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Reliance, HPCL among bidders for Bihar sugar mills

Ajay Modi  |  New Delhi 

Reliance Industries, Hindustan Petroleum Corporation Ltd and India Glycols Ltd are among the leading companies that have bid for closed sugar mills in Bihar.
"Among the sugar companies, the KK Birla group's Upper Ganges Sugar and Industries has also made a bid," said a state government official, adding that the qualification of technical bids will take place by December 29.
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 5 per cent ethanol in petrol.
This will increase to 10 per cent from October 2008. Moreover, the government of Bihar is offering a host of incentives like capital subsidy, sugarcane purchase tax waiver etc on sugarcane-based industries.
To attract investments in sugarcane-based industries, the state government amended the Bihar Sugarcane (Regulation of Supply and Purchase) Act, 1981, earlier this year, allowing sugarcane juice to be directly used to produce ethanol or rectified spirit and for co-generation of power.
Last month, the Bihar government decided to offer 15 closed mills belonging to the Bihar State Sugar Corporation for a long-term lease of 60 years, extendable by 30 years, on the recommendation of SBI Capital Markets.
Of the 15 mills, eight have been reserved for sugarcane-based industries like sugar mills or distilleries for ethanol or alcohol production. The remaining seven can be used by non-sugarcane-based industries.

First Published: Fri, December 21 2007. 00:00 IST