Following stiff opposition over running sugar mills on the public-private-partnership (PPP) model, the Uttarakhand government is in a fix over deciding the fate of five ailing government-controlled sugar mills, for which an investment of over Rs 180 crore-200 crore is required for a modernisation process.
The government last month rolled back its decision to shut the Gadarpur sugar mill and run four other sugar mills on the PPP model.
In its September 4 decision, the government had decided to conduct a fresh study of all the ailing sugar mills in the state through a central government agency.
The rollback is being seen as a setback for the modernisation of sugar mills because the government had taken the PPP decision in the light of a study conducted by the National Federation of Cooperative Sugar Factories.
“We have to invite fresh bids for conducting such a study,” said S S Rawat, secretary, sugarcane.
But Rawat remained sceptical regarding the issue of spending Rs 180 crore-200 crore on the modernisation process.
“We have to find ways to modernise these sugar mills,” said Rawat.
The decision to close the Gadarpur sugar mill and adopted PPP model for reviving four other loss-making sugar mills in government and cooperative sectors was opposed tooth and nail by the Bharatiya Janata Party (BJP). “Not only the BJP, but also some Congress leaders including Finance Minister Indira Hridayesh also opposed the decision,” said a top government official.
BJP had expressed its resentment against the move alleging that the government was in hand-in-glove with some businessmen to sell the sugar mills. “By opposing the PPP decision, BJP and some Congress leaders have done a great harm to our sugar mills. We are now back to square one,” said the official.
However, Rawat said the government would pay all the remaining dues of farmers, which amounts to about Rs 96 crore, before the commencement of the crushing season. A proposal in this regard has been sent to the finance department for approval.
Significantly, Chief Minister Vijay Bahuguna, during his last review meeting of the sugarcane department on August 2, had decided to abolish 2 per cent VAT on sugar and waive off an accumulated loan of Rs 498.88 crore of the state’s six sugar mills in an effort revive them. “This particular decision on converting the loan into equity still stands,” said Rawat.
