,000 families of the surrounding area and also engaged a thousand trucks. “By selling this plant and machinery for a paltry sum of Rs 1 crore, the concerned authorities have caused a loss of about Rs 20 crores approximately to the state exchequer,” he said.