The Telegraph
Since 1st March, 1999
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Allies bitter after sugar mill lease

Lucknow, Oct. 22: Uttar Pradesh chief minister Mulayam Singh Yadav’s move to privatise state-run sugar mills has evoked protests from his allies, particularly the Congress and the Left.

In a strong reaction to the state cabinet’s decision last night to lease out its 24 sugar mills to private parties for 30 years, the allies said it was “betrayal of the interests of the workers and farmers”.

While the Left, led by the CPM, described it as “a sell-off”, state Congress leaders felt that Mulayam Singh should have taken his allies into confidence before taking such a major policy decision.

“The move has caught us on the wrong foot and the Congress cannot overlook the interests of the mill workers, as well as sugar farmers, who would suffer as a result of it,” Uttar Pradesh Congress Committee president Jagdambika Pal said.

CPM state secretary Deenanath Singh said: “Mulayam’s policy about Uttar Pradesh sugar mills is only a modified version of what Mayavati had planned.”

In a resolution, the state council of the Communist Party of India demanded withdrawal of the decision. “If this is not done, we will launch a state-wide agitation,” CPI state secretary Ashok Misra said.

The Samajwadi Party — the dominant partner of the ruling coalition — justified the decision and dismissed the criticism as “misinformed”. “These mills were giving an annual loss of over Rs 900 crore. Giving them to private parties on lease was the only way to revive these sick units,” the party’s state chief, Ram Sharan Das, said.

Briefing the media about the ramifications of the move, Uttar Pradesh chief secretary A.P. Singh pointed out that the 24 state-owned sugar mills had already cost the state exchequer Rs 1,600 crore.

“While five of these mills set up at Bara Banki, Bareilly, Chitauni, Ghughli and Maholi are closed, 11 of them are incurring huge losses,” he said.

The chief secretary claimed that the cabinet had designed a foolproof system to make the privatisation process transparent. “All the conditions would be mentioned in the tender and the party which offers the highest bid would be invited. There would be no negotiations once a bid has been tendered,” he added.

The government would waive off its loan amounting to Rs 960 crore on them but the units would have to pay the dues of the employees and retain them in their job as per the conditions of the tender.

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