The Secretaries Committee set up by the Telangana government for recommending modalities — particularly to decide reasonable compensation to be paid to the majority stakeholder in Nizam Sugars — for taking over the joint venture has set in motion the process of regaining control over a public sector undertaking in the era of privatisation.
The government move, as it comes delayed, however, has failed to address the concerns of sugarcane farmers and farmers’ associations completely and also in giving clarity on the future management of the four units of the erstwhile Nizam Sugars. Delta Paper Mills Ltd (DPML), management of the existing joint venture Nizam Deccan Sugars Limited has neither cleared the farmers’ dues, cost of sugarcane supplied by the farmers, nor the dues of employees’ salaries in the name of incurring losses in successive years since its take over from 2003-04 crushing season.
“We were of the hope that the TRS government, which had promised to take over Nizam Sugars all through the movement for separate statehood to Telangana, will address the concerns of farmers along with initiating the process for takeover. Instead, the government has asked the committee only to explore the ways to revive the units with minimum burden on it without any word on farmers’ dues,” president of Telangana State Ryotu Sangham T. Visveswara Rao said.
The constitution of the committee 11 months after the formation of first Telangana government is likely to delay the process of takeover as the government would have only two months’ time to complete the formalities before the commencement of next crushing season. The government has stipulated three months’ time to the panel to submit its report.
According to official sources, the NSDL management has put its accumulated losses at about Rs. 150 crore, though it has made profits in three successive years from 2004-05 to 2006-07. “The purpose of disinvestment of PSU was defeated when the joint venture management is depending on the financial support from the government to avoid its reference to Board of Industrial Finance and Restructuring (BIFR). It has even urged the government to allow sale of company’s land and scrap to clear the bank and farmers’ dues”, the sources said.
RISE AND FALL
Nizam Sugars was set up at Bodhan by Nizam’s government of erstwhile princely State of Hyderabad in 1937
It was expanded into about a dozen units in all three regions of combined Andhra Pradesh State
Mismanagement pushed Nizam Sugars into losses with outright sale of several units by the government
Four units of Nizam Sugars disinvested in August 2002 with DPML getting 51 per cent stake for Rs. 67 crore
Units to be taken over by the Telangana government are sugar units at Shakkar Nagar (Bodhan, Nizamabad), Metpally (Karimnagar), Mombojipally (Medak) and distillery at Shakkar Nagar
