In a major development indicative of expanding private investment purse, the Yogi Adityanath government has opened the lucrative sugar sector in Uttar Pradesh for private sector bidding.
Sugar generates annual economy of about Rs 35,000 cror in UP and supports 4 million rural households. This year, the state government is targetting sugar output of 11 million tonnes (MT), of which about 9 MT has already been produced.
The state cabinet has cleared the proposal for private investments to revive defunct Majhola cooperative sugar mill in Pilibhit. Since, there are several other government-controlled mills lying closed, this experiment is expected to be replicated in other districts in near future.
The Majhola unit spanning 40 hectares has been lying closed since 2010-11. The private investor would be selected after competitive bidding under public private partnership (PPP) model to develop an integrated sugar complex comprising mill, power cogeneration and distillery units.
It is estimated the private partner would pump in Rs 260 crore after taking the mill on a 30 year differential lease rent agreement. The company would set up a mill with at least 2500 tonnes cane crushed per day (TCD), 10 megawatt (mw) of cogeneration and 30 kilolitre of distillery in three years after signing the contract.
Of the total 119 operational sugar mills, the private sector accounts for the bulk of 94 units, followed by 24 government-controlled cooperative mills, apart from a UP State Sugar Corporation Limited (UPSSCL) unit.
Talking to the media here recently, UP health minister and government spokesperson Sidharth Nath Singh said under prevailing circumstances developing integrated sugar complex was a better option to overwhelm the cyclical nature of sugar industry, while the state would also not lose control over the asset.
Earlier, the Yogi government had announced to infuse Rs 715 crore out of its own budget to revive two defunct UPPSSCL mills at Pipraich and Munderwa in Gorakhpur and Basti districts respectively.