The Uttar Pradesh government has deferred the bidding for the 22 cooperative mills in the state by another 2 months due to legal hurdles.
Earlier, the government had put 22 federation units for divesment. However, the process has been stalled as it has been challenged by the cane societies and directors of some of these federation mills in the Allahabad High Court.
According to the state sugarcane department, the next date of hearing is August 10 in the Lucknow Bench of the HC. While, the Request for Qualification (RfQ) date for 7 mills has been extended to August 19, the Request for Proposal (RfP) date for the remaining 15 mills is August 20. There are a total 28 federation mills in UP.
Unless, the court allows the divestment process to move ahead, the bidding will extend by default, a senior government official told Business Standard adding “we are waiting for the court to vacate the stay on their divestment.”
Earlier, state sugar federation managing director C P Mishra had said the government was hoping to complete the sale process before the start of the next crushing season in October 2010, once the court case was settled.The expected price of the 15 federation mills is valued at over Rs 1,400 crore and their combined crushing capacity is over 42,000 tonnes crushed per day (TCD) of sugarcane.
Meanwhile, the state cabinet is yet to decide on the divestment of the 11 UP State Sugar Corporation Limited (UPSSCL), whose bids were opened in the first week of this month.
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On May 28, the Supreme Court had allowed the government to proceed with the divestment process of the UPSSCL units subject to the final adjudication on the petition filed by Rajiv Kumar Mishra.
The SC had observed that any action taken by the respondent (UP government) shall be subject to the final outcome of the petition (challenging the divestment).
Mishra had challenged the powers of the state and the UPSSCL to divest these units. Earlier, Allahabad HC had allowed the proposed disinvestment with the rider that the mills were not closed down and their land usage pattern remained the same. The prospective bidders for these mills, include Bajaj Hindusthan, Indian Potash, Wave Industries, Lakshmi Sugar, Dalmia Sugar, Patel Engineering, SBEC Bioenergy, Tikaula Sugar Mills, Dwarkesh Sugar Industries, Balrampur Sugar, Triveni Engineering, Rama and Oswal Groups.
The divestment process was set in motion after Mayawati came to power in May 2007, but it has been facing challenges on multiple fronts, including lack of interest among private parties and litigations.