Uttar Pradesh government has deferred the strategic sell-off and transfer of assets of seven loss-making co-operative sugar mills till March 8 due to court stipulations on the process, a state government official today said.
"The decision had been taken following court orders barring us to seek request for proposals for the sale of these mills. A court decision about the fate of these mills is likely soon," said registrar of Cooperative Sugar Mills Society of Uttar Pradesh Sudhir M. Bobde.
The strategic sell-off is aimed at improving profitability and output of these loss-making units.
IFCI Ltd, who are advisors to the Uttar Pradesh government for the sale of these sugar mills, had put out a notification today saying that submission of request for proposal for the sale of these mills have been delayed till March 8.
Tenders for sale of the seven co-operative mills in the second-largest sugar producing state in the country were originally brought out during October 2008 and had been delayed since then for several reasons.
Earlier the state government had also sought to divest its stake in 17 sugar mills belonging to the Uttar Pradesh State Sugar Corporation Ltd and had initiated process to do so during August last year.
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Uttar Pradesh has 154 sugar mills, of which about 132 are functional.
"The sale of these mills are also suspended for the time being on court orders, though technical selection of bidders has been done already. A judgement on the state government decision to privatise the UPSSCL mills is likely due on Wednesday," Bobde said.
Uttar Pradesh is looking to sell 35 government-run sugar mills in the state as the outdated equipments in these mills and large number of employees in these mills had been bleeding the state exchequer.
"They had become uncompetitive and only private efforts could revive them. We are trying very hard to keep them from being a drain on public revenue," Bobde said.
Large private companies such as Triveni Engineering Ltd, Simbhaoli Sugars and Dwarikesh Sugar Industries Ltd, had shown interest in taking over these government-run sugar mills.