Bhubaneswar, March 9: The cabinet sub-committee on disinvestments today approved the asset sale of Gopinath Weavers’ Spinning Co-operative Mill located at Baliapal in Balasore district. The meeting was chaired by chief minister Naveen Patnaik.

Industries minister Raghunath Mohanty said: “The cabinet committee on disinvestment had on August 11, 2009 accepted the offer of Ruhatiya Spinner Private Limited to buy the co-operative mill and decided to sell its assets for Rs 2.51 crore.”

Earlier, two bidders had evinced interest in the co-operative which was set up at Baliapal in Balasore district in the 1990s to provide employment to people displaced by the national test range scheme of the state government. The mill, which started production in July 1991, was the only one in the state running on conversion technology and was employing more than 500 workers. It catered to the needs of handloom weavers by providing hank yarn.

Sources said that though initially its assets were valued at Rs 2.51 crore, company officials later insisted that it be reduced to Rs 2.44 crore as the mill had been damaged in a fire. The government, however, stuck to its guns and finally decided to sell the mill at Rs 2.51 crore.

A decision on waiving the loan interest of Nayagarh Cooperative Industries Limited was deferred. Sources said it was discussed in a separate meeting later.

In 2004, the mill had been divested in favour of ECP Industries Limited. On January 7 this year, the Public and Cooperative Enterprises Restructuring Committee (PCERC) approved the proposal for waiver of penal interest charged on Nayagarh Sugar Complex Limited due to default in payment of instalments. The dispute pertaining to the mill is over the payment of interest to the tune of Rs 8 lakh. “We have decided to take up the case in another meeting,” Mohanty said.

As a number of state public sector industries did not fare well, the government had gone ahead with the disinvestments of a number of industries. Among them, Hirakud Industrial Works and Idcol Rolling Mill were placed for consideration before the committee for disinvestments. Sources said, however, that the government expected a much better response and deal from private entrepreneurs.