Govt set to lease out DMS for 30 years as it goes into losses

June 30, 2018

The government has invited milk cooperatives to run Delhi Milk Scheme (DMS) — a dairy retail unit started by the first President of India Rajendra Prasad in 1959 — on lease for 30 years thus ending selling of milk to Delhiites.

DMS has a milk processing plant of 5 lakh litres of milk per day capacity located in the heart of Delhi and spread over 25 acres. It also has five milk collection and chilling centres plus 566 milk booths located at various places in Delhi and NCR.

DMS has gone into losses of nearly Rs. 900 crore and just has 6 per cent market share in the capital’s milk market, but it sits on huge real estate and retail infrastructure in prime areas of Delhi. Hence the govt may give it cooperatives Gujarat Cooperative Milk Marketing Federation (GCMMF) or other prominent milk cooperatives.

The Operation of DMS would be given depending on “the amount of annual lease rent” offered by the cooperative for use of DMS property and machinery. Also with the feasible operation of DMS, through appointment of a concessionaire, the financial burden on the government on account of funding losses incurred by DMS would reduce and there shall also be a net gain by way of realised lease rentals. The cooperative can also revamp, modernise, and increase capacity of the land and building, plant and the machinery of DMS for milk at its own cost.

But the government will retain ownership of DMS’ land, buildings and the brand, but the bid winner will have the right to use these assets and the brand for 30 years and decide price of the milk product.

The manpower of DMS, at around 700 employees, shall be placed in the ‘surplus pool’ and can be redeployed elsewhere by the government, if they opt not to work for the cooperative or are not selected to work for it.

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