Bio-fuel on slippery track as rlys revisit land lease plan for jatropha plantation

The UPA government may have finally approved the National Policy on Bio-fuels that envisages 20% of the country?s diesel and petrol to be blended with biofuels by 2017. But one of the largest landowners in the country?the Indian Railways?is doing a rethink on its plans to lease out a part of its 43,000 hectare surplus land for jatropha plantation.

The railway ministry had decided to plant jatropha along its railway tracks?a move that would put about 25,000 kilometre of its route, under the plant cover. It also hoped to replace close to 10% of its total fuel consumption with the oil produced. The land along railway tracks was considered suitable by the ministry for jatropha cultivation, as the Bio-fuel Policy does not permit useable land for growing the plant.

However, after a series of pilot runs, the ministry is now having second thoughts over the project and Rail Bhawan officials say it is all but shelved. The test runs did not prove to be very successful as the jatropha plant prospers in semi arid regions. On the other hand, the land next to the railway tracks is low lying and as a result, usually water logged and marshy. ?While initially the project had generated a lot if interest from private developers, the kind of land we are offering has proved to be a disincentive,? a Rail Bhawan official told FE.

The railway ministry had also signed a memorandum of understanding with Indian Oil in 2003, under which, the oil PSU would grow jatropha plants on railway land and sell the oil back. The ministry in turn, would use the oil in its locomotives. Sources said about 60 hectare of land in Gujarat was leased to Indian Oil for the project but it did not prove to be very successful.

The Railways own 4.23 lakh hectare of prime land in the country. While about 3.19 lakh hectare is used for railway operations, about 43,000 hectare lies vacant. Meanwhile, the Railways is not very keen to lease out the 43,000 hectare of its vacant land for commercial farming of the crop.

?We plan to use the land for commercial activities by leasing it out to private developers, which will give us much higher returns than what a commercial plantation would,? the official pointed out.

The move will also impact the railways financially. The ministry hoped to bring down its fuel bill by blending the bio-fuel with diesel. Indian Railways consumes 227 crore litre diesel, annually. With the increase in the price of diesel increased by Rs3 per litre in June this year, the Railways would have to shell out an extra Rs 681 crore annually and Rs560 crore for the remaining ten months of the current financial year.

Private firms however, are still keen to go ahead with their projects in the country, especially with the Bio-Fuel policy in place.

The biofuel industry believes that there is a huge opportunity for taking up jatropha cultivation in at least one third of the 33 million hectare of wasteland in the country, which would significantly reduce the country?s oil imports bill.

Many companies such as Ruchi Soya, D1 Williamson Magor Bio Fuel Limited, IKF Green Fuel Ltd, and Reliance Life Sciences have made substantial investments in promoting jatropha cultivation across the country. D1 Williamson Magor Bio Fuel, a joint venture between UK-based D1-BP Fuel Crops and the Magor group has more than 60,000 hectares of jatropha plantation, and intends to commission two jatropha processing plants by 2009.

A number of states including Andhra Pradesh, Chhattisgarh, Karnataka,Tamil Nadu, Rajasthan, Maharashtra and North Eastern states are also promoting jatropha plantation in a big way. Chhattisgarh has the most well developed jatropha biodiesel programme in the country. It has given away 380 million jatropha seedlings to farmers, enough to cover 1.5 lakh hectares.

Jatropha is a commonly cultivated source of bio-fuel. It produces seeds with about 35% oil content. The oil from the seeds can be combusted as fuel without being refined and can be used in simple diesel engines. In some countries like the US, Malaysia, Austria and Nicaragua , jatropha oil is already being used as a substitute for diesel.