The Ministry of Chemicals and Fertilisers has approved an investment proposal worth Rs 154,512 crore spanning across three regions providing a major boost for investment in the petrochemical sector. The proposal has been approved under its flagship petroleum chemicals and petrochemicals investment regions (PCPIR) policy. This is the first such investments approval by the inter-ministerial high-powered committee ever since the launch of the PCPIR scheme in 2007 with an aim of promoting investment in the chemical and petrochemical sector and position India as a hub for domestic and international markets.
As per the approved PCPIR proposal Rs 44,812 crore will be invested for physical infrastructure development, while the remainder will be contributed various public and private companies on project wise basis across the three PCPIRs. The three PCPIRs that will see investments under the programme include Visakhapatnam and East Godavari districts in Andhra Pradesh, Bharuch in Gujarat and East Midnapore in West Bengal. Of the total physical investments around 20 per cent in each PCPIR except for West Bengal will be funded by the finance ministry as the viability gap funding (VGF). The VGF scheme aims to make infrastructure projects undertaken through public-private partnerships commercially viable provides by providing financial support in the form of grants, one time or deferred.
Further Indian Oil Corporation (IOC) will be the `anchor' investor in the West Bengal PCPIR and has committed investments of Rs 1,800 crore for a coker unit, Rs 4,000 crore for a new paraxylene unit and Rs 3,000 crore for the expansion of its refinery and a new hydro cracker unit. Further the Union government has also earmarked Rs 2,108 crore in its current five-year plan for physical infrastructure. While the remaining Rs 15,923 crore has been committed by the state government will be generated jointly with public-private partnerships. In addition to this a Rs 5,000-crore crude refinery complex for blending crude will be setup by the Spic group-controlled CALS refinery. The refinery is estimated to start operations by the end of 2010. Further both IOC and CALS have proposed to setup grassroot refineries taking the total investment to Rs 93,180 crore.
Meanwhile a consortium of Hindustan Petroleum Corporation Ltd and GMR will be the anchor investors for the Visakhapatnam and East Godavari PCPIR and have made an investment commitment of nearly Rs 73,000 crore. In addition to this the state government has committed Rs 2,132 crore for developing physical infrastructure, while another Rs 10,565 crore will come from private parties. Further Rs 6,334 crore will be generated through public-private partnership. The various other investors in the PCPIR include the likes of ONGC (oil and gas exploration in KG basin), Rain Commodities, Continental Carbon India Ltd, Indian Strategic Petroleum Reserve Ltd, Velankani Chemicals, Air Liquide India, Southern Online Biotechnologies, Reliance Industries Ltd, Bharat Petroleum Corporation Ltd, Hetero Drugs, Baker Hughes, Gangavaram Port Ltd, Visakhapatnam Port Trust, National Thermal Power Corporation, Hinduja Power Project and Kakinada SEZ.
On the other hand ONGC Petro Additionals Ltd (OPAL) will be the anchor investor for the Bharuch PCPIR in Gujarat.
OPAL is a joint venture of ONGC and Gujarat State Petroleum Corporation and has committed an investment of Rs 16,400 crore for the project. Meanwhile the government Rs 253 crore for Physical infrastructure, while another Rs 51,496 crore will come through public-private partnership and commitments of state government and private developers in the project that is expected to generate a total employment of 800,000. Further OPAL will invest Rs 13,000 crore in a multi-feed petrochemical cracker and Rs 3,400 crore in a carbon extraction unit. The various other investors in the project include the likes of ONGC extraction plant, ABG Shipyard, Ruchi Petrochemicals, Gujarat Alkalies and Chemicals Ltd, DIC Fine Chemicals, Sajjan Speciality, Pidilite Industries, Rallis India, Lanxess India, Ginni Filament, Arcoy Biorefinery, Romano Tiles, India Peroxide and Neesa Infrastructure.