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2 HPCL refineries caught in the red tape

Company still struggling to get the project off ground since its inception at the hands of Congress president Sonia Gandhi two years ago

United Progressive Alliance Chairperson Sonia Gandhi laid the foundation stone for Hindustan Petroleum Corporation Limited’s (HPCL’s) refinery and petrochemical complex at Pachpadra in Barmer district. Two years down the line, the company is still struggling to get the project off the ground.

Before the Rajasthan refinery project, HPCL in 2010 had decided to set up a 9 million tonne refinery in Maharashtra’s Ratnagiri district but the region was declared ecologically sensitive, putting the plan in jeopardy. The moratorium for the Maharashtra project was up to 2014. A year after it elapsed, the company says it has no clue about the future of the project.

The Madhav Gadgil panel had termed the entire Western Ghats an ecologically sensitive area and suggested “no new dams based on large-scale storage be permitted and no new polluting industries, including coal-based power plants, be allowed”. It had classified 142 taluks in the Western Ghats into three ecologically sensitive zones.

“Its an irony that we are a refining company struggling to set up a refinery. It is good to hear about the Make in India campaign and the grand vision that the government has. But nothing seems to be moving. Refineries are completed in five years. We have our plans ready. And the governments are busy playing the blame game,” said a senior HPCL executive.

The Rajasthan government under Ashok Gehlot had promised HPCL would be given Rs 3,736 crore every year for 15 years as an interest-free loan, a Rs 56,000 crore commitment to the project. “This was later termed as a loss to the state by the BJP government. They are still deciding on the terms,” said an HPCL executive.

The refinery-cum-petrochemical complex was to be set at a cost of Rs 37,230 crore and the refinery was to start production by 2017-18. The refinery was to process 4.5 million metric tonnes of Mangala crude and 4.5 million metric tonnes of Arab or other crude oil. The refinery was to have a capacity of 9 million metric tonnes, generate Rs 878,000 crore in income, and provide employment to 140,000 people.

Minister of State for Petroleum Dharmendra Pradhan said the Congress government in Rajasthan had taken the decision in haste before the assembly elections. "The refinery will be set up by HPCL in Rajasthan. We are working on a scheme because we want the refinery to be profitable. The previous government ignored the interests of the state while finalising the project," he said.

Nishi Vasudeva, chairman and managing director, HPCL said, “It is a question of when you are able to get the approvals. The Ratnagiri project would have gone ahead had it not been for the environmental ban. These are circumstantial things.”

HPCL has one refinery each in Visakhapatnam in Andhra Pradesh and Bathinda in Punjab, with capacities of 8.3 million tonnes and 9 million tonnes, respectively. The Bathinda refinery was set up at a cost of Rs 21,500 crore in a joint venture with steel magnate LN Mittal. The refinery’s capacity is slated to be increased to 18 million tonnes.

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