UP govt paves way to sell off sick sugar mills

Lucknow, Aug 4 (UNI) Uttar Pradesh has amended the State Cooperative Societies Act, 1965 which would pave way for selling off 28 sick sugar mills of the cooperatives in the state.

The Cabinet meeting held yesterday has approved the ordinance to be issued to amend the Act. The amendment allows registrar cooperative societies to permit the government to sell off and private investment in these sugar mills without the approval from the societies.

According to an official release, the new amendment will be applicable on those sugar mills of the society where the share of the government is more than 50 per cent.

However, the government is yet to finalise the name of the consultant who will be the advisor of the entire disinvestment process of the total 61 sugar mills of the corporation and cooperative sector.

Earlier' the Mayawati government in UP had decided to sell off as many as 61 loss making units of the UP Sugar Corporation and the UP Co-operative sugar Factories Federation.

This includes 28 mills of the cooperative sector and rest of the corporation. Seven distilleries with the cooperative sector sugar mills will also be privatised. At present' all cooperative sector sugar mills were operational while most of the mills under the corporation with worn out and obsolete plants were lying closed.

The previous Mulayam Singh Yadav government in 2003 had decided to privatise 24 sugar mills of the UP sugar Corporation but 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.

The Official sources said the sick sugar mills were a drain on the state exchequer. The annual burden on the government on the PSU and cooperative mills is close to Rs 1,500 crore. For the last two decades, the government every year issues bank guarantees to both the Sugar Corporation and Cooperative Federation clearing the arrears of the sugarcane growers.

The BSP government; to prevent controversy and aspersions on its integrity, has formulated a comprehensive policy framework for smooth and flawless conduct of the privatisation process. The policy for disinvestment of the assets of the PSUs and other government owned properties and building infrastructure through public-private partnership (PPP) route was recently approved by the Cabinet.

State Industrial Development commissioner (IDC) Atul Kumar Gupta said the aim of the policy is to gradually phase out the budgetary allocation to the sick PSU like the loss making sugar mills and later disinvestment or privatisation of those units.

The policy also aims to attract private investment in the infrastructure sector by making the investment through PPP route more transparent unlike in the previous regime when all decisions on investment were a closely guarded affair.

UNI