The Telangana government on Wednesday decided to take over the Nizam Deccan Sugars Limited (NDSL).
With the management failing to make payments to farmers even after procuring sugarcane from them, the government decided to take over the factory located in Nizamabad district.
The decision was taken after the government reached to a conclusion that the private management is not interested in running the factory, said to be the largest sugar factory in Asia.
Chief Minister K. Chandrasekhar Rao took the decision to save the farmers and workers, a statement from his office said.
He said the government will pay the arrears to farmers and run the factory.
He also constituted a committee of secretaries to work out modalities for running the company.
Located in Shakkarnagar in Bodhan town, the NDSL was set up in 1936 by the erstwhile Nizam of Hyderabad on 16,000 acres.
Popularly known as the Nizam Sugar Factory, it made profits for decades before turning sick.
In 2002, the government of N. Chandrababu Naidu in the then united Andhra Pradesh handed it over to Delta Paper Company under joint venture.
Later, a legislative committee appointed by Naidu's successor Y.S. Rajasekhara Reddy had recommended that government should take over the factory. However, the recommendation could not be implemented due to death of Reddy and subsequent developments.
Rao's Telangana Rashtra Samithi had promised during the movement for separate Telangana state and also during last year's elections that the government will take over the factory and restore its glory.