A high-level committee of the Uttar Pradesh government today disqualified the financial bid of consultancy firm Ernst & Young (E&Y) to facilitate the privatisation of 25 ailing cooperative sugar mills in the state.
Three firms including E&Y, IFCI (formerly Industrial Financial Corporation of India) and Tecmak had submitted their technical and financial bids following the open global tender floated by the UP government inviting Request for Qualification cum Request for Proposal (RFQ-cum-RFP) in this regard on July 19.
The technical bids were opened yesterday, in which IFCI and E&Y had qualified. The financial bids were opened today. Only IFCI qualified here, while the E&Y bid was found lacking on some parameters set by the state government, official sources told Business Standard.
Since IFCI was the lone firm to qualify, the government has extended the last date for submission of RFQ-cum-RFP to September 1. This is the second time the government has extended this date.
Earlier, the deadline for bids was fixed as August 8. However, only two companies had submitted their bids. So, the government extended the last date to August 18.
The government wants to transfer the assets and liabilities of 25 of the 28 cooperative sugar mills. The state is the majority stake-holder in all 25 units. The fate of the three remaining mills depend on court cases. Most of these low-capacity cooperative mills are located in the rural areas and are running in losses. However, they command better cane area than corporation mills.
The UP government is taking steps for the total privatisation of the beleaguered sugar sector to usher in operational efficiency, reduce Non Performing Assets (NPAs) and mitigate non-productive overheads running into several crores of rupees annually.
