Uttar Pradesh clears land transfer for ethanol plant

11 March 2019

Indian Oil Corporation (IOC) will take 50-acre land on lease in Gorakhpur, the home turf of chief minister Yogi Adityanath, for setting up an ethanol plant costing nearly Rs 800 crore.

Ethanol plant
Source: Google

The land belongs to the defunct Dhuriapar cooperative mill in Gorakhpur district. The prestigious project had been hanging fire for quite some time over lease rental terms.

The Uttar Pradesh government is eyeing private investment to the tune of Rs 1,600 crore in three defunct cooperative sector mills. While, a portion of the land belonging to the Gorakhpur unit would be handed over to the IOC for setting up a modern ethanol plant, two other cooperative sugar mills at Pilibhit and Ballia districts would be handed over to private players, after bidding, for establishing modern sugar complexes with investment of Rs 400 crore each, thus totalling Rs 800 crore.

On the expiry of the 30-year lease, IOC would hand over the plant to the state sugar federation on ‘As is, Where is’ and ‘On Going Concern’ basis without any debt/pay-out liability.

IOC would set up a second-generation ethanol plant, which forms the part of the larger roadmap of the union petroleum ministry for ramping up the sugarcane-extracted ethanol value chain. This would not only prune the oil import bill but also facilitate remunerative prices to the sugarcane farmers.

The second generation ethanol units employ the latest technology to produce biofuels from farm residue, including sugarcane by-products for mixing in fuel. In contrast, the first generation of plants extracts biofuels directly from sugar and vegetable oils through conventional technology.

Meanwhile, private players would also be roped in for turning around defunct cooperative sugar mills in Pilibhit and Ballia districts. Each unit is expected to generate 8,500 fresh job opportunities in their vicinity while benefitting 8,000 local sugarcane farmers.