Deogaon: The proposed revival of Bijayananda cooperative sugar mill at Sagarpalli under this block in Bolangir district hangs in balance while the state government has initiated the process for auction of the mill. The state cooperative department has issued a notice inviting online applications for auction of the movable and immovable properties of the sugar mill, August 7.
The sugar mill is lying closed since a year after being declared insolvent due to an outstanding loan of Rs 52crore. The mill was crushing 2,500mt of sugarcane and transacting a business of Rs 80crore per year until its closure in 2014.
Earlier this year, the district administration had announced plans for revival of the sugar mill during a meeting with various stakeholders. The closure of the sugar mill resulted in loss of jobs for 300 employees while over 7000 sugarcane farmers, traders and transporters lost their livelihood.
The auction notice has dimmed the hopes of the employees and sugarcane farmers as they are not sure whether the firm which will acquire the sugar mill will make it operational or not. They wonder as to who will evince interest in taking over the sugar mill of Rs 11crore, having a pending loan of Rs 52crore. Moreover, the firm that will acquire the sugar mill will take its own time to make the mill operational and prepare a plan in advance to give incentives to sugarcane farmers for carrying out cultivation and buying agricultural implements.
Sources said the sugar mill was established over 86.49 acres of land near Sagarpali by a Tamil Nadu based firm, Poni, in 1993. The mill successfully ran for seven years before being shut down by the authorities citing financial loss, in 2000. The mill’s creditor, ICICI bank, took over the possession of the mill. Later, the mill was revived by the efforts of senior leader Jagneshwar Babu in 2004 while its ownership was transferred to the cooperative sector after its registration under the cooperative Act of 2001.
The mill started functioning with a Rs 5crore fund sanctioned by Western Orissa Development Council (WODC) and Babu became its chairman. However, during Babu’s tenure from 2005 to 2013, the mill borrowed Rs 38.46crore from the Orissa State Cooperative Bank, and Rs 2.48 crore from Indian Overseas Bank. The total borrowings including interest went up to over Rs 52crore after the authorities failed to repay the loan.
The state government acquired the sugar mill in 2013 and made it operational with an investment of a Rs 1.20 crore fund from the Bargarh sugar mill. The sugar mill ran for three months during which the state government, by selling the manufactured sugar, settled the dues of the employees, sugarcane farmers and the power bills. However, due to administrative apathy and lack of political will, the mill was closed down in 2014. PNN