Lukewarm response to first bid: MSC Bank to issue fresh tenders for 10 sugar mills

Other than the Jai ShivShankar Cooperative Mill in Nanded, none of the other mills found response. The lean sugar season, many had pointed out, was one of the reasons for the lukewarm response. The 2017-18 sugar season is expected to be a decent one which might see more private players involved in the field. The mill which was sold in Nanded was also purchased by a private player.

Sale of cooperative mills to private players had created a major controversy in the state with many opposing the same. In 2013 the state cabinet had decreed that cooperative mills will not be sold to private mills. However, many had pointed out that it could not be implemented.

Cooperative mills, many said, were weak financially and very few will be able to make investments in these mills. In case of a sick or closed unit, the new party has to invest substantially in terms of machinery and modernisation.

Meanwhile, Karnad while talking about the payment of pledge loans by mills said the unpaid pledge loan owned by the mills to the bank at present stood at Rs 1,700 crore. “At the end of the 2015-16 crushing season the amount was around Rs 2,100 crore,” he said. A pledge loan is the money raised by the banks from the MSC Bank by pledging their sugar stock. Once the sugar stock is sold, mills repay the money to the bank. This money is used by mills to pay the farmers. The MSC Bank gives pledge loans to 32 sugar mills in the state.