Place 1 cup sugar in a large heavy skillet over medium heat; cook 5 minutes or until sugar dissolves (do not stir). Continue cooking until golden, and stir well. Immediately pour into a 9-inch round cake pan, tipping quickly until sugar coats bottom of cake pan, and set aside.
Combine remaining 1/3 cup sugar, egg substitute, vanilla, and milk; stir well. Pour into prepared cake pan; place in a large, shallow pan. Add hot water to pan to a depth of 1 inch. Bake at 350° for 1 hour or until a knife inserted near center comes out clean. Remove cake pan from water; let cool 1 hour on a wire rack. Cover and chill 4 hours.
To serve, loosen edges of flan with a knife or rubber spatula. Place a serving plate, upside down, on top of cake pan; invert flan onto plate. Drizzle any remaining syrup over flan.