As many as half of the sugar mills of the UP Sugar Co-operative Federation, which had been put on the block, failed to get bidders even after an extension of the last date.
Of the 24 mills for which expressions of interest (EoI) had been invited, only 13 have managed to get proposals from the bidders.
While nine got bidders in the first go itself, bids were placed for 4 mills on Tuesday. However, the remaining 11 mills either did not get any bids or received less than three bids which is necessary to make the process competitive. As a consequence, the Uttar Pradesh government has been forced to extend the deadline for the remaining mills of the Sugar Federation to August 10.
Interestingly, most of the bidders, who have shown a keen interest in buying the beleaguered sugar mills, have been trying to impress upon the government to reveal the reserve price of the mills so that it is easier for them to place the financial bids.
According to sources in the sugarcane department, since the government is hell bent on washing its hands off these mills, the proposal of the bidders to reveal the reserve price is being given a serious thought and a decision on this is likely to be expected soon. The financial bids for the cooperative sugar mills are to be opened on August 21.
?The private companies, which had come to attend the pre-bid conference in Delhi early this month, had asked senior officials of the Uttar Pradesh government to reveal the reserve price, and a decision on this is likely to be taken at the highest level,? said an official, requesting anonymity.
In fact, the desperation of the state government over this issue is apparent, especially when viewed in the context that its effort to sell off the mills has not succeeded since the last two years. And every year that it is unable to hand over the old and loss-making state sugar sector to the private sector: 33 mills of the Sugar Corporation and 25 mills of the Cooperative Federation, the state government is forced to run them at an astronomical cost of Rs 900 crores, which is bleeding the state exchequer.
Indeed, to answer the queries and to quell the fears of the private companies which have shown interest in buying these mills, the state government has called a second pre-bid conference, this time in the state capital Lucknow. The state government will also encourage interested buyers to physically inspect the mills.
According to sources, many companies have placed multiple bids for more than one mill and some have placed bids for both the Corporation and Federation mills. Some of the important companies that have placed bids for the cooperative mills include Indian Potash, Triveni Engineering, Balrampur Sugar, Dwarikesh Sugar, Patel Engineering, Bajaj Hindustan, Dalmia Sugar, Sakseria group, Wave Industries, Lakshmipathy Balaji Sugar and Distilleries, DCM Shriram, PBS Food, Ticola Sugars and SBEC Bio Energy, etc.