14 sick spinning mills in UP on a privatisation mode

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Lucknow, July 22 (UNI) Even as Uttar Pradesh government is grappling to find good buyers for its sick sugar mills, it has now decided to put sick state-owned spinning mills under the hammer.

The state law department has given its green signal for privatisation of these mills. The proposal has been sent to the Department of Finance and then will be sent to the Cabinet for its final approval, official sources said here today.

There are 14 state-owned spinning mills in the state and ironically, all of them are in red.

''The issue was pending with the Board for Industrial Financial Restructuring (BIFR) for many years. Once the BIFR gave permission to privatise the mills, the government has decided to put these sick spinning mills under the hammer,'' the official said.

The BIFR has asked the state government to either sell these sick mills to private entrepreneurs or give them on lease to business houses. The BIFR is categorical in its order that it will be the prerogative of the state government to either go for privatisation or give these mills on lease.

The mills that will be up for sale included the Spinning mills of Jhansi, Banda, Sandila, Sitapur, Meerut, Ballia, Meja, Tanda, Akbarpur and Baheri(Bareilly).

All these mills were proving to be a financial drain on state exchequer and steps taken to revive these mills by pumping money were proving to be ineffective in last couple of years. Former Chief Minister Mulayam Singh Yadav had also decided to take the matter to BIFR with a clause to lease out these mills to private business houses.

After Mayawati came to power she seconded Mulayam's decision but instead of giving these mills on lease decided to go for privatisation.

Once Chief Minister made her decision clear the government moved a petition in the BIFR adding the clause of privatisation.

Government, that has burnt its fingers while finding buyers for sugar mills, has now decided to showcase the landed property of these spinning mills as a carrot for private investors. The government might also agree to go for change in land use allowing the private entrepreneurs to use the land for real estate purposes.

As per an estimate the landed property of spinning mills of Banda and Meja is around Rs 35 crore each. Evaluation of property of other mills is on, the official said.

UNI MB SB AK ND1246

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