Bhogpur Sugar Mill signs contract to manufacture only Rs 80L during off-season operations

After selling power worth Rs 14 crore to Punjab State Power Corporation Limited (PSPCL) from its 15MW cogeneration power plant during the cane crushing season this year, the sugar mill of Bhogpur is content with an income of Rs 80 lakh, 7.35% of the total income to be generated during the ‘off-season’ operation of the power station. Several factory and Sugarfed Punjab officials have raised eyebrows over the low revenue share during the factory’s off-season operation.

To generate revenue from the power station during the off season instead of leaving it idle, the factory authorities at Bhogpur, the state’s first cooperative sugar mill, entered into a contract with a private party based in Khanna to produce electricity. The factory will receive only 7.35% of the total income generated by the factory, while the remaining 92.65% will go to the private party.

The cane crushing season in the state begins in late November and ends in mid-April. The mill then remains closed until the third week of November.

This old mill, which started in 1955 and has completed 66 grinding seasons, has been improved. In addition to being able to crush cane almost three times a day, it now generates 15 MW of electricity after the installation of the cogeneration plant. This was the first season (2021-22) that the modernized plant was fully functional and it exported 8.5MW of electricity to PSPCL after meeting the internal electricity demand of 5MW during the season. cane crushing.

According to the contract, the operator (private company) and the owner (factory) must share the total income received from PSPCL from the sale of electricity in a ratio of 92.65%: 7.35%. The revenue share amount will be subject to the guaranteed minimum annual revenue amount of Rs 80 lakh at the factory, the contract stipulates.

Paramjit Singh Sooch, a former board member of Bhogpur Sugar Mill and sugar cane expert, played a major role in the new improvements at the mill. He said the plant cannot be settled with such a small profit share when the annual depreciation of the machinery is 17%. He also said that to get more profit, the private operator might run the plant with paddy straw, which would be harmful to the plant and could hamper power generation during the crushing season. Plant officials had similar concerns, saying the unavailability of Begasse during the off-season could lead to the use of other biofuels like paddy straw which could damage parts of the power station. The plant’s general manager, Arun Arora, in an interview with The Indian Express, said the contract was signed on the instructions of the government following a proper tender process.

“With regard to the operation of the plant with other biofuels during the off-season, the operator will be responsible for the installation of additional external equipment necessary for the processing of paddy straw and other biofuels. The operator will be responsible for the operation and maintenance (O&M) of its power plant,” GM said, adding that the upgrades will be done on a trial basis.