Jun 12 2011
By KA Badarinath, Siddhartha P Saikia
Financial Chronicle/www.mydigitalfc.com
New Delhi: An inter-ministerial group headed by cabinet secretary KM Chandrasekhar has cleared a Tamil Nadu government proposal to set up a petroleum, chemicals and petrochemicals investment region (PCPIR) to attract Rs 1,00,000 crore in investment.
Union chemicals and fertilisers minister MK Alagiri will shortly move a note before the cabinet committee on economic affairs (CCEA) seeking final nod for the mega project.
Chandrasekhar has directed the state government to come up with phased investment on support infrastructure, including rail, air and sea connectivity shortly.
Tamil Nadu will set up the region over 25,683 hectares across Cuddalore and Nagapattinam districts in the state. Of this, 40 per cent of the land would be for processing and the remaining would be earmarked for non-processing activities, said a senior government official privy to the development.
Nagarjuna Oil Corporation (NOCL) is the anchor investor for the region. NOCL is a joint venture between Tamil Nadu Industrial Development Corporation (TIDCO) and Nagarjuna Fertilisers and Chemicals (NFCL). The joint venture is setting up a refinery project in the region with a capacity of six million tonnes a year.
NOCL has invested Rs 4,500 crore and has projected an additional investment of Rs 5,000 crore in the region by February 2012. It has plans to invest Rs 12,500 crore in expanding the refinery project to 15 million tonnes by 2015.
The second anchor investor in the region will be Chennai Petroleum Corporation (CPCL), which plans to establish an integrated 15 million tonnes per annum refinery and petrochemical complex.
The oil ministry pointed out at the high-powered committee meeting that CPCL has been offered land by TIDCO in Ramanathapuram, which falls outside the proposed PCPIR. Therefore, the presence of the second anchor investor is not assured. However, Tamil Nadu government has assured that CPCL project will be located within the region.
The centre has agreed to provide budgetary support of Rs 4,285 crore for strengthening NH-45A, upgrading state highways and doubling and electrification of the Viluppuram-Mayiladuthurai railway line.
In addition, the region will be eligible to receive Rs 660 crore through viability gap funding for a desalination and common effluent treatment plant.
The panel has also asked the ministry of road transport and highways to consider strengthening NH-45A through private-public partnership.
Meanwhile, the government has also decided to allow existing special economic zones in the region to be governed by the SEZs Act.
In effect, these projects will continue to get fiscal incentives and tax concessions under the act.