Private firms may be roped in for big chemical estates

The Centre plans to set up mega chemical industrial estates (MCIEs) in Haldia and Visakhapatnam, for the development of which it is likely to invite proposals from private companies.

The twin projects, to be built through public-private participation, will see an initial investment of Rs 20,000 crore.

"Leading consultancy company Mott MacDonald is preparing the feasibility report for the MCIEs and is expected to submit it before April," Harmeet S Singh, director, department of chemicals, told Business Standard. She said the government was planning to start more such parks across the country.

"We have written to most state governments and contacted public sector companies as well for investing in the parks," Singh said.

The industrial estate would provide integrated infrastructure which includes a captive port with adequate berthing facilities, chemicals storage terminals, a common effluent treatment plant and an effective green belt to segregate industrial units and human settlements, said sources close to the development.

The bidding process for the project development is expected to start in the next financial year. On completion of the project, an investment of Rs 60,000 crore is anticipated from the private and public sector petrochemical companies from both within the country and abroad.

The feasibility report of Mott MacDonald deals with institutional framework developing, environmental and social assessment, financial feasibility, risk assessment and contractual and legal framework developing.

The Centre is expected to form a special purpose vehicle (SPV) for the management of MCIEs in association with state governments and private investors. A refining company or a cracker complex will be anchoring this chemical park.

"About 3,000-4,000 acre of land will be required for the project. The MCIEs should be located close to ports with handling capacity of 2-3 lakh tonne. Besides, 200 mw power supply is necessary for the projects," a source said.