ISLAMABAD, Aug 1: The government has decided to constitute a committee for selection of sugar mills for the establishment of Power Co-Generation Units and fixing of criteria for the scheme. An official told Dawn on Monday that the decision was taken at a meeting, headed by Minister for Industries and Production Jahangir Tareen reviewed the progress on formulation of National Policy for Power Co-Generation by sugar industry and policy on fuel ethanol programme.

Under the scheme, the official said the minimum production target for the sugar millers would be 500-mw for this co-generation programme. It was also approved during the meeting that the power generated by the mills would be purchased by Wapda on approved rate of Nepra.

According to the minutes of the meeting made available to Dawn, it was decided that the sugar mills interested in power co-generation would not be supplied with gas in winter season. While the ministry of water and power would ensure the supply of gas to the sugar mills from March to October.

The sugar mills, which were in proximity of gas pipeline near to existing National Gas Transmission network, would be preferred for gas supply for power generation but the minimum daily crushing capacity of these mills should not be less than 6,000 tons as below this capacity was not viable for the purpose.

Pakistan Sugar Mills Association (PSMA) would chalk out a programme in this connection and would send a list of sugar mills interested in setting up of power co-generation plants.

It was also decided that sugar mills would bear all the cost including bank financing, purchase of land, procurement of machinery etc., for establishment of such power unit. However, the sugar mills would have to enter into an agreement with the government to follow the terms and conditions set out under the government policy for IPPs.

The ministry of water and power would ensure supply of gas to these mills for a period of 10 years on sustainable basis. During the meeting, it was also decided that government would soon finalize terms and conditions, feasibility to start pilot projects on ethanol blending programme.