Thursday, December 06, 2007

Bihar shows the way...

To attract investment in sugarcane-based industries, the state government amended the Bihar Sugarcane (Regulation of Supply and Purchase) Act, 1981, earlier this year, allowing sugarcane juice to be directly used to produce ethanol or rectified spirit and for co-generation of power. For sugarcane-based industries,the state is also offering a capital subsidy of 10 per cent of the investment, subject to a Rs 100 million ceiling.

Result –

Reliance Industries, Tata Chemicals, Bharti Enterprises’ Fieldfresh and Indian Oil are among several large companies that have evinced interest in leasing closed sugar mills that the Bihar government is offering, mainly to exploit opportunities to make ethanol to meet mandatory petrol blending norms that were introduced this year. Other companies that have acquired the request for qualification (RFQ) forms are public sector Bharat Petroleum and Hindustan Petroleum, and Renuka Sugars, Upper Ganges Sugar, Dhampur Sugar and India Glycols.

Closed for more than a decade, these mills together have a financial liability of Rs 700 crore under various heads and the funds raised by leasing them will be used to clear the liabilities. Last month, the Bihar government decided to offer 15 closed mills belonging to the Bihar State Sugar Corporation on a long-term lease of 60 years, extendable by 30 years, on the recommendation of SBI Capital Markets. Of the 15 mills, eight have been reserved for sugarcane-based industries such as sugar mills or distilleries for ethanol or alcohol production. The remaining seven can be used for industries that may not be sugarcane-based.

A pre-bid meeting is scheduled on December 8 in New Delhi.

Contrast this to what happened in UP that prompted me to send out a wish list. And we call Bihar backward…!

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