Comodity
- 1. Congress (I) has been highlight the scams of Mayawati government as a result of which Uttar Pradesh has suffered losses in thousands of crores in each case. Mayawati has no vision, no agenda for development of the state. Instead of creating assets for the state she has been selling the existing assets to private parties at much below nominal price. As a result while Mayawati has been making personal gain, the state has suffered huge losses. Mayawati sold sugar mills belonging of state sugar corporation. Eleven mills were sold through auction. Five mills were sold to PontyChadda even below minimum reserved price, said Congress (I). Terms of auction did not permit sale below reserved price yet auction was made below minimum reserved price. Thus while Mayawati’s scam in sale of sugar mills have benefited private parties and Mayawati it has caused loss of thousands of crores of rupees to the state, said Congress (I). The sale of state-owned sugar mills to PontyChaddha, the UP CM’s favourite business baron, is under scrutiny, reports VirendraNath Bhatt Sugar rush Cane being crushed at a sugar mill near Moradabad Photo: ShailendraPandey UTTAR PRADESH Chief Minister Mayawati may find herself in choppy political waters over the disinvestment of sugar mills run by the public sector UP State Sugar Corporation Ltd (UPSSCL). Already,
- 2. the move has been criticised in the CAG audit, and the Lokayukta is conducting a probe after a complaint by a farmer. Now, the Opposition parties have demanded a CBI probe into the sale of five sugar mills for a song — Rs 206 crore — to the CM’s favourite business group run by PontyChaddha, when their actual worth is more than Rs 2,000 crore. Of the 21 mills privatised in October last year, 10 were operational while the rest have been lying closed for several years. The total area occupied by the mills located in urban areas of west, east and central Uttar Pradesh, is more than 500 hectares. The state government claims that the mills were sold after due diligence and by adopting the most transparent method. PontyChaddha, uncrowned king of the liquor business in Uttar Pradesh, already has a sugar mill at Dhanaura in Moradabad district. The acquisitions could thus help him in his existing business, as molasses, a byproduct of crushed sugarcane, is a key raw material for country liquor. In 2008, the Mayawati government had created a special excise zone comprising of five divisions — Bareilly, Moradabad, Meerut, Saharanpur and Agra. Chaddha was given the exclusive rights to run the liquor vends for both country liquor and Indian-made foreign liquor. But in the end, through his proxies and associates, he ended up controlling the liquor business in all the 72 districts of the state. Repeated attempts by TEHELKA to contact Chaddha elicited no response. After the denouement in Karnataka, where BS Yeddyurappa was forced to step down as chief minister following indictment by the Lokayukta on illegal mining, the probe by the Uttar Pradesh Lokayukta, Justice (retd) NK Mehrotra, could become a potent weapon for the Opposition parties in the state to campaign against the ruling BahujanSamaj Party (BSP) during the Assembly election due in early 2012. The BSP is already at the receiving end for rampant corruption in the National Rural Health Mission, which is being investigated by the CBI. Besides the Lokayukta, much to the discomfiture of the Mayawati regime, the CAG is also conducting an audit into the sale of the sugar mills, asking inconvenient questions. “We have detected three clear irregularities in the disinvestment of the 21 sugar mills — the method adopted for the valuation of assets like the plant, machinery and land, the bidding process and huge loss to the state exchequer on account of evasion of stamp duty,” says a CAG official. The scam came to light in October 2010 when VM Singh, who heads the Pilibhit based RashtriyaKisanMazdoor Union, filed a case with the state Lokayukta claiming that the state-owned Amroha Sugar Mill in JyotibaPhule district and Bulandshahr Sugar Mill in Bulandshahr had been sold at prices below market rates. Singh complained that the Amroha Sugar Mill, which has a cane crushing capacity of 3,000 metric tonnes per day and located in an area of 31 hectares, was sold for just Rs 13.94 crore. If one takes the real estate value into account, the property is worth around Rs 250 crore (see box). Similar is the case with the 32-hectare Bulandshahr Sugar Mill, which has a cane crushing capacity of 5,000 metric tonnes per day. It was sold for Rs 29.75 crore when the market value is around Rs 225 crore. The Lokayukta shot off a notice to the state government asking it to explain the discrepancy in the prices. The government justified the lower prices by claiming that the private investor will have to operate the mills and not be able to use the land as real estate. Amroha Sugar Mill JyotibaPhuleDistrictCane Crushing Capacity 3,000 metric tonnes per day
- 3. IN THE reply to the Lokayukta, the then principal secretary (sugarcane) Net Ram wrote, “For getting maximum value of the mills from disinvestment, the UP government had amended the UP Sugar Undertakings (Acquisition) Act in 2009, allowing the land use change subject to certain conditions.” But the move was quashed by the Allahabad High Court in April 2010. The UP government approached the Supreme Court, which in its interim order said the buyers of the mills will be covered by the final order of the apex court. Net Ram concluded that this order also adversely affected the bid values to be offered by the prospective investors. Interestingly, Chaddha, who has a couple of multiplexes, will be able to use the land for real estate development if this change in land use is allowed by the apex court, which is considering the matter. Area 31 hectares Sale Price Rs 13.94 crore Market Price Rs 250 crore Complainant Pilibhit farmer VM Singh Bijnor Sugar Mill BijnorDistrictCane Crushing Capacity 7,500 metric tonnes per day Area 15 hectares Sale Price Rs 101 crore Market Price Rs 500 crore Complainant KiritSomaiyya, BJP MP Bulandshahr Sugar MillBulandshahrdistrictCane Crushing Capacity 5,000 metric tonnes per day Area 32 hectares Sale Price Rs 29.75 crore Market Price Rs 225 crore Complainant Pilibhit farmer VM Singh Lord krishna Sugar Mill SaharanpurCane Crushing Capacity 2,500 metric tonnes per day Area 60 hectares Sale Price Rs 35 crore Market Price Rs 450 crore Complainant YogeshDahiya, Farmers’ Forum Jarwal Road Sugar Mill BahraichCane Crushing Capacity 2,500 tons per day Area 22 hectare Sale Price Rs 27 crore Market Price Rs 250 crore Complainant KiritSomaiyya, BJP MP