Reopening Of NDSL Delayed As Talks With Private Firm Remain Unresolved

The lack of an agreement with private firm Delta Papers Limited is said to be the reason for the delay. Traditional sugarcane farmers are worried as the factory has remained closed for 11 years.

While most farmers have shifted to other crops, particularly paddy, a few traditional sugarcane growers continue cultivation and send their produce to a private sugar factory in Kamareddy for crushing. As a result, the area under sugarcane cultivation has declined sharply.

The seventh Nizam, Mir Osman Ali Khan, established a sugar factory at Shakkarnagar near Bodhan in Nizamabad district in 1937. As part of its expansion, two more units were established in 1985 — one at Mutyampet in Mallapur mandal of Jagtial district and another at Munjojupalli in Medak district.

In 2000, the then government sold a 51 per cent stake to Delta Papers Limited, citing losses. At the time, there were allegations that properties worth `300 crore were sold to the private firm for `26 crore.

After coming to power in 2004, the then Chief Minister Y.S. Rajasekhar Reddy constituted an eight-member committee headed by Buggaram MLA Juvvadi Ratnakar Rao to examine the alleged irregularities.

The committee submitted its report to the government in July 2006 and recommended immediate cancellation of the joint venture agreement between NDSL and Delta Papers Limited. However, the recommendations were not implemented before the government’s term ended.

During the 2014 election campaign, BRS president K. Chandrashekhar Rao promised to take over the factory from the private management. The BRS government instead closed the three units by announcing a lay-off on December 23, 2015.

The Congress, which had promised to reopen sugar factories during the 2023 Assembly elections, constituted a Cabinet sub-committee headed by IT and industries minister D. Sridhar Babu after coming to power.

The committee visited the factory and interacted with farmers before submitting its report. Based on the report, the government cleared `190 crore in bank loans under a one-time settlement against pending dues of `400 crore.

Speaking to Deccan Chronicle, Sugarcane Growers Association president Mamidi Narayana Reddy said the reopening had been delayed as the government had failed to reach an understanding with Delta Papers, which holds a 51 per cent majority stake.

The sugar factory issue has become an election issue for political parties. The Congress constituted a committee before the 2024 Lok Sabha elections.

Before the municipal elections, officials led by Welfare Minister Adluri Laxman Kumar held a meeting with farmers of the Mutyampet sugar factory and promised to reopen the unit. However, there had been no progress since then, he said.

Sugarcane farmer Nyavanadi Limba Reddy criticised the government for constituting committees without reopening the factory. He said the government had promised to reopen the factory by December 2025, but this had not happened.

Except for clearing `190 crore in pending loans under a one-time settlement, no budgetary allocations had been made for reopening works, he said. The machinery at the unit was also not suitable for resuming crushing operations, with some equipment requiring replacement with new machinery and updated technology, he added.

Political parties had been using the sugar factory issue during elections. Before being elected, Nizamabad MP Dharmapuri Arvind took out a yatra from the Mutyampet sugar factory to the Nizamabad market yard and promised to run the unit by purchasing it. After the election, he blamed the then Chief Minister K. Chandrashekhar Rao, the report said.

The area under sugarcane cultivation for the Mutyampet factory has declined to 1,500-2,000 acres from 8,000-10,000 acres during the 11 years since the unit was closed.