HYDERABAD: The House Committee of the Andhra Pradesh Assembly on the Government-owned Nizam Sugars Limited, headed by J. Ratnakar Rao, has reportedly come out with some startling revelations about the formation of joint venture by the previous Telugu Desam regime.

Firstly, the committee concluded that there was no need for the then Government to club the loss-making units with those making profit even if it wanted to sell some of them.

The proposal of the Delta Paper Mill (DPM) of West Godavari district for a joint venture should have been rejected outright by the Implementation Secretariat.

Exemptions allowed

The private company reportedly did not make any payments for taking over either NSL Sugar Mill and its distillery and 171 acres of land (valued at Rs. 30 crores) at Shakarnagar in Nizamabad district or the two NSL units of Karimnagar and Medak. The then Government, in turn, allowed exemptions, concessions, waiver of loans and made VRS payments to the tune of Rs. 300 crores.

Another irregularity reported by the committee was the conduct of a Cabinet Sub-Committee meeting on December 31, 2001, to consider the DPM proposal wherein no member of the panel attended the meeting.

Recommending immediate cancellation of the joint venture, the committee noted that the DPM, which agreed to pay statutory minimum price and additional incentives to cane growers on a par with others, failed to do so. Instead, it preferred deductions from payments on various grounds causing loss to cane growers.

It had not invested money on cane development as promised which resulted in 50 per cent fall in the crushing capacity of the joint venture from an yearly average 4.30 lakh MTs to 2.5 lakh MT.

Employees removed

A large number of permanent employees were removed on oral orders, it was found.

The sale deeds too were irregular on several counts. The first one was executed for the transfer of four units and 101 acres of NSL on February 24, 2004, and the second one on May 20, 2004.

It found fault with the Implementation Secretariat for having delivered the land to the DPM without receiving any payments.

Another disclosure is the omission of the machinery sold and under-valuation of its assets.

The previous House Committee and the Government were not informed of the repayments of loans to the tune of Rs. 163 crores against total loans of Rs. 238 crores made by the NSL management.

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