At a time when the inordinate delay in clearance of pending bills has left hundreds of farmers who have supplied sugar cane to the NCS Sugar factory in Vizianagaram district in the lurch, the company management has blamed it on the financial crisis and sought a bail-out by the government.
Dues mount to ₹12 cr.
The management says the factory at Latchayyapeta in Sitanagaram mandal is facing a severe financial crisis which has proved a bane for the sugar cane growers who have been eagerly waiting for their dues of around ₹12 crore to be cleared.
As the protests over the delayed payments have become the order of the day at the factory, Minister for Mines and Geology Sujaykrishna Ranga Rao, who is representing Bobbili constituency, has brought the issue to the notice of Chief Minister N. Chandrababu Naidu, seeking immediate justice to the farmers. A group of farmers met him recently.
Expressing displeasure over the ‘lax attitude’ of the management, he said that the factory must clear the dues at the earliest. “The Chief Minister took notice of the issue when a delegation met him in Vijayawada. A solution is expected in a few weeks,” the Minister said.
However, the representatives of farmers— Kishore, Botsa Ravikumar and others pointed out that the delay in the the payments have left the farmers in the dire strait. “The farmers owe money to banks. They need to clear their loans. Their situation is becoming worse with the each passing day,” they said.
Meanwhile, Vizianagaram Collector M.Hari Jawharlal has reportedly sent a report on the issue to the government, explaining about the ground reality in detail.
What led to crisis
Sources said that the factory management has incurred huge losses after the government stopped purchasing power from the co-generation plant set up on the factory premises. It may be noted that in pursuance of government scheme, many sugar factories in united Andhra Pradesh had set up power plants to make use of ‘bagasse’ (sugar cane waste) as fuel to produce steam that would run the turbine to generate power. The then Central government was also encouraging the co-generation of power in sugar mills by providing capital subsidy.
Sources said the NCS factory had invested ₹100 crore in the co-generating power plant, hoping for a continuous sale of power to the State government.
As per the power purchase agreement it had signed with the AP government, the company could supply 4.8 million units of power daily from its co-generation plant.
“However, the trouble began after the government cancelled the agreement as it had become self-reliant in power supply,” the sources said.
Meanwhile, the factory management said that it was dependant on the sale of power to overcome the financial losses and urged the government to come up with a bail-out package.
‘Cascading effect’
“We have urged the government to include co-generation plant in the renewable energy category so that it would be easy for us to sell the power as usual. With the power production being stopped , we have incurred huge losses and it is still having a cascading affect on the payments to farmers. We hope that the government will consider our pleas,” said N. Nageswara Rao, Managing Director of the NCS Sugars Limited.