Outstanding payments: Defaulting sugar mills face auction

Govt tightens procedure for sugarcane payments

LAHORE: The provincial government has started the proceedings to confiscate properties of five out of nine sugar mills which have failed to clear their dues to sugarcane growers.

According to the cane commission’s office, Chishtian Sugar Mills in Sargodha, Brother Sugar Mills in Kasur, Abdullah Sugar Mills in Okara, Abdullah-II Sugar Mills in Sargodha, Haseeb Waqas Sugar Mills in Nankana Sahib, Colony Sugar Mills in Khanewal, Shakar Ganj–I Sugar Mills, Shakar Ganj–II Sugar Mills in Jhang and Hussain Sugar Mills in Faisalabad are in default on payment to sugarcane growers.

Cane Commissioner Nasir Bashir told The Express Tribune that advertisements for auction of the sugar mills had been published in newspapers, following which four of the nine sugar mills had cleared their dues. He said the rest should clear the payments or face auction. Bashir said Chishtian Sugar Mills, Brother Sugar Mills, Abdullah Sugar Mills, Abdullah-II Sugar Mills and Haseeb Waqas Sugar Mills had still to pay up. The cane commission said these mills owed the growers Rs2.2 billion. He said mills which had not paid growers were stopped from working this season.

“The crushing season started on December 1,” Bashir said, “Mill owners have been told to clear their dues by selling the stock they have in their warehouses, before starting crushing.”

Last month, the Punjab government had empowered the cane commissioner, through an ordinance, to determine the amount owed by sugar mills and confiscate their properties to pay the dues.

Assets of sugar mill owners can now be seized on the recommendation of the cane commissioner.

Under the Punjab Sugar Factories Control (Amendment) Ordinance 2015, notified to amend the Sugar Factories Control Act 1950, it is the prerogative of the government to determine the minimum price for cane to be paid by factories or their purchasing agents.

Under the law, the owner of a factory or a purchasing agent cannot make any deduction from the amount.

Payments should be made within 14 days. Otherwise 11 percent interest per annum on the original amount.

Ammar Majeed, a cane grower from Khanpur, said the ordinance was a welcome move. “This will punish the sugar mills mafia and safeguard rights of growers,” he said.

He said auctioning of the sugar mills to clear the dues might not be enough. “The government should consider prosecuting them,” he said.

He said most mill owners were politicians and frequently exploited the cane farmers.

Majeed alleged, “Ittefaq Sugar Mills, owned by the prime minister’s family has yet to clear its dues but no action has been taken against them.”

The cane commissioner rejected this claim.

“Claims of payments owed by Ittefaq Sugar Mills are baseless,” he said. He said his office had not receive any complaints in this regard. He added, “These sugar mills belong to the prime minister’s extended family. So does Haseeb Waqas Sugar Mills and Abdullah Sugar Mills but action has been taken against them.”

A representative of Pakistan Sugar Mills Association said mill owners were opposed to the new law imposing interest on delayed payments.

“Sugar mills have at least 1 million metric tonnes sugar in stock and the crushing season has started. We will have to buy sugarcane to start crushing and are forced to clear payments within 14 days. The government should at least allow us to export the surplus product in stock.”

Published in The Express Tribune, December 3^rd, 2015.