Article Today, Hyderabad: A major controversy is brewing over the construction of a mega oil palm processing factory in Narmetta, Siddipet district. The Oil Palm Growers Association has accused senior officials and political leaders of misusing public funds and misleading farmers. The association claims that a trio of key officials—Surender, Sudhakar Reddy, and Sreekanth Reddy—collectively referred to as the “Triple S”—engineered the project with vested interests. The association suspects a pre-planned scam masked as a development initiative.
Factory Location Raises Doubts
The association questioned the very logic of constructing such a large-scale factory in Siddipet, where oil palm cultivation is minimal. They argue that this location lacks the raw material needed to justify the Rs.247-crore investment. Despite a change in government, the Congress administration has continued the project, raising concerns about political collusion. Farmers’ groups are demanding answers on how this decision aligns with broader agricultural interests.
Questionable Viability of Production
According to data in the association’s report, only 1,600 Tonnes of oil palm fruit were produced in Telangana last year—excluding Khammam district. This year, production may reach 15,000 Tonnes, yet the Siddipet factory alone requires 600 Tonnes per day to operate efficiently. This means the factory could run for just one week on current supply, leaving its future uncertain. Officials claim otherwise but offer no data to support their optimism.
Diversion of Produce and Shutdown Fears
The report also alleges a conspiracy to shut down existing oil palm factories in Ashwaraopet and Apparaopet. The association fears that fruit from these areas will be diverted to Siddipet through rigged tenders, falsely projecting the new factory’s success. Similarly, crude oil from these locations may be transported to Siddipet for refining—an exercise that increases costs without added value. They question why smaller, decentralized factories are not being preferred instead.
Backdoor Privatization Suspected
The association further warns that existing factories may be shut down under the pretext of losses, while the Siddipet plant could later be handed over to a private company through a benami arrangement. Sreekanth Reddy, an Oilfed official, is allegedly acting as the undeclared CEO of this private entity, managing the project from behind the scenes.
Nursery Mismanagement Adds to Concerns
There are currently around 7 lakh oil palm saplings across Telangana’s Oilfed nurseries, including those in Siddipet. However, farmers are not planting them, indicating a lack of trust. Shockingly, tenders have been floated to shift these saplings to Bhadradri Kothagudem, suggesting manipulation and possible wastage of public resources. The association says this move signals deeper mismanagement within the department.
Factory Capacity Designed to Inflate Costs
The Siddipet factory is being built with an initial capacity of 30 TPH (tonnes per hour), with plans to expand it to 120 TPH. At 30 TPH, the plant would process 600 Tonnes per day—assuming 20 hours of operation. But if the actual supply falls short, it leads to machinery underuse, energy loss, and efficiency dips. Even the Oilfed’s own affidavit in the High Court confirms that low operational loads result in poor output efficiency.
Better Alternatives Ignored
Experts argue that smaller mills with 5–10 TPH capacity would be more suitable for the region. For example, the first oil palm mill set up in Ashwaraopet in 2005 had only a 5 TPH capacity and served its purpose well. Moreover, vertical mill technology allows low-capacity plants to be set up with just Rs.30 crore on 5 acres of land. By contrast, the Narmetta factory is expected to cost nearly Rs.300 crore—an avoidable expense, according to the association.
Unnecessary Additions Raise Eyebrows
Despite limited need, authorities are building a Rs.33-crore Multiple Effect Evaporator (MEE) and a Rs.50-crore Co-generation power plant within the Narmetta facility. The association claims these additions serve no functional purpose and exist solely to inflate project costs and enable commission kickbacks. Farmers question why such high-cost infrastructure is being set up for a plant that might not even run for a month.
Call for Immediate Scrutiny
Oil palm farmers are demanding a government probe into the project and suspension of all works until a detailed audit is completed. They fear that without transparency, this could become another example of how public money is siphoned off under the guise of agricultural development. The association urges the government to reconsider the project structure and focus on farmer-friendly, decentralized solutions.
