HC stays privatisation of 28 co-op sugar mills in UP

The Allahabad High Court has put a stay order on the privatisation process of 28 sugar mills and 3 distilleries belonging to the UP Co-operative Sugar Factories Federation Ltd (UPCSFFL). The privatisation move was initiated by the Uttar Pradesh government.

"The farmers who are also shareholders in these mills had moved to the court challenging the government's move to privatise the mills. Following this, the Allahabad High Court on Tuesday gave a stay order, till August 23, on the privatisation process of these cooperative mills and distilleries," said sources in the sugar industry.

However, the privatisation of 33 mills and 4 distilleries under the UP State Sugar Corporation (UPSSL) and its subsidiaries can be carried on.

While the state government had initially planned to complete the privatisation process, including the legal transfer of assets of these mills by September 29 (to coincide with the new sugar season, beginning October), the legal stay order could delay the process.

In July, the state government had decided to go ahead with the privatisation or sale of all the 33 mills and 4 distilleries belonging to the UPSSL and its subsidiaries. It also planned to privatise 28 mills and 3 distilleries belonging to the UPCSFFL.

The combined crushing capacity of the 28 co-operative mills is 69,125 tonnes crushed daily (tcd), while that of the 33 corporation mills is 51,254.5 tcd. Each of the 7 distilleries has a capacity of 30 kilolitre a day (1 kilolitre=1,000 litres). Their combined capacity stands at 210 kilolitres a day.

In 2006-07 sugar season (October-September), the 28 cooperative mills crushed 10,565,000 tonnes of sugarcane to produce 915,000 tonnes or 10.8 per cent of the state's total production of 8,478,000 tonnes.