UP plans to privatise sick sugar mills

Lucknow, Sep 9: Uttar Pradesh government has yet to attract any viable company to bid for the 33 ailing sugar mills of the UP state Sugar Corporation Ltd even after floating the global tenders for the second time in last six months.

The State Government had decided to privatise the ailing sugar mills and invited tenders for the same.

According to sources, one only company-- Messers Gammon India Ltd -- had furnished its financial bid on the last day yesterday though five companies had submitted the proposals for Request For Qualification (RFQ).

This time also, the bid was likely to be scrapped as bidding by at least three companies was required under the norms.

The Government was forced to rethink its strategy after private entrepreneurs showed little or almost no interest in government move to sell its sick sugar mills.

The last tender was cancelled on May 23 last, after only two sugar mill conglomerate showed interest in government mills.

A new process was initiated with changed clause and five companies namely Gammon India Ltd, Chaddha Sugar, Essar Oil, Bajaj Hindustan Ltd and Dalmia Sugar Limited have thrown their hats in the ring.

These companies have also deposited Rs 50,000 as 'Earnest Money'.

Officials of these companies have been taken around the proposed sick mills. Only those companies that have a minimum worth of Rs 600 crore with a turnover of Rs 500 crore and positive cash profit for at least three of the last five financial year were eligible for the bidding.

The accumulated loss of the sugar mills of the corporation was about Rs 2,000 crore. The Mayawati government had provided a budgetary grant of Rs 200 crore to the Sugar Corporation but it was not enough.

The previous Mulayam Singh Yadav government had decided to privatise 24 sugar mills of the UP Sugar Corporation. The move was mired in controversy as all the mills were proposed to be handed over to a particular company, which has now emerged as the largest sugar producer of the country.

UNI