Bitter coat on sweet success

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  • Published 28.07.10

Patna, July 27: The NDA government’s attempts to revive sick sugar mills in the state have met with limited success.

Repeated attempts to privatise 15 of its sick sugar mills notwithstanding, the state government has failed to woo private players.

In the last four-and-a-half years, the government floated tenders thrice to invite bids for its ailing sugar mills but only four of them have so far been handed over to successful bidders, HPCL and Tirhut Industries.

The two sugar factories, Sugauli in East Champaran and Lauria in West Champaran, for which the HPCL signed an MoU with the state government in January, 2009 is expected to start operations by end of this year.

HPCL has invested Rs 300 crore in both these units that would have 3,500 tonnes crush per day benefiting 40,000 farmers in the area.

The third successful bidder, Reliance Industries, bagged the cheapest contract for Motipur sugar factory in Muzaffarpur at Rs 57 crore, marginally higher than the floor price of Rs 55.36 crore.

However, the company backtracked despite repeated reminders by the state government asking it to start reviving the sick unit. Reliance had also deposited Rs 5.7 crore of the bidding price.

The other two sick units, Yam sugarmill in Darbhanga and Sakri sugarmill in Madhubani, earlier owned by Bihar State Sugar Corporation, have been handed over to a Delhi-based firm M/s Tirhut Industries at a lease amount of Rs 9.11 crore and Rs 18.25 crore respectively for a period of 60 years, to be extended by another 30 years later, official sources said.

Tirhut Industries, which signed an MoU with the state government in April last year, would invest another Rs 300 crore to set up a big sugar mill at Ryam.

The crushing capacity at Ryam would be raised to a minimum of 2,500 tonnes crush per day from the present 1,000 tonnes crush per day, sources told The Telegraph.

They added that apart from the sugar factory, a distillery unit, an ethanol plant and power generation (through a tie-up) unit would be set up in the area.

The government has once again started the process of a third bidding for the remaining 11 sick units. SBI Caps has made an evaluation and fixed the floor price.

Sources said the bidding process would be completed end-August and the government would start issuing Letters of Intent to the successful bidders.

Prospective bidders have submitted 53 applications for 11 ailing units, but this time around not a single big corporate house features in the list, sources said.