The crisis of cooperative sugar mills has quickly developed into a big political issue in Uttrakhand.

BJP members of the state assembly have begun protesting the closure of a sugar mill and imposition of PPP model on the remaining sugar manufacturing units in the state.

While the govt defends its decision invoking the principle of economic viability, the opposition dubs it a sellout.

Sources say chief minister Bahuguna intends having talks with the opposition on the issue for an urgent resolution of the crisis.

The sudden closure of a cooperative sugar mill and infliction of PPP model on the remaining sugar mills in Uttrakhand has roiled politics in the state. The state BJP is incensed over the decision and has charged the Bahuguna govt with a sell-out.

The BJP has expressed fear that the secret deal the govt has entered into with businessmen would have the twin effects of profiting some politicians of the ruling party and forcing thousands of workers to face redundancy.

The party maintains that it does not oppose PPP model as such as it could be useful in the field of infrastructure. But its application in the case of sugar mills does not stand scrutiny, the party asserts.

Sources say the BJP leaders and workers have already started protesting the govt decision through meetings and demonstrations. They have also threatened to begin a state wide movement against the govt, the sources add.

Earlier Chief Minister had promised to discuss the issue with the BJP leaders but his sudden departure for Delhi has left the opposition party wondering if there is something seriously fishy about the deal.

If cooperatives and cooperative leaders do not mend ways, days are not far when they would lose sympathy from all quarters. The case in point is Uttrakhand sugar mills run by cooperatives.

Performing dismally year after year five cooperative sector sugar mills in Uttrakhand have been allotted to Public Private Partnership scheme. Loss of cooperative is gain of PPP model.

On Wednesday the State government decided to close Gadarpur sugarmill on the grounds of economic unviability. The four other sugarmills, till now under cooperatives, were decided to be run on PPP model to improve their financial condition.

The decision to this effect was taken during a meeting of state cabinet chaired by Chief Minister Vijay Bahuguna, Chief Secretary Alok Kumar Jain told reporters.

There are six sugarmills in cooperative and government sector in the state besides four private sugarmills.

The state government had to bail out these five out of six sugarmills from its budget every year and now the government took the decision on the basis of the recommendations of National Sugar Federation, Jain said.

Regarding Gadarpur sugarmill, which was in cooperative sector, Jain said the mill had lost nearly 80 to 90 per cent of the sugarcane area after it became the part of separate hill state and it is economically unviable to run the mill.

He said the cabinet has also decided to use the assets of the mill for paying dues of the sugarcane farmers and transfer its 150 acres of land to State Industrial Development Corporation of Uttarakhand Limited (SIDCUL).

However, Bajpur sugarmill would not be affected by the government’s decision as its financial condition is good due to operation of a distillery from its compound besides sugarcane crushing, he said.

Jain said the sugarcane area of the mill would be diverted to other sugarmills and its 600 permanent and seasonal workers would also be shifted to other mills. He, however, said in case any worker does not want to be shifted to other places, he would be provided an opportunity to take the advantage of Voluntary Retirement Scheme.

Other four sugarmills– Doiwala, Kichcha, Nadehi and Sitarganj, would be run under PPP mode for which they would be leased out to private companies for 25 to 30 years with the condition that they have to retain all the workers of the mills, Jain said.

Nabard has decided that all the profit making district cooperative banks in Uttrakhand would soon be linked with the core banking solution.

There are altogether 10 such cooperative banks in the state.

Sources say some mini cooperative banks with a sizeable business could also be connected with the CBS system.

Indications are that the cooperative banks would soon be set up in three districts that have so far been without them.

The Uttarakhand government has recently decided to take all necessary steps to improve the condition of sugar mills in the state.

The govt has already set up a sub-committee to look into the problems facing sugar mills including the cooperative sugar mills.

There have been reports that the cooperative sugar mills have not only been in the red but also   suffered obsolescence of technology and working methods over the last years.

Urgent efforts are called for to rationalize these sugar mills.