Privatisation of UP sugar mills hangs as only 2 submits tender

Lucknow, June 13 (UNI) In a major setback to the Uttar Pradesh government to privatise the ailing 31 sugar mills of the state sugar corporation, only two bidders -- Hindusthan Bajaj and Dalmia Cement -- have submitted their tenders on the last day today.

The privatisation of the sugar mills, which was to be completed by September 2007, has now been delayed by a year and it still hangs in balance with no chance to complete the process before the next crushing season starting from October next.

Official sources here said that there was no adequate response for the process and it has not served any purpose to the government.

'' No purpose has been served as only two companies have bidded for the sugarmills,'' sources said adding that minimum of three bidders were required as per the law.

Sources said the tenders would not be opened as it would be against the law.

On May 23, UP government had invited Expression of Interest/ Request for Qualification for Strategic Sale of Entire Equity of government in UP State Sugar Corporation Limited. While six tender forms were sold but only two submitted their forms.

The two companies, Hindusthan Bajaj and Dalmia cement, have also deposited Rs 50,000 each as earnest non-refundable money.

UP government had fixed terms and condition for the elegibility of the companies bidding for the 31 sugar mills. Companies, whose minimum net worth was Rs 600 crore, minimum turnover was Rs 500 crore and positive cash profit for at least three of the last five financial year would be elegible for the bidding.

The accumulated loss of the sugar mills of the corporation was around Rs 2000 crore. In 2007-08 , the state government had provided a budgetary grant of Rs 200 crore to the sugar corporation, while the cane famers still owe Rs 246 crore to the mill.

The Mayawati government last year had decided to privatise as many as 61 loss making units of the UP Sugar Corporation and the UP Co-operative Sugar Factories Federation by the end of September 30 next.

This includes 28 mills of cooperative sector and rest of the corporation. Seven distilleries with the cooperative sector sugar mills will also be privatized. 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. 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 MB JAS MP AS1909