Bid to bail out State sugar factories

 “The condition of the most of these sugar factories is in shambles as they need infusion of fresh capital,” the state Sugar Minister Shivaraj Tangadagi told Deccan Herald here. The minister who discussed the sugarcane crop scenario with the Union Agriculture Minister Sharad Pawar, said that he had already held several rounds of meeting with prospective investors, who are ready to infuse capital into these co-operative sugar factories.  “The response is quite enthusiastic,” he said. 

Karnataka– the third biggest sugar producing state in the country– has 23 co-operative factories out or which 17 are operational while the rest are defunct.

As per the proposal investors would be allowed to take 51 per cent of share and run the factory with fresh investment on build operate transfer (BOT) basis up to a period of thirty years, Tangadagi said. 

In return, the Government will allow the factory to set up distillery, ethanol and co-generation unit, he said. With the most of the co-operative sugar factories having failed to return the money to farmers in 2006-07 and 2007-08 the government has spent Rs 140 crore so far giving relief to factories as well as payments due to farmers, the minister said.
Currently the annual crushing capacity of all sugar mills in Karnataka is 280 lakh tonnes and by strengthening co-operative sugar factories, the government wants to enhance the crushing capacity by another 100 lakh tonnes, he added.

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