The Andhra Pradesh PCPIR zone will be delayed as the anchor tenant Hindustan petroleum Corporation Ltd has hit new roadblocks in its planned refinery projects in the zone.
Firstly, due to Visakh area getting classified as a critically polluted zone by Central Pollution Control Board (CPCB), there is a general embargo on further capacity expansion for industries in the Visakh bowl area. Since the proposed expansion plan for visakh refinery falls in this industrial belt, th expansion is not possible. The project envisaged expansion of the refinery fom its present 8.4 MMTPA capacity to 15 MMTPA. It may not appear feasible in the near future, said officials.
Besides for technical and financial support, HPCL is also looking for a joint venture partner for this project. According to official sources, it is also in talks with Gas Authority of India Ltd for joint venture partnership to develop this PCPIR zone. Some are also of the view that HPCL is trying to rope in foreign partner for this project. However no talks are confirmed and in very preliminary stage, added officials.
Secondly, the greenfield 15 MMTPA Refinery cum Petrochemical Project at APSEZ proposed with an investment of Rs 32,000 crore in Visakhapatnam is delayed due to market conditions. According to officials, cashflow due to tough economic conditions is one of the reasons as to why the PSU refinery HPCL is unable to commit funds for this project. Besides, there is an oversupply of polymers in the Indian market over and above heavy imports. Due to an inverted duty structure wherein the raw materials attract higher duty compared to the processed polymer and plastics, many traders import raw material.
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Now, HPCL is planning to implement a Greenfield project outside the Visakhapatnam bowl area about 40 km from the existing location and thus the whole process will start afresh from requisition of the land.
The second anchor tenant GMR is still in discussions to finalise its proposed 15 MMTPA refinery and a 450,000 MTPA Polypropylene Unit at an overall cost of Rs. 31,000 crore. According to official sources, they are looking for technology partners.
Other major investments in this zone include ONGC (Oil and gas exploration in KG basin, Gas Supply and Supported Infrastructure to transmit gas by Reliance Industries, Rain Commodities Ltd, Continental Carbon India Ltd , Indian Strategic Petroleum Reserve Limited for crude oil storage cavern, Velankani Chemicals, Air Liquide India, Southern Online Biotechnologies Ltd, Confidence Petroleum India Ltd, Vopak, BPCL (bottling plant), Hetero Drugs Ltd, Baker Hughes, Naturol Universal Biofuel, Reliance Bio fuel , Gangavaram Port Ltd:, Vishakhapatnam Port Trust, NTPC, Hinduja Power Project and Kakinada SEZ pvt Ltd.
The total investment till date in this zone has been Rs. 9700 crore with an actual employment of around 90,000 people.