UP sugar mills urge Adityanath to clear Rs 475 cr power dues

Apathy delaying Uttar Pradesh sugarcane farmers payments

Uttar Pradesh private sugar millers have urged the Yogi Adityanath government for payment of power dues owed by state power utility Uttar Pradesh Power Corporation Limited (UPPCL) to facilitate speedier settlement of sugarcane farmers’ arrears.

The mills supply bagasse-based power generated to UPPCL under power purchase agreement (PPA) during crushing season for on-grid supply to consumers.

However, UPPCL has not cleared dues of about Rs 475 crore pertaining to the previous 2016-17 crushing season. Interestingly, the state mills are bogged down by cane arrears of about Rs 750 crore for 2016-17 season despite several warnings by the Yogi government.

The power dues on UPPCL make up over 60 per cent of cane arrears on mills, although individual mills have varying amounts of power dues.

Earlier, Uttar Pradesh Sugar Mills Association (UPSMA) had written to the state cane commissioner seeking settlement of power dues in the larger interests of farmers, however, no progress has been made so far, an industry official told Business Standard on condition of anonymity.

He said settlement of power dues would enable mills for early settlement of farmers dues of both the previous as well as the current crushing season.

Balrampur Chini Group has maximum power dues on UPPCL at over Rs 110 crore, followed by DSM at Rs 70 crore and Dalmia Group at Rs 48 crore.

The sugar mills are engaged in biomass power cogeneration and the surplus power is exported to the state grid via UPPCL with the terms of settling bills for power supply needs within 30-60 days.

On the other hand, the Uttar Pradesh Sugarcane (Regulation of Supply and Purchase) Act 1953 stipulates payment of cane dues within 14 days, otherwise, additional interest penalty could also be imposed on mills.

Meanwhile, in the current crushing season of 2017-18, the sugar mills have so far paid the cane farmers over Rs 2,000 crore to farmers against cane purchases. Last year, the mills had paid farmers about Rs 467 in the corresponding period.

Besides, the mills had collectively produced about 1.28 million tonnes (MT) of sugar by crushing a little over 13 MT of cane with the sugar recovery standing at 9.8 per cent.

UP sugar industry and cane development principal secretary Sanjay R Bhoosreddy claimed sugar production and recovery of UP was more than other major sugar producing states viz. Maharashtra, Karnataka, Telangana and Gujarat.

According to latest statistics, against UP’s sugar output of about 1.28 MT, the sugar production in Maharashtra stands at 1.22 MT, Karnataka 0.41 MT and Gujarat 0.15 MT.

In the current season, the Yogi government has estimated UP sugar output to touch 11 MT and total farmers' payables at almost Rs 30,000 crore. Last season, UP had clocked sugar output of about 8.75 MT and the total payables were to the tune of Rs 25,386 crore. This season, the UP sugarcane acreage is estimated at 22.99 lakh hectares (LH), up 11.20 per cent, compared to 20.54 LH in 2016-17.