Rs.24.75 crore interest converted into government’s share

The 35 general body meeting of Perambalur Sugar Mills, a public sector unit, scheduled for Wednesday, is likely to be stormy with farmers determined to rake up the issue of diluting the shareholding of the public to just about five per cent from the original 46 per cent. Writing off of the penal interest of Rs.24.75 crore, which has been converted into the share of the government, and fixing Rs.3,000 a tonne as procurement price for sugarcane would be among the major demands.

Rajachidambaram, State general secretary of Tamilaga Vivasayigal Sangham, told The Hindu that a number of cane growers’ associations and farmers’ bodies have decided to oppose the “dictatorial” attitude of the management.

N. P. Anbazhagan, secretary, Sugarcane Growers’ Association, Perambalur, pointed out that farmers invested as much as Rs.1.94 crore in 1978 and thus had 46.41 per cent share in the mill while the State government had invested Rs.2.24 crore to hold 53.59 per cent share.

A. Venugopal, Perambalur district president of Tamilaga Vivasayigal Sangham, said the mill was declared “sick” on April 4, 2000, and referred to the Bureau of Industrial and Financial Reconstruction. As the management refused to heed the suggestion of the ITCOT to put the mill back on the rails, the interest burden kept piling up.

Mr.Rajachidambaram alleged that the management chose to convert that penal interest of Rs.24.75 crore, which was met by the loan from the State government, into share and thus “the government now has 94.23 per cent share in the mill whereas that of the farmers has shrunk to just about five per cent. We have been opposing this for the past three years.”

He pleaded for restoring the situation prevailing before the conversion of the penal interest into share. “After all, it is the government, which is the de facto management and is responsible for the losses. When the mill got loans at 17 per cent interest and failed to repay within the due date, it had attracted penal interest also.” Hence, he appealed to the State government to write off the penal interest and thus restore the shareholding of the public.

Another major grievance is that cogeneration work at the mill is at standstill. Perambalur is one of the 12 mills where cogeneration was proposed. The total generation planned in the 12 mills was 183 MW for which Rs.849 crore was sanctioned in 2010.

“While work is going on in some mills, nothing is happening at Perambalur mill because of non-allocation of funds despite the arrival of the machinery,” he alleged. “We have paid our share towards the project costing Rs.91crore. Similarly, the proposed modernisation works remained halfway through at the mill,” he added.

Farmers are furious over the decision to stop distribution of two kilograms of sugar to the shareholders at the general body meeting citing a Central government circular. “We have been getting sugar at the general body meeting for the past 15 years and we don’t know why it should be stopped now.”

They also propose to demand early payment of Rs.135 a tonne, which is the additional price for the cane suppliers of 2004-05 season.