The Hindu : Karnataka / Bangalore News : Closed cooperative sugar units to be leased out for 30 years

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Monday, Nov 10, 2008
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Karnataka

Karnataka - Bangalore

Closed cooperative sugar units to be leased out for 30 years

S. Rajendran

There are seven factories in State that have stopped crushing cane for long

Promoters have to pump in at least Rs. 200 crore to enhance crushing operations
They will also have to install cogeneration plants

Bangalore: Cooperative sugar factories, which have remained shut for long owing to a variety of reasons will be handed over to private entrepreneurs on a 30-year lease.

A pilot scheme introduced sometime ago to lease out cooperative sugar factories for short terms rather than sell them has not yielded the desired results.

This has made the Government decide to give them on long-term lease.

There are seven sugar factories in Karnataka which have stopped crushing sugarcane for long.

‘Transparent exercise’

Sources in the State Government told The Hindu that “it will be a transparent exercise wherein the promoters have to bring in at least Rs. 200 crore to enhance the crushing operations and also install cogeneration plants. If there is no proper response to the tenders then the Government will liquidate such factories.”

The sugarcane crushing season has just begun in the State and given the problems posed to sugarcane growers by the defunct factories, the Government has decided to lease them out.

One of the important conditions forming part of the lease is that the new managements of the factories have to also install a 20 MW cogeneration plant and also commission a distillery, apart from producing ethanol which is blended with high speed diesel to run automobiles.

Active units

Minister for Sugar and Agriculture Marketing Shivaraj S. Thangadagi said that of the 58 sugar factories in the State, 51 were working, including the Raibag sugar factory which has restarted operations.

Of the nearly 365 lakh tonnes of sugarcane harvested in the State annually, 265 lakh tonnes were crushed by the factories while the rest was either used in the manufacture of jaggery or taken to factories outside the State. Sugar factories in Maharashtra (along the border with Karnataka) largely crush the sugarcane grown in Karnataka.

Mr. Thangadagi made it clear that handing over the cooperative sugar factories on lease would not mean a sale as the property of the units would remain with the Government.

“This scheme is being implemented only to enhance the crushing operations and ensure that the interests of the sugarcane growers are taken care of. I will shortly visit Maharashtra and Tamil Nadu where sugar factories are run well. Several good features adopted by the sugar industries there will also be implemented here over a period of time,” he said.

Production

Karnataka produces nearly 30 lakh tonnes of sugar every year, and the factories have a stock of nearly 10 lakh tonnes (as on September 30).

Karnataka stands third in sugar production in the country after Uttar Pradesh and Maharashtra, and a part of the local production (nearly five lakh tonnes) is exported to neighbouring countries, including Sri Lanka.

The sugar production in the country is expected to be around 260 lakh tonnes and taking into account the buffer stock, the total availability would be around 300 lakh tonnes compared to the country’s requirement of 200 lakh tonnes.

“We have no other choice but to export around 100 lakh tonnes. The Union Government has to extend incentives to the sugar factories to export at least part of their produce,” sugar industry sources said. The Karnataka Government has given an incentive of Rs. 100 per tonne to the sugar exported in the last sugar season.

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