Railways

Rlys step up bio-diesel plan, call tenders for setting up plants

Ashutosh Kumar
Posted: 2008-10-16 23:49:03+05:30 IST
Updated: Oct 16, 2008 at 2349 hrs IST

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New Delhi,Oct 15: The Indian railways, which has been testing the compatibility of bio-diesel in its locomotives for the last five years, has invited tenders for setting up of four bio-diesel esterification plants at an investment of Rs 78.5 crore to supply bio diesel to the railways.

Esterification is the chemical process of converting the oil extracted from oilseeds, or say jatropha, to bio-diesel compatible for use in diesel engines.

The plants will come up at Tughlakabad, Raipur, Itarsi and Erode. However, the locations are tentative and may be changed on logistical considerations.

“We are targeting a capacity of 50,000 litres of bio diesel from each unit per day, totaling 2,00,000 litres a day. Initially we will blend five per cent bio-diesel with the high-speed diesel used in locomotives, and take it up to 20% in the future,” said Pradeep Kumar, chief administrative officer, Indian Railways Organisation for Alternative fuels.

“We have been testing the blending process over the last five years in our locomotives. We have completed the tests and found that bio- diesel can be blended with high-speed diesel (HSD) with least modifications in the engine,” added Kumar.

While the railways will provide land for the projects, the companies will have to meet the establishment as well as the operational cost and provide bio-diesel to the railways at a pre-determined and competitive price. The operational cost per plant per annum is Rs 60 crore.

The duration to set up the plants is twelve months and the completion period of the contract is twenty years. As far as the railways’ contributions are concerned, it will provide land in the diesel sheds/workshops at locations convenient to the companies for setting up of the plants.

Sourcing oil-seeds/raw oil for making the bio-diesel will be the company’s responsibility. However, sourcing of raw materials has been the grey area in railways’ earlier bio-diesel initiative.

“We got an MoU signed with the Indian Oil Corporation five years ago. As per the deal, IOC was provided land to grow jatropha by the railways and supply bio-diesel to it, which did not fructify,” said a railways official.

However, talking about the feasibility of the initiative, Amrit Pandurangi, India leader (infrastructure), PriceWaterhouse Coopers said, “There is no issue as far as the market part is concerned. owing to the volatility in the oil prices, the railways too might be feeling jittery. In this scenario, why not have a captive production units so...

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