Maha okays BOT/BOOT policy to revive cooperative sugar mills

Nagpur: The state govt approved a comprehensive policy allowing cooperative sugar factories to set up by-product processing projects under the BOT (Built Operate Transfer) and BOOT (Built Own Operate Transfer) models to strengthen their financial position, according to a govt resolution issued on Thursday. The resolution, issued by the cooperation, marketing and textiles department, stated that several cooperative sugar mills in Maharashtra faced financial stress, making it difficult to pay assured cane prices to farmers or raise fresh loans for expansion. To address this, the govt permitted mills to invite private investment to establish projects based on sugar by-products without adding a financial burden on the factories. Under the BOT/BOOT framework, a private developer will build the project using its own capital, operate it for a fixed period—generally 5 to 10 years—and subsequently transfer it to the sugar factory. The maximum contract period will be 15 years. Projects up to Rs 5 crore will be approved at the sugar commissioner level, while those exceeding Rs 5 crore will require state-level approval. The policy applies to both financially distressed and financially sound cooperative sugar factories. Distressed units will qualify if they meet at least 1 criterion, such as 3 consecutive years of accumulated losses, negative net worth, audit classification issues, or capacity utilisation below 50%. Factories must obtain prior approval under Section 20(A) of the Maharashtra Cooperative Societies Act, 1960, before entering into agreements with private investors. Selection of developers will be done via competitive process through Expression of Interest and e-tendering. A govt resolution issued on Thursday regarding this noted that such projects—including co-generation, ethanol, bio-CNG, hydrogen, and solar units—are expected to generate additional revenue, create rural employment, and promote technological modernisation in the sugar sector.