Kottayam: The food and civil supplies department has issued a letter to the finance ministry seeking Rs 500 crores for solving the Supplyco crisis. In the letter, it was informed that the agencies and companies providing food items are not cooperating with Supplyco since the latter owes them around Rs 1,500 crores.

The main demand is that the primary share of the money that the state government is going to borrow from the centre shall be allotted to the Supplyco. Infact, the CPI leadership which deals with the Supplyco affairs also views the situation seriously as they feel the shortage of food items in the state might negatively affect the party’s LS polls prospects.

Despite continued efforts, adequate supply of food items could not be ensured in Supplyco as the outlets are running short of supplies. Unless adequate supply of food items are ensured, the Supplyco would not be able to benefit from the price rise in the general market, it is pointed out. 

Though the government had tried to procure food items through the public distribution systems of neighbouring states like Karnataka, Telangana and Andhra Pradesh, the efforts have not succeeded. 

The Karnataka civil supplies refused to cooperate, said Supplyco officials.Andhra Pradesh could not extend their support as there are not enough stock and the state could not afford the prices offered by Telengana as it was too high. 

If Supplyco decides to procure food supplies at rates higher than what is agreed upon by the Kerala government, then it would lead to audit problems.

There are efforts to calm down the agencies and companies via the bill discount scheme. In this method, the pending amounts shall be credited to these parties in the form of bank loans.

In such cases, the interests of such loans shall be partially borne by both the state government and the beneficiaries. However, the companies refused to agree with the proposed ‘partial interest’ method. To make things worse, the banks refused to grant loans to Supplyco as well. The parties could not come into a consensus even after it was decided to grant a government guarantee instead of the Supplyco guarantee.