50 cr allocated in budget for Mysugar revival too little, too late

Mandya: Chief Minister Basavaraj Bommai has raised hopes of reviving the State-owned Mysore sugar factory (Mysugar) that has stalled operations for the past two years. He even announced allocation of Rs 50 crore in the recent budget to put the factory back on track following pressure from farmers' organisations.

But the question one asks is: Is Rs 50 crore enough to bring the factory out of morass of multiple problems and financial crisis facing it?

The Chief Minister reasoned that the Rs 50 crore would be spent towards

repairing the machinery and working capital needs would be met through loans from financial institutions. The factory already has a huge debt burden. It is said that it won't get the full amount allocated in the budget as the government may deduct the interest payable on previous loans.

Though the government has taken a small step towards reviving Mysugar, there are other hurdles to be crossed. For instance, alleged rampant corruption in the purchase of spares in 2019. It was closed within a few months because of malfunctioning of the machinery. Such being the grim situation, one cannot help doubt if the amount allocated would be spent properly for the purpose of repairing the machinery.

If the government wants to start the factory the capacity of the crushing machinaery should be enhanced from current 3,000 tonnes per day to 5,000 tonnes. This could cost government crores. It should repair boiling house alone at an estimated cost of Rs 4.4 crore and set up a 30 MW power plant besides spending another Rs 26 lakh for supplying quality water. The two Bagasse drum extractors need to be replaced at a cost of Rs 12 lakh.

According to official report prepared earlier, at least Rs 183 crore is needed to restart the factory; Rs 174 crore is required to purchase sugar cane and Rs 2 crore for additional fuel; Rs 6 crore is needed for payment of monthly salary to employees. Keeping all these things in mind, a proposal for Rs 257 crore was sent to the State government to restart Mysugar.

If the government wants to run the factory from June, it should start preparatory work at least four months earlier. But so far there is no indication of the government keeping its commitment.

Mysugar president Shiva Linge Gowda told The Hans India that an expert committee would visit Mysugar within 2-3 days and finalise the cost estimation for revival. As per the official report, the factory immediately needs Rs 110 crore to clear salary arrears of employees, power bill and other debts.

The current debt is expected to exceed Rs 150 crore. But mere Rs 50 crore budgetary allocation made by the Basavaraj government to revive Mysugar is too little.