Meghalaya government has released Rs 2.5 crore as part of pending salary for the employees of the troubled government-owned Mawmluh Cherra Cements Ltd, an official said.
"The government has released about Rs 2.5 crore which is two months' salary for the employees of the MCCL both at the headquarters and at the site at Sohra," company Managing Director Sanjay Goyal told PTI.
He said the amount was released as part of a goodwill gesture and in keeping with the assurance given to them while the remaining amount for three months, which was over Rs 5 crore would be worked out in the New Year.
The MCCL which runs at a loss had failed to pay salary to its 500-plus employees since July.
The company's MD Sanjay Goyal said the company and the government were working together for payment of pending salary from September to December 2014.
Earlier, the Committee on public undertakings had noted that the state government would have to pump in Rs 50 crore to the cement company to ensure smooth production from its new plant in April 2015.
The amount was required to liquefy term loans and payment of wages to over 500 of its employees at Sohra (Cherrapunjee) in East Khasi Hills district, it said.
The amount included Rs 20 crore as part payment to sundry creditors, Rs 16.9 crore for repayment of a term loan availed from UCO Bank and Rs 3 crore for minimum liquidity of coal, committee chairman S C Marak had said.
The plant, which went into commercial production in 1966 using the wet process, had also outlived its normal life and production was dismal after which a dry process plant was initiated in 2006 and is expected to begin production by early next year.
Another problem that has badly hit the cement plant was the ban on mining and transportation of coal by the National Green Tribunal in April this year.
The ban of coal had dealt a severe blow to the company and with the depletion of stocks, the production came to a halt since August last, Goyal said.
At present, the company was compelled to procure coal from alternative sources outside the state, he said.
In the past decade, the company made profits till 2006-2007 with production of about one lakh MT annually. From then, the production went down to barely 70,000 MT accumulating a loss of Rs over one crore annually.
Expressing happiness at the release of two months salary, the Mawmluh Cherra Cements Employees Union thanked Chief Minister Mukul Sangma.
