Amid the rhetoric of crop diversification, the Punjab government has decided to sell three sugar mills and hand over another three to private players for operations due to shortage of funds to run these cooperative mills. The land of three sugar mills   Jagraon (64 acres), Budhlada (124 acres) and Faridkot (nearly 100 acres) – is being handed over to the Punjab Urban Planning and Development Authority (PUDA) for further sale in an effort to replenish coffers. This land is said to have a market value of at least Rs. 300 crore.

The mills at Patiala, Zira and Tarn Taran would be handed over to private players on the build-operate-transfer (BOT) basis.

A plan in this regard has been chalked out, under which the possession of Jagroan and Budhlada mills has already been handed over to PUDA. The state government will clear Rs. 44-crore liabilities of these mills towards farmers, employees and traders.

Punjab has 15 cooperative sugar mills. All are running into losses. These mills had last earned profit in the 2002-03 financial year. Subsequently, they have failed to compete with private sugar mills, which take the best quality sugarcane. Moreover, Punjab is not producing enough sugarcane to feed all mills. At present, all cooperative mills are running at 50% of their installed crushing capacity.

The machinery of the three mills being handed over to PUDA would be auctioned. The money will go to the state government.

Commenting on the matter, chief minister Parkash Singh Badal said, “Initially, the government will sell three closed sugar mills. The Patiala, Zira and Tarn Taran sugar mills would be made operational by handing these over to private parties on the BOT basis for the next 30 years.”
Justifying the move, he said, “It’s the need of the hour as cooperative sugar mills are running into losses. We will make optimum use of the land.”