Bihar govt to resume sale of closed sugar mills

Only 4 of the 8 sugar mills of Bihar State Sugar Development Corporation would be on the block

Bihar government has decided to resume the sale of its closed sugar mills. However, this time only 4 of the 8 sugar mills of the Bihar State Sugar Development Corporation would be on the block and the rest of them would be handed over to the Bihar Industrial Area Development Authority (BIADA) for industrial purposes.

The state government is planning to offer its Warsiliganj, Banmankhi, Hatwa and Lohat sugar mills to private investors on long term lease. "We are planning to resume the bidding process for leasing out our sugar mills from the next month," Sudheer Kumar, Sugarcane Secretary told Business Standard, "We are hopeful that the process would be complete by the end of the calendar year. In this round we will be offering only 4 mills as the rest of them are too small to generate any interest."

State government has also roped in SBI Caps as financial consultant to facilitate the bidding process. "SBI Caps is evaluating these mills and if necessary would revise the earlier set floor price. The floor prices would be finalised by the next month," told Kumar.

Meanwhile, the state government has decided to hand over New Sawan, Siwan, Garaul and Guraru sugar mills to BIADA. "These mills have not been found viable. In last 5 years, we have tried very hard to give them to private investors, but no proposal was received for their revival. They are too small for being used for sugar production. Therefore, we have decided to hand them over to BIADA for purposes other than sugar production."

The BIADA is planning to develop industrial parks on the land of these sugar mills.  

The state government began leasing its closed mills to private companies since 2008. So far, the government has been able to lease out its 7 of its 15 closed sugar mills to different companies. Sugauli and Lauria Mills were bought by HPCL in the first phase of the bidding in 2009.

Meanwhile, Patna based Tirhut Industries bought Rayyam and Sakri in the second phase, which concluded in 2010. The biggest sugar mill of the state, Motipur Sugar Mill was leased to Indian Potash Ltd. (a PSU, in which IFFCO holds majority stakes) in 2011, while NOIDA based Pristine Logistics got the Bihta Sugar Mill.

Last year, Kolkata based Winsome International Ltd. bought Samastipur sugar mill in the fourth round of bidding.