SUGAR COATED COVER UP: THE FACTORY OF MISMANAGEMENT?

Amidst the scenic beauty of the Western Ghats, there lies a small “outdated” sugar factory, in a huge 15 lakh square meters of land, a few kilometres from Tisk-Usgao.

A pal of gloom descends at the place as only a few workers, including security personnel, are seen moving around, not knowing what would be the fate of the factory in coming days.

For 46 long years, the Sanjivani Sugar factory, is continuously running under losses and there seems to be nobody to even acknowledge or put things in place until the losses reach a figure of over Rs 101 crore. That is the time when the State government wakes up and appoints an administrator to look into the management of the Sanjivani Sugar factory at Dharbandora.

Currently the factory and machines both appear to be in a dilapidated condition and they don’t seem to be in any condition to get back on its feet unless there are drastic changes made in the management and functioning of the plant and the administration.

Team Herald visited the factory at Dharbandora, met the administrator, farmers and had a closer look at the condition of the machinery, which looked “precarious and beyond repair”.

The machinery, more than 200 metres in length, seems completely corroded and the workers add that they fear for their lives when the machine starts due to way it vibrates.

“It sometimes feels like the machinery would collapse,” said one worker, who did not want to be named. 

He added that right from officers to the top level politicians; all are involved in scams, which have hurt the factory.

“This is the main reason nobody is taking any action on the guilty,” he said.

A conversation with the farmers and officials brought to the fore, major revelations such as the fact that the factory never made profits in its 46-year-tenure except of minor profits for seven years - in 1989-89, ‘89-90, ‘91-92, ‘93-94, ‘95-96 and ‘96-97.

Further investigations by the team revealed that more than the sugarcane shortage or machinery it was the mismanagement, manipulations and corruption that have hurt the fortunes of the factory more.

The factory has been hit by several scams and till date none of the guilty, have been brought to books.

While the officials ruined the factory, it was the farmers who have suffered the most as the factory has closed operations.

Though their produce was sent to Khanapur factory for crushing this year, they are uncertain what is in store for them next year.

The usual sugarcane crop harvesting starts from the month of November-December every year depending upon the progress of the monsoon, rainfall and overall climatic conditions, the farmers informed adding during this season the area under sugarcane cultivation is about 811 hectares.

The Administrator of the factory Damodar Morajkar informed that the plant and machinery of the Karkhana is very old which results into frequent stoppages.

Morajkar informed that the machine acquired was installed in 1973 was a second hand machine, which was purchased from a factory in Uttar Pradesh.

“The spare parts of the machineries are of old and outdated technical specifications, which are not readily available in the market and due to the above factors. Further, because of shortage of availability of sugarcane, the plant is not operating continuously up to its full capacity,” he said.

He said that the factory has been incurring losses since inception and the present accumulated loss is RS 101,22,92,823/-.

He says the losses are largely due to the fact that the machinery is old and breaks down often.

“Last time a plate broke down and we had to send it to Gurgaon for repair and had to wait for almost 2 months to restart operation,” he recalled.

Morajkar also acknowledged the fact that the factory was not getting enough sugarcane and hence it was imported from neighbouring states.

“Ever since the start of the factory, there has been no improvement in cultivation. The land which the factory has is also not being utilised to cultivate cane,” he lamented.

He added that the plant, though an aged one, can crush 1250 tonnes a day but since not enough cane was there the operations have to be stopped.

“The machine runs well when it is continuously working,” he added.

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Problems Aplenty

Further investigations by Team Herald revealed that there were several scam and scandals the factory has seen and following are few of the various irregularities in the operations of the plant:

Irregularity 1: Manipulations

The actual ratio of the sugarcane entering the factory and the sugar produced has to be between 14 to 16. However, in case of Sanjivani Sugar factory it is hardly 7.5 to 8%.

The reasons for this start right from the weigh-bridges when the sugarcane is entering figures are manipulated, which shows nexus between officials and transporters.

Irregularity 2: Molasses

Sugarcane molasses is a viscous, dark and sugar-rich by-product of sugar extraction from the sugarcane. It is a major feed ingredient, used as an energy source and as a binder in compound feeds. Both the sugar extraction process and the sugar refining process yield molasses, and each step of these processes output specific types of molasses. 

Sources revealed that the molasses quality differs when the sugarcane is crushed properly. However, here in Sanjivani, the top grade quality of molasses was sent out to buyers outside Goa for personal benefits without obtaining the optimum quantity of sugar which led to huge losses for factory.

Irregularity 3: Maintenance & thefts

Given that it is almost six-decade-old machinery the plant has an annual maintenance cost of nearly Rs 2-3 crores every year, which led to huge losses.

Sources reveal that often the machinery broke down and the repair bills were inflated for personal benefits by the officials. In last five years the machinery maintenance cost has surpassed Rs 10 cr.

It also came to fore that several spare parts of the machinery including several high powered motors have gone missing from the factory. No complaints have been lodged in this regard though.

Irregularity 4: Tender scams

While the factory was going into losses, sources reveal that the sugar produced was often sold below the tendered amount as per whims and fancies of officials.

A case in this regard was lodged but no outcome yet.

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RECENT SCAMS IN SANJIVANI

1)   Rs 6 crore scam harvesting scam

In 2017, a police complaint was lodged as an amount of Rs 6 crore was paid to a contractor for providing gangs for harvesting but the contractor never turned up.

No headway in the police investigations so far and the administrator, who is a Goa Civil Services officer, continues to enjoy plum posting in the government.

2)   Officials suspended after video alleging scam went viral

In May 2019, two Sanjivani sugar factory officials were suspended following a video on social media levelling corruption allegations against them to the tune of Rs one crore while issuing a tender for sale of sugar manufactured at the factory. 

Hour-long video have five clips, showing two persons engaged in a conversation and taking names of a factory official, alleging he was paid Rs one crore for sugar deal. 

It is learnt that the sugar factory officials floated the tender for sale of sugar produced in factory. The 30,000 quintal sugar stock produced was sold to Hubli-based contractor at Rs 7.5 crore. 

Based on the video evidence, the employees alleged that the officers sold the good quality sugar at lower rates with an excuse that the sugar quality was affected due to moisture in the godown; which they termed as false and claimed that in a secret deal with the contractor, good quality sugar was sold quoting a lower rate.

Gomantak Majdoor Sang (Sanjivani Employees Union) General Secretary Puti Gaonkar urged the Chief Minister to conduct a Vigilance Committee probe into Sanjivani Sugar Factory scam and also inquiry into the working of its administrator. 

“In order to save the factory from scams a probe into sugar deal is necessary,” said Gaonkar.

“There was a quotation for purchase of sugar at Rs 28 per kg. But instead of selling sugar for a higher rate it was sold at a lower rate. The lowest rates were quoted by three members of one family at Rs 22, Rs 22.50 and Rs 25 per kg,” Gaonkar alleged.

3. Molasses scam

In January 2020, the president of the Sanjivani Sugarcane Farmers Association Rajendra Dessai called for an inquiry into molasses tender scam. 

Suspecting that there is something amiss with the low quotation of Rs 2,550 per tonne compared to the prevailing market rate of Rs 7,000, Dessai had called for the sale deed to be scrapped until the inquiry is completed. 

Dessai pointed out that there are around 1,088 tonnes of molasses stock at the sugar factory. 

He added that Goa Dairy is one of the purchasers of molasses and that during the past couple of years; they had purchased molasses at the rate of Rs 8,000 to 9,000 per tonne.

He said Goa Dairy uses it for their cattle feed production. Dessai added that this year also Goa Dairy had sent a letter to the Sanjivani Sugar factory stating that they are willing to buy 500 metric tonnes of molasses.

Dessai questioned why the factory had decided to sell it to a bidder quoting the lowest rate of Rs 2,550 per tonne instead of a regular client like Goa Dairy. 

However, Cooperation Minister Govind Gaude rejected allegations of scam in tendering molasses.

He had directed to send the molasses at authentic lab for proper valuation. 

He said the administrator has invited tenders at least on four occasions besides online and in open market, however there was no response from bidders.

Administrator Morajkar says that the lab test proved that molasses was of A+ category and as such there was question of any irregularity.

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Co-operation Minister says govt backing Sanjivani

Apart from the Rs 101 crore accumulated loses of the factory, the State government has also given grants to the factory in form of subsidy and financial aid, the factory has made losses of another Rs 100 plus crores.

The State Government has provided financial assistance in form of Share Capital of Rs 98.27 crores and loan of  RS 10.75 crores to the Karkhana.

Besides the above grants, the government has also leased out 15 lakh square meter of land to the karkhana, and more than 90 per cent of that remains unutilised till date.

However, the government seems to be in no mood to spend even a rupee now.

Asked whether there is any proposal from the State government for up-gradation of Sanjivani Sugar Factory at Dharbandora to improve the quality and quantity of production, Co-operation Minister Govind Gaude says the government now intends to carry out a feasibility study on setting up of a new plant.

“The day-to-day working of the Karkhana is being managed by Administrator appointed by the government and there are 3,565 number of farmer members who are holding shares of the Karkhana,” he said. 

Gaude said that a proposal was received from Sanjivani Sahakari Sakhar Karkhana Ltd, Dayanandnagar, Tisk for modernization/ upgradation of Sugar factory through Rashtriya Krisi Vikas Yojana (RKVY).

“The proposal after conveying administrative approval of the Government was referred to the Director, Directorate of Agriculture, which was placed before the State Level Project Screening Committee on 21/05/2019 for its consideration. However, The State Level Screening Committee rejected the up-gradation proposal since experts of Vasantdada Sugar Institute, Pune suggested that a new   plant can be installed by spending amount of RS 35 crore   to  RS 40 crore in addition to the up gradation cost of  Rs 36.64 crore and to  avoid further repeated work of old machinery of Karkhana,” Gaude stated.

He said that the preparation of the DPR on new sugar plant under RKVY is under process by the Director of National Sugar Institute, Kanpur, Government of India.

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Chief Minister assures support and solutions

Chief Minister Pramod Sawant met the delegation of agitating Sanjivani sugarcane farmers and assured them to come out with a solution.

The delegation included Association President Rajendra Desai, Harshad Prabudesai and others. 

During the meeting held in Panjim, which was also attended by Co-operation Minister Govind Gaude, Registrar of Co-operative Societies (RCS), Goa and Administrator of Sanjivani Sugar Factory, the Chief Minister gave a patient ear to the farmers and sought some time to study the issues and assured to come out with a solution before February 20. 

Sharing details about meeting, Harshad said, “The farmers had informed the Chief Minister that the government should begin the next crushing season at Sanjivani factory. If not, then it should come out with an alternative solution.” 

Harshad added, “900 sugarcane farmers’ livelihood depends on Sanjivani Sugar Factory and as such they should get their bill payments on time.” The farmers said they have been paid up to December but January bills towards supply of sugarcane to Karnataka factory are outstanding.

The farmers said if they get their bill amount on time only then they would be in position to cultivate sugarcane for the next season. 

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Politicians are scheming to grab sugar factory land: Union leader

Sanjivani Sugar Factory workers’ leader Puti Gaonkar alleged that some politicians are scheming to grab the vast land belonging to the factory, while others are conniving to sell the land at throwaway price.

Speaking to Herald, Gaonkar appealed to Chief Minister Pramod Sawant and Co-operation Minister Govind Gaude not to close down the factory.

“Instead of closing down the factory, the government should modernise it by roping in experienced officers working in the co-operative sectors in Maharashtra,” he said. 

Opposing closure of Sanjivani factory on the grounds that it is suffering the losses, Gaonkar said that the supposed loss incurred by the factory was in fact a scam committed by an official.

“The co-operation minister said that the factory suffered loss of Rs 6 crore for the year 2017-18; this is not an actual loss. It was a scam by an official Umeshchandra Joshi who gave Rs 6 crore to a contractor for hiring workers for cutting sugarcane which he never did,” he added. 

“In fact, to cut the loss of the factory, the workers are paid poor salary,” he commented further.

He also added that the factory can be run profitably if competent officials are appointed and the factory is modernised.  “The motive behind closing down the factory is to grab the land or sell it to industrialists at a cheaper rate,” he argued.

He claimed that the “corrupt and incompetent” officials running the affairs of Sanjivani Sugar Factory are responsible for the losses of the factory. 

He said that Goa’s first Chief Minister Dayanand Bhausaheb Bandodkar started the factory to protect the interests of the farmers and provide employment to the youth. “But corrupt people have run it into loss. If this factory is closed down, then, hundreds of workers, farmers and truckers will be deprived of their livelihood,” he warned.

He suggested that Gaude should study the report prepared by the committee appointed by former agricultural minister Vijay Sardesai for the revival and modernisation of Sanjeevani Sugar Factory. 

Gaonkar informed that under the Rashtriya Krishi Vikas Yojana, there was a proposal for modernisation by obtaining loans.

He suggested that projects like shopping, ethanol plant, drinking water bottle plant etc can be started on Sanjivani land to bring it into profit.

He alleged that since past five years some politicians, in connivance with the officials, are extracting laterite stone illegally on the land belonging to Sanjivani Factory. “If this business is operated legally, the factory could have earned huge revenue,” he said.

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Give a new lease of life to Factory: Farmers association

Sanjivani Sugarcane Farmers Association President Rajendra Desai said the government should not close the factory operations but it should give it new lease of life as thousands of sugarcane farmers and their families’ livelihood depend upon it.

“It is the only sugar factory in Goa and the government should find out the reasons for it going to losses,” he added.  

He further pointed out that the government had time and again given assurances to conduct a feasibility report for a new plant and also appointing a consultant for it; however there is no sign of such report yet.

“Instead of promises, the government should make it clear to us about the future of Sanjivani Sugar Factory.  Currently we are supplying our cane to the Karnataka factory. For this, we were assured of payment of our bills towards sugarcane supply after every fifteen days - but we are struggling to get the same. We have been paid up to December, while January and February bills are outstanding,” he said. 

He added that all the thefts that have occurred in Sanjivani Sugar Factory should be investigated.

“Mere reporting cases to Police are not sufficient,” he added.

Accumulated loss    (in lakhs)

Total accumulated losses  ---    Rs 101.22 cr

SUGAR PRODUCTION

PERMANENT STAFF ....114

CONTRACT BASIS ....90

Daily wages...4

DETAILS OF SHAREHOLDERS

REPAIRS & MAINTAINANCE (in lakhs)

Government Subsidy (in lakhs)

Rate at which produce  purchased from Farmers