Mulayam’s sugar drive: Open dead mills, lose Rs 35 cr

Within 23 days, all the mills had to be shut down again. It might have gone down as just another minor, failed experiment until the bills came in. In just over three weeks, the state had lost Rs 35 crore.

As far back as 1998, the Board for Industrial and Financial Reconstruction (BIFR) had declared these mills “unviable” and directed the state government to sell them off. In fact, so heavy were the losses in the past that in April 2003, the government itself took a decision not to re-start them. Then why the change of heart?

The chief minister visited Deoria in January this year and, apparently, he was told that the closure of the mills was becoming a political issue. Shortly after that he ordered the reopening of the mills. The decision backfired spectacularly. The mill in Deoria, for example, was in such a bad state even after 8,000 quintals of sugarcane was crushed there over seven days, it failed to yield a single crystal of sugar. It lost Rs 5.79 crore. The Budhwal mill ran for 11 days and chalked up a loss of Rs 3.91 crore.

The longest survivor was the mill at Lakshmiganj that lasted for 23 days and managed to churn out some sugar — but only at a loss of nearly Rs 20 lakh a day. In all, it lost Rs 3.79 crore.

Mulayam, who is also the minister in charge of sugar, refused to comment.

The loss should come as no surprise. All over India, the crushing of cane begins in November. To be ready for this, the mills start repairing their machinery by June. These eight mills had not even bothered to get their machinery fixed since they were never meant to reopen in the first place.

UP’s Sugarcane Secretary Mazid Ali told The Sunday Express: “The government decided to open the mills in February.” He said that last year, cane was available as late as July. “It appears we had a bad crop this year.”

The managing director of the UP State Sugar Corporation, Hardeo Singh, said that the government had felt that the mills could be operated but did not factor in the decline in cane stocks.