Southern States - Tamil Nadu   

Cooperative mills going private

By Radha Venkatesan

Chennai March 13. In a major policy move, the Tamil Nadu Government has decided to throw open the cooperative sector to private companies.

Going the Andhra Pradesh way, Tamil Nadu will soon clear the legal decks for selling off its cooperative sugar and spinning mills, which have piled up nearly Rs. 1,500-crore losses over the years.

The Cabinet, which met on March 4, is believed to have given the nod for amending the Tamil Nadu Cooperative Societies Act, to provide for takeover of the cooperative mills by private companies. ``The Act will be amended with an enabling feature to hand over the mills to private parties,'' a highly-placed source said. An amending Bill is likely to be introduced in the budget session.

For the State Government, wracked by a severe financial crisis, selling off the loss-making spinning and sugar cooperative mills appears the most viable option as it has no resource to pull them out of financial trouble.

Of the 16 cooperative sugar mills, only the two at Cheyyar and Chidambaram have netted profits, which total about Rs.2 crores. One of the 14 loss-making units, the Madurantakam sugar mill, is under lay-off.

Besides, with the Government discontinuing fixing of state-advised price in addition to the statutory minimum announced by the Centre, the Finance department stopped providing the ways and means advance to the mills, which produce about 75 lakh tonnes of sugar every year. And, the annual losses in running the mills have shot up to Rs. 71 crores, say officials. Also, adding to the worries of the Sugar Directorate, the cane farmers now prefer to supply for private parties, as they offer Rs. 30 more than the statutory minimum price of Rs. 645.90 a tonne.

Spinning mills also ailing

It is the same ``red'' story for almost all 18 cooperative spinning mills. While four of them have already shut down, the Handlooms department is unable to shore up the remaining mills against the mounting losses.

And, bogged down by obsolete machinery and operational costs, none of the mills is on the road to recording profits. In fact, they are struggling to pump in Rs. 3 crores required every month to keep the mills going.

Official sources say that almost 50 per cent of the employees of the spinning mills have already opted for a voluntary retirement scheme. The Government will have to look for ways of protecting the interests of the remaining 5,500 workers.

In the sugar mills, at least 8,000 workers may lose their jobs, courtesy the privatisation policy.

However, the sell-off may take a couple of years, depending on offers from the private sector.

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