Nitish wants Centre to help make Bihar ethanol hub

Chief minister Nitish Kumar has written to Union agriculture minister Sharad Pawar urging him to relax the amendment in Sugar (control) order of December 2007 and strive for presidential assent to the Bihar Sugarcane (Regulation of supply and purchase) Amendment Bill, 2007, to help Bihar develop as an ethenol hub.

Referring to Pawar's statement in Parliament on Bihar's demand for promoting ethanol production directly from sugarcane juice, Nitish said Pawar's assurance on the floor of the House was still "short of expectations".

Pawar, in his statement in Parliament, said the Centre had taken initiatives to blend up to 10 per cent of ethanol in petroleum products. He said the gap between prices of sugar and ethanol made production of ehtanol exclusively an unviable project.

Pawar also pointed out that 11 exclusive ethanol plants in Maharashtra were now closed and at present nobody would come up with such a proposal. He said after their visit to Patna, industrialists in their field and study reports mentioned they did not want to set up sugar mill there. Pawar stressed that in Brazil the mills had a crushing capacity of 35,000 tonnes compared to 2,000 tonnes in India.

Nitish, in his letter dated July 22, said Pawar' arguements we "not in consonance with facts". He said if the Union government was to make mandatory blending up to 10 per cent ethanol with petroleum, the requirement will be very large and it should encourage local ethanol production to meet the demand.

The Bihar CM also said the price of ethanol (Rs 22.50 per litre) was fixed six years ago when crude and petroleum prices was nearly half the current rates.

"There is enough justification to have a re-look at the price being offered for ethanol by petroleum companies," Nitish said stressing that the price difference between sugar and ethenol was an artificial one.

Nitish also stressed that experience of Maharashtra in ethanol production was not relevant to Bihar because the production is targeted to meet the export requirements, not domestic needs. Nitish said in Bihar proposals for setting up 25 sugar mills have been approved of which only four have initiated action.

"The main reason for the others not immediately showing interest is the fall in sugar prices. However, the scenario is likely to change with the rising sugar price," he said maintaining that the state has succeeded in reviving some of its closed sugar mills through privatization and firms like Hindustan Petroleum Corporation and M/s Reliance India made successful bids.

He also pointed out that the state investment promotion board had approved 13 mega projects for production of ethanol, ten of which were sugar-based and three maize-based.

"The proposed capacity of the sugarcane-based plants are 25,000 tonnes per day and in case of maize-based 1,25,000 tonnes," he said while pointing out that each of these mega projects will produce 200 MW power. link