Plus, for the sale of 28 sugar mills in the cooperative sector, the government has signed an agreement on Monday with IFCI as an adviser for supervising the entire process.

Under the agreement, the process of transfer of assets of cooperative mills is targeted to be completed within eight months.

The move to appoint an adviser for the privatisation of the mills in the public sector is seen as a major change on the part of the government in its strategy to lure buyers.

Earlier, the process began with the appointment of a valuer for the evaluation of the 33 public sector mills, which did not work in favour of the government. The job of the adviser will be to supervise the entire process — right from evaluation of the assets to inviting bids and finally selling them.

The process of privatisation of 61 sugar mills — 33 in the public sector and 28 in the cooperative sector — was initiated in June 2007 and was targeted to be completed within the same year (August). This process was delayed in the cooperative sector due to litigation. As for the mills in the public sector, it did not take off as the government failed to find any buyers. Of the 33 mills in the public sector, 17 are operational while the rest are closed. The accumulated losses of the public sector mills by the end of March 2008 were over Rs 2,000 crore.

In order to make the deal look attractive, the government had written off the accumulated losses of the mills.