Petro Chem ministry reviews PCPIR scheme

Anindita Dey / Mumbai

Business Standard, June 17, 2011, 2:18 IST

The department of petrochemicals at the Centre has started a review of its flagship scheme, the Petroleum, Chemicals and Petrochemicals Investment Regions (PCPIR).

Officials said the ministry aimed at creating a window for government funding support and had proposed this to the Planning Commission. It is evaluating the scope of budgetary funding into these projects, apart from the specified mode of VGF (viability gap funding and through public private partnership (PPP).

A committee of the ministry has proposed government grants in the form of gross budgetary support or tax breaks for investors coming into the zone. PCPIR is the flagship scheme of the ministry of chemicals and fertilisers, with approved investments worth Rs 1,54,512 crore in Gujarat, Andhra Pradesh, West Bengal, Orissa and Tamil Nadu.

Under the extant project guidelines, there is no budgetary support and the entire funding is to be done by the participants, which includes a government petrochemical public sector undertaking (PSU) as anchor investor. The VGF scheme provides financial support in the form of grants, one-time or deferred, to infrastructure projects undertaken through PPPs.

The review follows sluggish growth in the projected investment inflow into the various projects of the PCPIR zones approved across India. The ministry met state government reprentatives and have asked for inputs to modify the scheme so as to attract investment in the PCPIR zones.

Officials said a major reason for the slow inflow was recession in various parts of the world. Various state governments extended infrastructure support but very few have offered tangible funding help, apart from Gujarat, till date. Gujarat has notified the PCPIR under the rules for special investment zones and thus extended several tax-related advantages to incoming investors into its Bharuch PCPIR.

The ministry has also taken the initiative of organising major trade fairs in Europe and Latin American countries such as Brazil, Argentina and Mexico to attract foreign investment.

Till date, the Bharuch PCPIR in Gujarat has received Rs 70,000 crore of investments and the state government has completed 60-70 per cent of land development. Petronet LNG is setting up a 1,200 Mw power plant. ONGC Petro Additionals Ltd, a joint venture of ONGC and Gujarat State Petroleum Corporation, is the main anchor investor, with committed project investment of Rs 16,400 crore.

The investments are for a Rs 13,000-crore multi-feed petrochemical cracker and Rs 3,400-crore carbon extraction unit.

The newly approved PCPIR for Tamil Nadu, at Cuddalore and Nagapattinam, has received government support of Rs 5,120 crore. This will be part of investments in external infrastructure of Rs 13,800 crore, over and above an estimated investment of Rs 99,750 crore.The Visakhapatnam and East Godavari PCPIR in Andhra Pradesh has attracted additional investment of Rs 9,600 crore, apart from investment commitment of Rs 73,000 crore through its main or anchor investors — a consortium of Hindustan Petroleum Corporation and GMR. The state government has committed Rs 2,132 crore for developing physical infrastructure, followed by Rs 10,565 crore from private parties and another Rs 6,334 crore through PPP.

Similarly, for the newly approved Orissa PCPIR at Paradeep, the anchor investor, Indian Oil Corporation, is setting up a 15-million tonne per annum refinery, likely to be commissioned in March 2012, at a cost of Rs 29,777 crore. The PCPIR is expected to attract total investment of Rs 2,77,734 crore.

West Bengal Govt to go ahead with Nayachar chemical hub plans

KOLKATA,17th October,2009: The Lok Sabha poll reverses notwithstanding, the Buddhadeb Bhattacharjee government hasn't given up on its industrialization hopes around the proposed chemical hub at Nayachar. It is readying to draft a changed agreement for the Petroleum, Chemicals and Petrochemicals Investment Region (PCPIR).

The chief minister convened a high-level meeting at Writers' Buildings on Friday to do the needful. Among those who attended were other members of the Cabinet sub-committee on industries finance minister Asim Dasgupta and industries minister Nirupam Sen. Others present were land and land reforms minister Abdur Rezzak Mollah, urban development minister Asok Bhattacharya, Left Front chief whip in the state Assembly, Md Masin, and industries secretary Sabyasachi Sen.

According to sources, the meeting was on several industry-related issues, including the PCPIR. Nandigram had figured prominently as the venue for the mega chemical industrial estate and the PCPIR that was to come up near Haldia when the plan was first floated in 2005, and the subsequent agreement was drafted on these lines. After the bloody resistance to the choice of venue (which, experts feel, was a major cause for the Left's reverses), the government has decided to keep its promises unchanged, keeping an eye on the 2011 Assembly elections.

Nayachar is a 64 sqkm island on the Hooghly in East Midnapore. Prasoon Mukherjee, director of New Kolkata International Development (NKID) which through a joint venture with the West Bengal Industrial Development Corporation (WBIDC) is to develop the infrastructure on the island had earlier said the PCPIR is an expense account for NKID, but the government is bent on going ahead with the project.

A senior Writers' official revealed that the revised agreement, with Nayachar as the changed venue, will now have to be clinched between the state, the Centre and NKID. He said those attending the meeting discussed the draft as well as other industry-related issues, such as granting subsidy to Cals Refinery, which will partner the PCPIR. NKID is a 50:50 joint venture between Mukherjee's Universal Success Enterprises Limited, a company registered in Singapore, and Indonesia's Salim Group. Real estate developer Unitech Limited also had a minority equity interest in NKID, but it has recently sold its stake in the firm.

Chemical hub at Nayachar in Bengal gets official clearance

KOLKATA, 7th April: The Centre has given the nod to the Petrochemicals, Chemicals and Petroleum Industries Region (PCPIR) project in Nayachar in East Medinipur in West Bengal, State Industry Secretary Sabyasachi Sen said here on Monday.

Talking to journalists here, he said a separate authority would have to be set up for implementing the project. The Centre is now expected to send the draft memorandum of agreement, which will have to be entered into between the Union Chemicals and Fertilizer Ministry and the State Government.

The meeting was taken by West Bengal Chief Secretary A. M. Chakraborty and attended by the Planning Department Secretary Jaya Dasgupta and the Chairman and Deputy-Chairman of the Kolkata Port Trust and the Haldia Dock Complex (HDC).

Mr. Sen said the project would come up on 204.1 sq. km. of land with the Centre helping set up the infrastructure. The State Government would set up power, drainage and other related infrastructure and. IOC is likely to be the anchor investor setting up a refinery.Mr. Sen also said the navigability of the HDC was also discussed at the meeting.

Japan trip for Nayachar

Calcutta, March 19: A state team will travel to Japan and South Korea to net investors for the Nayachar and Haldia chemical hub. Led by industry secretary Sabyasachi Sen, the team will be part of a larger delegation of the Union ministry for chemicals and fertilizers.

It will meet top officials of Mitsubishi Chemicals, Mitsui Chemicals and Itochu Corporation in Tokyo from March 23-25, followed by meetings with Korean companies — LG Chemicals and Hyundai Chemicals — for two days in Seoul. “We are going to meet officials of the rank of president and above of these companies,” Sen said. The team will leave on Saturday night.

The Union ministry delegation will have representatives from Gujarat and Andhra Pradesh, too. The trip is part of a marketing support initiative of the Centre to the three states where petrochemical hubs are coming up. Industry chamber Ficci coordinated the initiative. The Bengal team will have Nandini Chakravorty, the executive director of the West Bengal Industrial Development Corporation, which is an infrastructure partner in the Nayachar hub with Indonesia’s Salim Group.

Swapan Bhowmik, the managing director of Haldia Petrochemicals, and Sanjay Malhotra, a director of the Delhi-based Cals Refinery that is setting up a unit in Haldia, will also be in the team. An official of Singapore’s Jurong Corporation, which set up Asia’s largest chemical hub there, will be with the Bengal team. Jurong is preparing the plan for Nayachar.

In order to break the language barrier, the state has prepared all presentations in Japanese and Korean. “We have translated all documents for the project in the two languages,” Chakravorty said.This trip will be followed by a similar one to the US. Today, chief minister Buddhadeb Bhattacharjee told the Assembly that the government was just waiting for a letter from the Centre approving the Nayachar chemical hub. “The hub will change the complexion of the state as many refineries and downstream projects will come up,” he said.

West Bengal yet to receive centre’s formal approval on chemical hub

KOLKATA, 18 Mar 2009: The West Bengal government has not yet received an official communication on the recent Union Cabinet clearance for the proposed Nayachara chemical hub. This was indicated by West Bengal’s commerce & industry minister Nirupam Sen in the state Assembly on Wednesday.

Replying to a question by opposition leader Partha Chatterjee, the state industry minister said: "There is no immediate possibility of laying the foundation stone for the proposed hub. We have not yet received clearance from the environment department for the said chemical hub and there is no real difference between the chemical hub and the Petroleum, Chemical and Petrochemicals Investment Region (PCPIR). "I have read in newspapers that the Union Cabinet has given the green signal to the Nayachara chemical hub. But they (the Union government) have not yet informed us in writing," Mr Sen pointed out.

He added that the proposed chemical hub would come up on 250.19 acres and 40 per cent of the land would be used for chemical units. Mr Sen reiterated that 12 lakh people would get direct and indirect employment at the proposed hub which will produce polythene, auto components, synthetic rubber and synthetic fibre which will be used by the garments industry. The Union Cabinet at its last meeting on February 23 had reportedly cleared the proposed chemical hub at Nayachara. The Cabinet session was presided over by external affairs minister Pranab Mukherjee as the Prime Minister was then indisposed.

Meanwhile, the Trinamool Congress has already announced that it will not allow the proposed hub to come up in the pear-shaped Nayachara island near Haldia. Party chief Mamata Banerjee who held an election rally in Nandigram on March 14, had made it clear that her party would not welcome the chemical hub at Nayachara. In fact, the Trinamool Congress candidate from the Kanthi Lok Sabha seat, who also addressed the gathering on March 14, announced that they would everything it took to prevent the Nayachara chem hub from taking off.

However, it is nearly certain that the state government will not step on the gas in expediting the Nayachara venture as Lok Sabha elections have already been announced. But the government might indeed take up the issue after election results are out and the new government in Delhi is formed.

Petroleum, Chemical and Petrochemical Investment Region (PCPIR) in West Bengal cleared by Union Cabinet

New Delhi : With the union cabinet clearing proposals of the West Bengal, Andhra Pradesh and Gujarat governments for setting up Petroleum, Chemical and Petrochemical Investment Regions (PCPIRs) in their territorial domain, a major hurdle has been removed in the way of investment worth more than Rs 4,50,000 crore in PCPIRs, chemicals minister Ram Vilas Paswan said today.

“With the cabinet clearing the proposals for three PCPIRs, I believe investment would now start flowing in these regions. Going by their (the states’) estimates, investment worth Rs 4,50,000 crore should start happening there,” Paswan said. The PCPIR policy notified in April 2007 seeks to ensure adoption of a holistic approach to the development of global scale industrial clusters in the petroleum, chemical and petrochemical sectors in an integrated and environment-friendly manner. “They would have high-class infrastructure, and provide a competitive environment conducive for setting up businesses. They would thus result in a boost to manufacturing, augmentation of exports and generation of employment, all needed to counter the effects of the global economic downturn,” the minister said.

As per the policy, 40 per cent of the area would be a processing zone, while the remaining would be the non-processing area consisting of residential, commercial and other social and institutional infrastructure. In terms of the policy, the state government is only required to notify and not acquire the entire area. A PCPIR includes SEZ(s), Free Trade and Warehousing Zones, Industrial Parks and existing industrial clusters. All existing labour laws would be applicable in the PCPIR and SEZs, in the region, if any, would be governed by special laws.

Of the three proposals approved, the Andhra Pradesh government has proposed to set up a PCPIR at Vishakhapatnam-Kakinada-Rajahmundry belt covering an area of 603.58 sq km. The total industrial investment in it is estimated at Rs 343,000 crore including committed investments of Rs 1, 63,890 crore and the envisaged direct and indirect employment in the PCPIR is estimated to be about 5.25 lakh and 6.73 lakh persons respectively. The state has identified HPCL and GMR-led consortia as the two anchor tenants for this project. Similarly, the Narendra Modi administration in Gujarat has proposed to set up a PCPIR at Dahej spread over blocks of Vagra and Bharuch in south Gujarat, covering 453 sq km at an estimated investment of Rs 50,000 crore.

West Bengal had proposed to host a PCPIR in Haldia in Purba Medinipur district covering the existing Haldia Municipal Area and the adjoining areas of Haldia Development Authority (including Nayachar Island), covering an area of 250.19 sq km. The government has estimated a total investment of Rs 93,180 crore in the proposed PCPIR, including a committed investment of Rs 48,180 crore.