UP sugar mills' privatisation: Bidding deferred to mid-Sept

Apparent disinterest among buyers has forced the Uttar Pradesh government to defer the financial bidding for 24 federation sugar mills to mid-September.

Besides, the date for filing the financial bids for 11 Sugar Corporation units has also been extended from August 31 to September 7.

Official sources told Business Standard that the interested parties would be told about the ‘expected’ price of these units by next week.

Since, there is marked disparity between the prevailing circle and market rates of land occupied by these units depending upon location, the expected price would be higher than the reserved price.

The government is following the Swiss Challenge Method (SCM) for the bidding process to secure higher price for the units on block. Last year, the state government had made a failed bid to sell them.

An industry spokesperson underlined that the state needed to offer more sops to encourage the companies to bid for these units.

At present, a total of 35 sugar corporation and federation units have been put on block. As sweetener, the government is offering industrial alcohol license and assurance of continuation of existing cane area to individual units. Of the 24 cooperative units for sale, so far, bids had been received for only 16 units. Some companies had also filed bids for multiple units.

Top companies, including Bajaj Hindusthan, Indian Potash, Wave Industries, Lakshmi Sugar, Dalmia Sugar, Patel Engineering, SBEC Bioenergy, Tikaula Sugar Mills, Dwarkesh Sugar Industries, Balrampur Sugar, Triveni Engineering, Rama and Oswal Groups are in fray.

For the rest of the eight federation mills, the last date for submitting the technical bids is August 31.

For the 11 corporation units, 10 companies, including Triveni Engineering, DCM Shriram, Indian Potash, SBEC Bioenergy, Patel Engineering, Tikaula Sugar Mills, Wave Industries, Dwarkesh Sugar Industries, Laxmipathi Balaji Sugar and PBS Foods had filed technical bids.

Since, all the 11 corporation mills are in working condition, the government wants the private party to enhance the mill capacity and run it as a composite unit, including production of sugar and ethanol and power generation.

In the first phase, UP has put 24 cooperative (out of total 28) and 11 UP Sugar Corporation mills (out of total 33) for sale.