The Hindu Business Line : UP puts all State, co-op sugar mills on the block

New Delhi, July 6 The Uttar Pradesh (UP) Government under Ms Mayawati is yet to unveil its promised new sugar industry promotion policy after having scrapped the earlier one framed by Mr Mulayam Singh Yadav’s administration.

But in announcing wholesale privatisation of all State-owned mills, including those in the co-operative sector, she has gone one step ahead of her predecessor.

Ms Mayawati’s Government has invited expression of interest for appointing an advisor for its proposed privatisation or sale all the 33 mills and four distilleries under UP State Sugar Corporation Ltd (UPSSL) and its subsidiaries. In addition, 28 mills and three distilleries belonging to the UP Cooperative Sugar Factories Federation (UPCSFF) have been put on the block.

Prospective advisors to the privatisation programme have been given time till July 18 to submit their bids. “We have targeted end-September for legal transfer of the assets of the mills, to coincide with the new 2007-08 crushing season,” said a State Government official.

The present Government’s privatisation plan is far more radical than that of Mr Yadav’s. The latter only sought to privatise the UPSSL-owned mills, while leaving out co-operatives. Further, mills were not to be sold outright, but given on a 30-year long lease, at the end of which the management would revert to the Government.

Besides, the lessee was not allowed to undertake any workforce rationalisation, besides being obliged to pay the cane price ‘advised’ by the State Government.

The 33 mills under UPSSL being offered for sale include 11 working factories that till around 2005-06 were running profits before interest and tax and have a current net worth of Rs 475.44 crore. Of the remaining, 11 are lying closed and the remaining 11 just about crushing. As regards the co-operatives, there are five mills that are chronically loss-making, while the other 23 have made profits in at least one out of the last three fiscals.

In the previous privatisation experiment, the various restrictive clauses had led to lukewarm investor response. Moreover, there was ‘cherry-picking’, as sugar barons mostly bid for the 11 working mills. “This time, there will be no-holds-barred privatisation covering even co-operative mills. We are also open to relocation of manpower, where necessary,” the official added.

The 61 factories put together produced about 13 lakh tonnes of sugar out of UP’s total 85 lt during the 2006-07 season and less than the 15 lt of Bajaj Hindusthan Ltd’s 12 mills. They have a combined workforce of 18,000 (excluding seasonal manpower) and a negative net worth of Rs 2,000 crore.

More Stories on : Sugar | Agricultural Policy | Disinvestment

Article E-Mail :: Comment :: Syndication :: Printer Friendly Page

Stories in this Section
Commerce Ministry plans to take over basmati certification

20% excess rainfall till July 4

ARPU levels for cell firms close to ‘unviability’ mark

Kharif sowing in full swing; bumper crop likely

Primary articles drive up inflation rate marginally

Have interest rates peaked in India?

Moody’s marks down Tata Steel

UP puts all State, co-op sugar mills on the block

A heady cocktail of views about tax getting lighter on liquor

Wipro buys Unza for $246 m

IT firms warming up to get into the green act

GoM decides against cap on iron ore exports

Sensex hits 15,000; fund inflows, monsoon boost sentiment

Profit booking weakens logistics stocks

Satyam plans ‘virtualising’ HR functions