The Andhra Pradesh Industrial Infrastructure Corporation (APIIC) has cancelled the land allotment made to Hindustan Petroleum Corporation Ltd (HPCL) to set up a Rs 45,000 crore petrochemical complex in Visakhapatnam. The reason cited for the cancellation was ‘inordinate delay in executing the project’. The company failed to execute the project even five years after it was allotted 1,500 acres in 2007 in the proposed Petroleum, Chemicals and Petrochemicals Investment Region, coming up between Kakinada and Visakhapa-tnam on the east coast.
“The decision to cancel the land to HPCL was taken by the APIIC recently. It has returned the amount deposited by HPCL for the purpose. HPCL had expressed its inability to go ahead with the project as it was unable to get partners for the venture. It also expressed difficulty in executing the project on its own,” said industries and commerce department principal secretary T. S. Appa Rao. HPCL had earlier stated that it was scouting for potential partners and was in negotiations with some, including PSUs.
The government-owned oil company, as an anchor partner, had planned to set up a 15 million tonne per annum (MTPA) petrochemical complex with an estimated investment of Rs 45,000 crore in Visakhapatnam where the company already has a refinery with 8.5 mtpa capacity. The proposed complex was devised to have aromatics and olefin plants to produce value-added products besides other petrochemical units.
Industry sources fear that the decision to cancel the land allotment to HPCL may affect the whole PCPIR project as, even five years after the notification was issued, no state-owned oil company has come forward to become an anchor-partner for the project. Earlier, ONGC had come forward to set up a refinery. However, it later withdrew its proposal. Mr Appa Rao said that the state government was in discussions with a Saudi-based oil company for a proposed project in the PCPIR.
“We have already tied up with Watya India Consor-tium, part of the Kuwait-based Al Qebla Al Watya Incs group, for establishment of a refinery project in PCPIR. A team of officials is likely to visit Kuwait soon to finalise details. A Saudi-based company has also evinced interest. One of these two can be an anchor unit in the PCPIR,” he said. The Kuwaiti company proposed to establish a 4 lakh barrels per day (bpd) refinery project in AP in phases. Phase-I will be 1 lakh bpd with a project cost of about USD 2 billion. The state government has agreed to grant incentives to the project as given in the AP Industrial Investment Policy 2010-15.