The Hindu Business Line : Rlys may float first tender for bulk buying of bio-diesel

New Delhi April 20 The Indian Railways is working on a proposal to float a tender to acquire 50 million litres of bio-diesel annually. If the tender is floated, this would be the Railways' first tender for bulk procurement of bio-diesel.

"We are considering a move to start using bio-diesel blended fuel in our locomotive sheds located in the main trunk routes," official sources said. Starting by using 10 per cent blended diesel, the Railways is contemplating migrating to 20 per cent blended levels. This move is driven by its move to adopt environment-friendly fuel.

The likely suppliers would be oil-marketing companies including Reliance and other firms growing jatropha.

On whether bio-diesel would be cheaper than diesel for Railways, the sources said, "Based on our interaction with players, it does not appear that bio-diesel would be significantly cheaper. However, if bio-diesel is more expensive than diesel, we may not opt for bio-diesel."

However, at present, there are questions on the availability of bio-diesel in the country. Most of the companies involved in bio-diesel activities point out that "such capacity is currently not available domestically". Industry sources say that they are struggling to sell the idea of jatropha plantation and bio-diesel units to entrepreneurs because economically viable models in this sector are not available. Companies such as Indian Oil Corporation and Reliance Industries are involved in experimental projects.

"Though companies are in the process of setting up bio-diesel plants, to get the final produce from jatropha alone, it may take 2-3 years," says Mr Srinivas Prasad Moturi, Secretary, Biodiesel Association of India.

While the industry feels that to make bio-diesel production business viable, initially other sources such as edible oil need to be used, the Railways is contemplating restricting the tender for jatropha-based bio-diesel only.

Bio-diesel plants are expected to come up over the next few years. Apart from new players, Reliance and IOC are also looking at the prospects of setting up bio-diesel plants.

Jatropha is an environment-friendly oilseed plant that is used to produce bio-diesel. The Railways has successfully experimented running locomotives using jatropha-oil blended diesel. The Southern and Northern Railways have already run trains on bio-diesel blended fuel.

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