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EXHIBIT 10.3


                            CONTRACTUAL AMENDMENT 2.0
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This Contractual Amendment is made the 18TH day of MARCH in the year 2005, and
changes the Agreement between Pacific Ethanol, Inc. (Owner) and W.M. Lyles Co.
(Design-Builder) for services in connection with the PROJECT (Pacific Ethanol
Plant - Construction; Ethanol Production at the Madera Sites)

By the authorized signatures below, the Owner and Design-Builder agree to amend
the Agreement previously dated on the 7th day of July in the year 2003 and
Amendment 1.0 dated 10th day of May 2004 without invalidating any Articles of
the Agreement or the terms or conditions thereof.

By all rights and requirements, Article 3.0, Paragraph 3.2 shall read as
follows:

ARTICLE 3 - DESIGN-BUILDER'S RESPONSIBILITIES

3.2 GUARANTEED MAXIUM PRICE (GMP) SHALL BE MODIFIED TO

3.2 LUMP SUM / GUARANTEED MAXIUM PRICE (GMP)

3.2.1 GMP PROPOSAL At such time as the Owner and the Design-Builder jointly
agree, the Design-Builder shall submit a GMP Proposal to the Owner. The GMP
shall be the sum of the estimated Design-Builder's Cost of the work including
the Design-Builder's Fee as defined in Article 7 and outlined in any Contractual
Amendment(s). The GMP is subject to modification as provided in Article 9.

3.2.1.1 The Design-Build Documents shall be a minimum of sixty (60)-percent
complete at the time the GMP Proposal is submitted to the Owner. The
Design-Builder shall provide in the GMP for further development of the
Design-Build Documents consistent with the Owner's Program. Such further
development does not include changes in scope, systems, kinds and quality of
materials, finishes or equipment, all of which if required, shall be
incorporated by Change Order.

3.2.2 BASIS OF LUMP SUM / GUARANTEED MAXIMUM PRICE The Design-Builder shall
include in Amendment(s) the GMP Proposal with a written statement of the scope
of work and basis, which shall include:

                  .1 a list of the drawings and specifications, including all
         addenda, which were used in preparation of the GMP Proposal;

                  .2 a list of the assumptions and clarifications made by the
         Design-Builder in the preparation of the GMP Proposal to supplement the
         information contained in the drawings and specifications;

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                  .3 the Date of Substantial Completion and/or the Date of Final
         Completion upon which the proposed GMP is based, and the Schedule of
         Work upon which the Date of Substantial Completion and/or the Date of
         Final Completion is based;

                  .4 a schedule of applicable alternate prices, unit prices and
         time and material prices if necessary;

                  .5 Additional Services if any;

                  .6 the time limit for acceptance of the GMP proposal;

                  .7 a statement of any work to be self-performed by the
         Design-Builder; and

                  .8 a statement identifying all patented or copyrighted
         materials, methods or systems selected by the Design-Builder and
         incorporated in the Work that are likely to require the payment of
         royalties or license fees.

3.2.3 REVIEW AND ADJUSTMENT TO GMP PROPOSAL The Design-Builder shall meet with
the Owner to review the GMP Proposal. In the event that the Owner has any
comments relative to the GMP Proposal, or finds any inconsistencies or
inaccuracies in the information presented, it shall give prompt written notice
of such comments or findings to the Design-Builder, who shall make appropriate
adjustments to the GMP, its basis or both.

3.2.4 ACCEPTANCE OF GMP PROPOSAL Upon acceptance by the Owner of the GMP
Proposal, as may be amended by the Design-Builder in accordance with
Subparagraph 3.2.3, the GMP and its basis shall be set forth in Amendment(s).
The GMP and the Date of Substantial Completion and/or the Date of Final
Completion shall be subject to modification in Article 9.

3.2.5 FAILURE TO ACCEPT THE GMP PROPOSAL Unless the Owner accepts the GMP
Proposal in writing on or before the date specified in the GMP Proposal for such
acceptance and so notifies the Design-Builder, the GMP Proposal shall not be
effective. If the Owner fails to accept the GMP Proposal, or rejects the GMP
Proposal, the Owner shall have the right to:

                  .1 Suggest modifications to the GMP Proposal. If such
         modifications are accepted in writing by Design-Builder, the GMP
         Proposal shall be deemed accepted in accordance with Subparagraph
         3.2.4;

                  .2 Direct the Design-Builder to proceed on the basis of
         reimbursement as provided in Articles 7 and 9 without a GMP, in which
         case all references in this Agreement to the GMP shall not be
         applicable; or

                  .3 Terminate the Agreement for convenience in accordance with
         Article 11 .

In the absence of a GMP the parties may establish a Date of Substantial
Completion and/or a Date of Final Completion.

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3.2.6 PRE-GMP WORK Prior to the Owner's acceptance of the GMP Proposal, the
Design Builder shall incur cost that will be reimbursed as part of the Cost of
the Work, only as provided in this Agreement and as the Owner may specifically
authorize in writing.

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By all rights and requirements, Article 7.0, shall read as follows:

ARTICLE 7 - COMPENSATION SHALL BE MODIFIED TO

ARTICLE 7 - CONTRACT PRICE

7.1 DESIGN PHASE

7.1.1 To the extent required by applicable law, the cost of services performed
directly by the Engineer is computed separately and is independent from the
Design-Builder's compensation for work or services performed directly by the
Design-Builder; these costs shall be shown as separate items on applications for
payment. If an Engineer is retained by the Design-Builder, the payments to the
Engineer shall be as detailed in a separate agreement between the Design-Builder
and the Engineer.

7.1.2 The Owner shall compensate the Design-Builder for services performed
during the Design Phase as described in Paragraph 3.1, including preparation of
a Lump Sum / GMP Proposal as Amended and described in Paragraph 3.2 for
establishing the project requirements, general business planning and other
information and documentation as may be required to establish the feasibility of
the project, making revisions to the Schematic Design, design Development,
Design, coordination, management, expediting and other services supporting the
procurement of materials to be obtained, or work to be performed, by the Owner,
including but not limited to telephone systems, computer wiring networks, sound
systems, alarms, security systems and other specialty systems which are not a
part of the Work, Preliminary Construction Schedules and Estimates, Construction
Documents forming the basis of the Lump Sum/GMP.

7.1.3 Compensation for Design Phase Services, as part of the Work, as outlined
in Amendment(s) shall include the Design-Builder's Fee as established and paid
in proportion to the services performed, subject to adjustment as provided in
the Contract Documents.

7.1.4, 7.1.5, 7.1.6 AND 7.1.7 shall not be modified and retain their original
wording and intent

7.1.8 All compensation for the Design Phase shall be outlined in Amendment(s)
attached to this Agreement.

7.2 CONSTRUCTION PHASE

7.2.1 The Owner shall compensate the Design-Builder for Work performed following
the commencement of the Construction Phase on the Cost of the Work as allowed in
the Lump Sum / GMP and outlined in Amendment(s) with necessary adjustments under
Article 9.

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7.2.2 The compensation to be paid under this Paragraph 7.2 shall be limited to
the Lump Sum / GMP established in Amendment(s), as the GMP may be adjusted under
Article 9.

7.2.3 Payment from Construction Phase shall be as set forth in Article 10. If
Design Phase Services continue to be provided after construction has commenced,
the Design-Builder shall continue to be compensated as provided in Paragraph
7.1, or as mutually agreed.

7.2.4 All compensation for the Construction Phase shall be outlined in
Amendment(s) as attached to this Agreement.

7.3 ADJUSTMENT IN THE LUMP SUM/GMP Adjustment in the Lump Sum/GMP shall be made
as follows:

                  .1 for changes in the Work as provided in Article 9, the GMP
         shall be adjusted as outlined in the Contract Documents.

                  .2 for delays in the Work not caused by the Design-Builder or
         those under control of the Design-Builder, except as provided in
         Subparagraph 6.3.2, there will be an equitable adjustment in the
         Design-Builder's Fee to compensate the Design-Builder for increased
         expenses; and

                  .3 if the Design-Builder is placed in charge of managing the
         replacement of an insured or uninsured loss, the Design-Builder shall
         be paid an additional fee in the same proportion that the
         Design-Builder's Fee bears to the estimated Cost of the Work for the
         replacement.

The Owner agrees to pay the Design-Builder for the Cost of the Work as defined
in this Article.

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By all rights and requirements, Article 8.0 shall read as follows:

ARTICLE 8 -- COST OF THE WORK

DELETED IN ITS ENTIRETY

By all rights and requirements, Article 12.0, Paragraph 12.3 shall read as
follows:

ARTICLE 12 - SUSPENSION AND TERMINATION OF THE AGREEMENT AND OWNER'S RIGHT TO
PERFORM DESIGN-BUILDER'S RESPONSIBILITIES

12.3 TERMINATION BY OWNER If the Owner terminates this Agreement, the Owner
shall pay the Design-Builder for all costs associated with the Work per Article
7.0. In addition, the Design-Builder shall be paid an amount as set forth below:

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                  .1 If the Owner terminates this Agreement and selects another
         fled Design- 12 Builder and/or Contractor with a license to conduct
         business within the STATE TO COMPLETE THE PROJECT THE Owner shall pay
         the Design Builder for all Services as set forth above and a premium of
         five million dollars, ($5,000,000.00).

                  .2 The Owner shall also pay to the Design-Builder fair
         compensation, either by purchase or rental at the election of the
         Owner, for all equipment retained, The Owner shall assume and become
         liable for obligations, commitments and unsettled claims that the
         Design-Builder has previously undertaken or incurred in good faith in
         connection with the Work or as a result of the termination of this
         Agreement. As a condition of receiving the payments provided under this
         Article 12, the Design-Builder shall cooperate with the Owner by taking
         all steps necessary to accomplish the legal assignment of the
         Design-Builder's rights and benefits to the Owner, including the
         execution and delivery of required papers.

AMENDMENT 2.0 SCOPE OF WORK

This Amendment, including its exhibits, appendices and other documents,
constitutes compliance with aforementioned executed, Agreement, and pursuant to
Section 32 of the Agreement, constitutes the scope of work and Lump Sum /
Guaranteed Maximum Price (GMP) for the following scope of work,

By the date indicated within this Amendment, the Design-Builder is herby
authorized by the Owner to commence with the early activities as indicated and
related to the design and construction of the Project prior to the negotiation
of the Final Lump Sum / GMP. Work that is 'authorized by this. Amendment
includes, but is not limited to, those construction and design activities as
listed below:

         o        Authorize the Design-Builder to continue design, engineering
                  and procurement services as necessary to support construction
                  activities.
         o        Mobilization and Project Set Up
         o        Three (3) Months of Project Management
         o        Site Preparation and Demolition
         o        Rough Grading, Over Excavation, Ponds and Berms
         o        Fine Grading (Partial)
         o        Site Concrete (Partial
         o        Site Utilities
         o        Site Fencing
         o        Concrete Earthwork (Partial) .

              Pursuant to the payment terms and conditions indicated in the
              Agreement, the Owner shall pay for all costs associated with the
              above scope of work in a Lump Sum Price of $2,978,000

                                      -END-

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THIS CONTRACTUAL AMENDMENT IS ENTERED INTO AS OF THE DATE INDICATED ABOVE BY THE
AUTHORIZED INDIVIDUALS FOR THE COMPANIES LISTED BELOW.


OWNER:
PACIFIC ETHANOL, INC.
BY: /S/ RYAN TURNER
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PRINT NAME: RYAN TURNER
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DESIGN-BUILDER:
BY: /S/ TODD R. SHELLER
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PRINT NAME: TODD R. SHELLER, VICE PRESIDENT
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