RIL, HPCL to take charge of Bihar sugar units

The Bihar government will tomorrow issue letters of intent (LoI) to Reliance Industries and Hindustan Petroleum Corporation (HPCL) among others for the revival of five sick sugar mills belonging to the Bihar State Sugar Corporation. The state will soon put out advertisements for the remaining 10 mills for which no bids were received.

"The floor price for the 10 remaining mills is in the range of Rs 20-30 crore each", said state Cane Development Minister Nitish Mishra.

Reliance has won the bid for Motipur unit (Rs 57 crore) while HPCL has won two units "" Sugauli (Rs 46 crore) and Lauriya (Rs 45 crore). Rollcon Engineering has won the bid for Lohat unit (Rs 28 crore) while SS Infrastructure has got Ryam unit (Rs 12 crore).

The state will raise Rs 188 crore by leasing out the mills. The money will be used to clear wages and form an exit scheme for the workers, who were employed with the units.

Most of these companies have expressed interest in foraying into ethanol production to take advantage of the mandatory blending norms.

At present, oil marketing companies are required to blend five per cent ethanol in petrol. This will increase to 10 per cent from October 2008.

Moreover, the state government is offering a host of incentives such as capital subsidy, sugarcane purchase tax waiver etc on cane industries.

Last November, the state government decided to offer 15 closed mills of the corporation on a long-term lease of 60 years, extendable by 30 years, on the recommendation of SBI Capital Markets.