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‘Revive or privatise’: Punjab co-op sugar mills’ fate not so sweet

Cooperation dept urges state govt to set up cabinet sub-committee to study viability of these mills.

punjab Updated: Aug 18, 2017 09:20 IST
Gurpreet Singh Nibber
Gurpreet Singh Nibber
Hindustan Times, Chandigarh
Amarinder Singh,Punjab sugar mills,privatise
The sugar mill at Bhogpur in Jalandhar district is one of nine operational in Punjab.(HT Photo)

The Punjab cooperation department has sent a proposal to the state government to set up a cabinet sub-committee to study viability of sugar mills in the cooperative sector.

The proposal comes a month after a meeting chaired by Punjab chief minister Capt Amarinder Singh, in which top officers raised concern over the financial health of these mills, and even suggested privatisation of some unviable mills.

NOT A SUGARY DEAL
  • Rs 1,016 crore support given by the state government to nine operational mills in six years from 2012 to 2017
  • Expansion not happening of Bhogpur sugar mills, the oldest in Punjab (set up in mid-50s); a proposal cleared by state cabinet in 2014 still at the beginning stage
  • Four mills under liquiditation in Faridkot, Tarn Taran, Patiala and Zira, which were closed long ago
  • Three distilleries non-functional with the Gurdaspur, Nakodar and Nawanshahr mills
  • Co-gen plant non-functional: A co-generation plant that was built along with the Nakodar plant to generate power could never function

There are nine operational sugar mills (in Ajnala, Batala, Bhogpur, Budhewal, Fazilka, Gurdaspur, Morinda, Nakodar, and Nawanshahr) in the state and three distilleries (attached with the Gurdaspur, Nakodar and Nawanshahr mills).

Four mills (in Faridkot, Tarn Taran, Patiala and Zira), which were closed long ago, are under liquidation process. The distilleries attached with these mills have not been functional since 2000.

“An effort was made by us to revive non-functional distilleries. Tenders were invited, but there was no response,” said Sugarfed managing director Arun Sekhri. “The government is serious for revival of sugar mills. We are hopeful of early results,” he added.

However, he refused to comment on the proposal for privatising some of the mills in the cooperative sector.

Sugarfed is the state agency that monitors functioning of sugar mills in the state.

‘MILLS MUST FUNCTION FOR DIVERSIFICATION’

“If we want diversification to happen in Punjab, the mills must function,” said Bharatiya Kisan Union (Mann) president Bhupinder Singh Mann.

“We are demanding that the crushing capacity of Batala and Gurdaspur sugar mills be increased, to support the cane growers of the areas,” he said.

Mann said that for revival of sugar mills, Sugarfed just needs to check pilferage and there’s no need for handing over these to the private sector.

LOW CRUSHING CAPACITY

The nine functional sugar mills in the state have a total crushing capacity of 15,800 tonnes. However, as compared to the sugar mills in Uttar Pradesh, Punjab mills have very low capacity.

“In UP, each mill has a crushing capacity of 20,000 to 25,000 tonnes. The low capacity of our mills makes them unviable, so much so that they are unable to even pay cane cost to the farmers on time,” said an official in Sugarfed. In the meeting mentioned above, the CM had suggested increasing the crushing capacity of the mills.

Since 2011-12, the state government has been funding a substantial portion of the payment to cane growers to be made by these mills. In six years, the government has given Rs 1,015 crore out of the total payment of Rs 2,858 crore made to the farmers.

The sugar recovery in these mills is much below the standard norms of 8% to 10%, whereas private mills give an output of 12%.

According to figures released by the cooperation department, 28,566 farmers are attached to the nine cooperative sugar mills, which struggle to make payments released on time.

First Published: Aug 18, 2017 09:18 IST