Factors affecting its performance were highlighted in an evaluation report
The State Government’s decision against privatisation of Mysore Sugar Company Ltd. (Mysugar) in Mandya and announcement on setting up an expert committee to help revive the factory has evoked mixed response from farmers.
The factory started by Nalwadi Krishnaraja Wadiyar in 1933 fared well for decades but suffered losses from the late 1980s before it suspended regular operations a few years ago.
Though private players evinced interest in taking over its operations, the Government faced political opposition to it and Chief Minister Basavaraj Bommai announced on Monday that fresh efforts would be made to revive it.
Incidentally, the Karnataka Evaluation Authority — a government body which subjects all departments and projects for evaluation so as to help enhance performance — conducted an analysis of Mysugar’s performance in 2015.
Poor machinery
The report throws light on the reason for the gradual decline of the company and it pointed out that on an average, 11 hours per day were lost on account of mechanical and electrical problems besides other issues during the crushing season. Some of the machinery had outlived their utility as evident in the frequent breakdown and impacted productivity.
Though a cogeneration plant was established at a cost of ₹96 crore with a 30-MW capacity in 2007, it was idle for years. Shockingly, since its installation in 2007, the plant had functioned only for four hours till the evaluation period. The capacity utilisation of Mysugar was pegged at 35% as against 94% of a private sugar factory in the region.
The evaluation report said other factors affecting the company’s performance included steady increase in the overhead cost such salaries and other administrative expenses while no efforts were made to increase efficiency and employee productivity. Cost of production increased and this coupled with dip in revenue generation resulted in accumulation of losses besides interest liability.
Long process
Responding to the government’s latest move, Kurubur Shanthakumar, president, Karnataka State Sugarcane Growers’ Association, said that with the new development and the uncertainty over the factory’s fate continuing, it was the farmers whose misery would prolong.
“The constitution of an expert committee, its submission of the final report and the Government’s action on the recommendations will take time. For a majority of the cultivators it is immaterial as to who runs the factory as long as sugarcane is purchased and the payment made promptly,” he said.
Mr. Shanthakumar said that successive governments had released funds to the tune of ₹450 crore over the last many years for the factory’s modernisation. Yet the officials appointed to manage it have been unsuccessful in making it profitable. “There is a divide even among farmers’ leaders and organisations some of whom want the factory to be managed by the Government,” he added.
Atahalli Devaraj, general secretary of the association, said there were nearly 70 sugar factories in Karnataka of which only two or three were managed by the Government while the rest was managed by either private players or cooperatives.
N. Chandrashekar, a sugarcane cultivator from Mandya, pointed out that the factory was managed by the Government all these years and its track record was poor and hence persisting with it would not yield a different result.
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