Special Correspondent

NSL Sugars asked to start crushing of cane

from 2010-11 season

Company free to expand crushing capacity to 2,500 tonnes a day

GULBARGA: The State Government has signed a memorandum of understanding (MoU) with Bangalore-based NSL Sugars Ltd. to revive the ailing Aland Cooperative Sugar Factory at Bhusnur village in Aland taluk on lease, rehabilitate, operate and transfer (LROT) basis.

The factory has been leased out to NSL Sugars for 30 years for Rs. 75 crore.

This is for the second time that the State Government has leased out the loss-making sugar factory. In 2005, the State Government leased out the factory to Belgaum-based Renuka Sugars. After running the factory for three years, Renuka Sugars cited losses and failed to take up crushing during 2009-10.

The company later abrogated the lease agreement, following which, the Government invited tenders for leasing out the factory.

According to the MoU, signed by managing director of the factory Bennur Sharanabasappa on behalf of the State Government and chief executive of NSL Sugars S. Basavaiah earlier in the month, NSL Sugars has been given the freedom to expand the present crushing capacity of 1,250 tonnes a day to 2,500 tonnes a day. NSL Sugars has also been asked to set up a 15-MW cogeneration power plant and establish 30 kilo litre a day distillery and ethanol unit within five years from the date of the signing of the lease agreement.

The MoU provides for transfer of the scheduled property along with land and building, plant and machinery, allied equipment, agriculture land, farm and other movable assets owned by the factory. NSL Sugars has been asked to start crushing from 2010-11 season. The company has been asked to submit a detailed project report to the Government within six months on modernisation and expansion of the crushing capacity, and setting up cogeneration plant, distillery and ethanol unit.

Besides safeguarding the interests of workers in the payroll of the factory as on May 18, 2009, the MoU said that the NSL Sugars should continue the service of those employees without changing the service conditions during the lease period.