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Six sugar mills in TN to submit bids today

R. Balaji

Among the six sugar mills likely to submit the tenders are Dharani Sugars, Thiru Arooran Sugars, EID Parry, Rajshree Sugars and Sakthi Sugars.

CHENNAI, Oct. 23

THE distilleries in Tamil Nadu are in no position to commence supply of anhydrous alcohol to oil companies from December 1 as required in the tender called by the oil companies, according to industry sources.

Under the circumstances, though some of them are submitting the bids, they are doubtful of being successful in the first bid for supply of anhydrous ethanol to produce ethanol blended fuel, gasohol. The bid closes tomorrow, according to industry sources.

The tender called by the oil companies seeks to identify suppliers who can commence supply from December 1. Six sugar mills are gearing up to submit their bids either today or tomorrow.

According to industry sources, the South Indian Sugar Mills Association had approached the oil companies for an extension of the deadline. However, with the Central Government committed to implementing the gasohol programme from January 1, the oil companies are insistent that supplies commence by December 1. Therefore, they were going ahead with the bid process, and were hoping that some other supplier from outside the State could be identified, sources said.

However, because of cost consideration only the local distilleries can hope to sustain supply of ethanol. Therefore, the oil companies had agreed to come out with another tender early next year and Tamil Nadu companies would have another chance, sources said.

According to industry sources, among the six sugar mills that are likely to submit the tenders are Dharani Sugars, Thiru Arooran Sugars, EID Parry, Rajshree Sugars and Sakthi Sugars. The earliest any of the sugar mills are likely to get the anhydrous ethanol production facility ready is by February 2003, according to industry sources. While the industry had been calling for the introduction of ethanol-blended petrol, there had not been a firm commitment until recently from the Government.

Therefore, the industry had been hesitant to make the required investments. For instance, an existing distillery would have to invest at least Rs 2-3 crore to set up a 20-25 kilolitre per day facility. Since other users do not need anhydrous alcohol on a similar scale, the industry needed an assured market, they said. However, the units have initiated steps to set up anhydrous alcohol production facility. Most were opting for the modern molecular sieve technology, believed to involve high initial investments but lower running cost when compared to other technologies, they said.

According to sources, there had also been another cause for concern regarding the situation in Andhra Pradesh. As a part of a pilot programme, a private mill had bagged the tender for the supply of anhydrous ethanol. But firm orders are yet to be placed, and the prices had also been renegotiated from a basic price of about Rs 18 per litre to Rs 16.50. The inaugural date tfixed for this week had been cancelled and the company had been asked not to commence supply for now, sources said.

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