Uttarakhand to close down Gadarpur sugar mill

In a major policy decision, the Uttarakhand government on Tuesday decided to close down the Gadarpur sugar mill, which came with a parallel decision of reviving five other loss-making sugar mills under the public-private partnership (PPP) model.

The stagte Cabinet has also decided that all 600 workers of Gadarpur sugar mill — a cooperative unit under heavy losses — would be given an option of joining any of the other five government-controlled sugar mills. The government will also bring a separate ‘golden handshake policy’ for these workers, said Alok Jian, chief secretary, Uttarakhand.

The Gadarpur sugar mill is being closed down due to difficulty in procuring cane and the government’s inability to revive it. “This is because most of the cane area of Gadarpur sugar mill had gone to Uttar Pradesh after Uttarakhand was carved out in the year 2000,” added Jain.

Jain said the 150 acres of land belonging to Gadarpur sugar mill, which is located in the Kumaon region, would be purchased by the State Infrastructure and Industrial Development Corporation of Uttarakhand Ltd (Sidcul), which would explore options of developing an industrial estate or any other venture there.

The government has also decided to run four sugar mills under its control – Doiwala, Nadehi, Sitarganj and Kitchha — through the PPP route. According to the chief secretary, these sugar mills would be given on lease for a period of 25 years for which bidding process will be initiated soon.

However, the Baajpur sugar mill, where losses are not heavy, cooperative sector, will continue to run as a cooperative unit.

The Cabinet decision came after Chief Minister Vijay Bahuguna, during his last review meeting of the sugarcane department on August 2, decided to abolish the 2 per cent VAT on sugar and waive off an accumulated loan of Rs 498.88 crore of all the 6 sugar mills in an effort to remove their sickness.

Since the August 2 meeting, the government was weighing its options on whether to privatize these mills or allow them to be run on PPP mode. “It was a very difficult decision but the PPP model was the best option to modernise and revive these sugar mills,” said a senior government official.

In a separate decision, the government brought a new PPP policy with focus on developing infrastructure and other big projects in the hill state. Under the policy, the government has set up an empowered group of ministers headed by the chief minister to clear projects in the range of Rs 5 crore to Rs 250 crore. The projects which are above Rs 250 crore would be cleared only by the Cabinet, said the chief secretary.

BS