PANAJI
The government is set to refurbish the 1971-built Sanjivani sugar factory into a ethanol generating plant by using a private partner through a Public Private Partnership model. The plant will not only benefit the sugarcane farmers but will also benefit grain producing farmers as the plant will use seasonal produce of farmers like rice and maize in addition to sugarcane. After technical consultant Deccan Sugar Technologists Association Pune submits its Detailed Project Report, the Agriculture department will float a Request for Qualification and once it is floated within four months the PPP partner will be in place, says Director of Department Public Private Partnership Dr Suresh Shanbhogue.
In conversation with The Goan Dr Suresh Shanbhogue explained the detailed process that has been followed till now and the benefits of the ethanol plant and why the private partner is essential to run such plant and many details about the process.
Dr Shanbhogue said that the Deccan Sugar Technologists Association Pune have studied the sugar factory and they have given a techno-economic feasibility report and the Detailed Project Report.
Proposal is to refurbish the existing factory and set up a 45 kilo litre per day (KLPD) distillery, he said.
"Either the government has to do it on its own or go the other way. The government has decided to go in another way. That is how it has come to us as a department of public private partnership," said Dr Shanbogue while explaining why his department has stepped in.
"Now in this month we will be floating RFQ requests for qualification for selecting a bidder who can technically qualify for the bid.Then among selected RFQ those who are technically qualified we will issue an RFP," said Dr Shanbogue.
That is the current proposal. This much details at this stage we can share. As we progress we will get more clarity, he said.
When asked whether the PPP model will bring the factory in profit, Dr Shanbogue said, "Sugarcane factory is certainly in loss. Sugarcane factor is bleeding about Rs16 crores per year. That is why it is closed. Without any factory work the government is paying money to the farmers. Salary is being paid nearly about Rs5 crores.With the PPP model while bleeding stops there is asset monetization. It is a central government concept called asset monetisation. We can bring a private sector in play to monetise the assets. It is a win -win situation. Sugarcane farmers benefit. When the private sector comes, government expenditure will stop. Government may earn money from it instead of expenditure".
"We will issue DPQ through the agriculture department. Basically we are handholds from the agriculture department. Through the agriculture department it will be issued, he said. Once we issue an RFQ then there is the process of RFP and agreement we can say that in four months time we will be able to have a PPP partner in place if everything goes well," he said.
"There are lots of technicalities involved. Ethanol plant working season only with sugarcane will not be viable. The crushing season of sugarcane in a year is hardly 140 days. The plant has to work throughout the year at least for more than 300 days. Therefore this type of ethanol plants use not only sugarcane. If sugarcane is not there, grains are also used. Grains are also used for ethanol production", elaborated Dr Shanbogue.
To keep the ethanol plant working the majority of the year from a viability point of view, in one season one ingredient is used, in another season another ingredient is used. Ethanol can be produced through different ingredients similar things will happen here, explained Dr Shanbogue.
It will benefit grain farmers also. Rice, maize, broken rice (Kanni) and everything can go into this, said Dr Shanbogue.
We are planning to see that the PPP partner does certain types of mandatory things so that he encourages farmers, farmers are timely paid, good returns are given, he said.
When asked about whether any such government sugarcane plant is converted to ethanol, Dr Shanbogue said that there are many ethanol producing plants in the country "but I am not aware whether a government sugar factory is redeveloping as a PPP into an ethanol factory. I am not very sure whether any other states have done such a thing."
"We have machinery which has a capacity of 1250 CCPD capacity sugarfactory. They were using only 700 CCPD capacity for which also the machinery needed to be refurbished. For this detailed technical assessment is done by the consultant. We have a detailed DPR in place. Hopefully things should work out," said Dr Shanbogue.
Dr Shanbogue said that as per Government India directions oil companies have to mandatorily buy the ethanol which is produced. There is no issue of marketing or PPP partners can't say that there are no buyers, he added.
Once ethanol is produced it will be sold. There is a mandate, said Dr Shanbogue.
