Punjab News State to lease 5 closed sugar mills


Prime VIP
Ludhiana, June 20

The Punjab Government has decided to lease five closed sugar mills of the cooperative sector to private parties on BOOT (build, own, operate and transfer) basis. It has also decided to lease three distilleries lying closed to private bidders on BOOT basis.

The decision has been taken on recommendations of a consultant engaged by the state to suggest ways to revive closed cooperative sugar mills. The consultant observed that the sixth cooperative sugar mill located at Budhlada could not be revived and hence it should be closed forever.

The five mills are Faridkot sugar mill; Tarn Tarn Sugar mill; Jagraon sugar mill; Zeera sugar mill and Patiala sugar mill. The total assets of the closed mills are worth Rs 287.20 crore with liabilities to the tune of Rs 234.66 crore. In case, the government tries to sell off mills and distilleries, it is likely to make a paltry sum of Rs 52.24 crore.

In view of this, the consultant has suggested the leasing of mills on BOOT basis for a period of 20 years of which five years moratorium will be given. For the first five years, parties will pay a token money of Rs 1 per quintal and for the next three years, they will pay 2 per cent of the crushed sugarcane.

In case of three distilleries located at Nakodar, Gurdaspur and Nawanshahr, the lease period will be for 10 years and moratorium of two years.

It is learnt that nine cooperative sugar mills, which are operational in the state, had the worst sugarcane-crushing season during 2009-10, as the area under sugarcane in these mills was 20,000 hectares. The daily crushing capacity of the cooperative sugar mills is 15,000 tonnes while there are seven sugar mills in the private sector with a daily crushing capacity of 36,000 tonnes.

According to KDS Bhullar, MD, Sugarfed, the Punjab Cabinet has extended the lease period under BOOT to 30 years against 20 years.