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UP govt makes fresh bid to sell off sugar mills

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Press Trust of India Lucknow
Last Updated : Jan 20 2013 | 10:14 PM IST

The Uttar Pradesh government is making another attempt to disinvest in the sugar mills owned by the UP State Sugar Corporation(UPSSCL) and UP Cooperative Sugar Factories Federation (UPSFF) after failing to do so twice in the past.     

The government has invited fresh Expression of Interest and Request for Qualification (RFQ) for 11 of the state-run UPSSCL and 24 UPSFF sugar mills.     

"This time it had been planned to sell off these units by September before the next crushing season starts," a senior cane development department official said.     

He added an advertisement inviting investors willing to buy these units had already been issued.    

"While last date for submission of RFQ for UPSFF units is July 17, the cut off date for UPSSCL units had been fixed on July 21."

In addition to this, separate bids have been invited for valuation of the UPSSCL units.    

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There are 33 UPSSCL and 28 UPSFF sugar mills in the state. Sources said increasing losses of these mills had necessiated the disinvestment.

The first disinvestment attempt was made in 1995 by the Mulayam Singh government which had failed.    

Last August, the Mayawati government had made an attempt to disinvest all UPSSCL and UPSFF units and invited bids from the private investors.      

"Initially none of the private investors came forward to invest in these sugar mills. Later on three firms applied for 33 units of UPSSCL, but the price they quoted was very low. As against the assets evaluation of Rs 2,200 crore, around Rs 600 crore was offered by the private investors, after which the process was scrapped," the official said.    

In last crushing season, only 14 of the 33 UPSSCL mills were operational. "Non-functional units are adding to he cumulative losses of the state government," he added.     

The official shared that the government, learning from past experiences, had changed its policies. "This time it had been decided that instead of going for bulk selling, individual units will be for sale. For instance if a private investor wants to buy only one unit, he will be able to apply for the same," he explained.    

Also, instead of selling all the 33 units of UPSSCL, disinvestment of only 11 profit-making units will be done in the first phase.    

These units include Amroha, Bijnore, Bulandshahr, Chandpur, Jarwal road, Mohiuddinpur, Saharanpur, Sakautitanda, Rohanakalan, Siswa Bazar and Khadda.

Among UPSSFF units, the official said, it had been decided to exclude those sugar mills, which are caught in litigation, so as to make the offer more lucrative.    

"There are four units including Dhuriyapar, Majhola, Morna and Nanauta for which cases had been filed by the farmers, who are stakeholders, therefore these sugar mills have not been included in the list of privatisation."

"On an average these sugar mills are costing Rs 400 crore annually to the state government," he informed.    

Sources said the government had planned to finalise the technical bids by the first week of August. After the bids are finalised, meetings with the possible investors would take place in Delhi. "Efforts would be made to finalise the financial bids (Request for Price) by August-end and the whole process is completed by September," he added.   

To attract investors, he said, the government had relased funds for repair and rennovation of sugar mills.    

"To ensure that all the mills are in working condition Rs 2 crore per unit had been released by the state government," the official shared.

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First Published: Jul 08 2009 | 4:30 PM IST

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