TCG takes SEZ battle to Delhi

Amid opposition from Bengal govt, the company pleads with Centre on proposed poly park.

The Chatterjee Group (TCG) is planning to build a petroleum refinery at Haldia in West Bengal, and has applied to the Centre for a special economic zone (SEZ) status for the project.

However, the proposal has run into opposition from the West Bengal government, which is in the midst of a legal dispute with TCG before the Company Law Board (CLB) over shareholding structure of Haldia Petrochemicals (HPL).

The proposal for the new project at Haldia also incorporates the development of a polymer processing industrial park attached to the refinery.

Sources close to the development said that TCG had sought 2,500 acres at Haldia for the refinery and poly park.

The TCG proposal for SEZ was among 88 proposals discussed at the meeting of the inter-ministerial group that examined proposals for SEZs in New Delhi on Friday.

"The SEZ will be spear-headed by the refinery, which may have a capacity of up to 10 million tonne per annum (mntpa), and the group has also said it will be responsible for bringing investors to the poly park," said sources.

When contacted, the state industry secretary Sabyasachi Sen admitted that TCG had applied for SEZ status for its proposed oil refinery at Haldia but added that the state government had decided in principle that it would not permit more SEZs at Haldia because the industrial town was already crowded with them.

"We have discussed the refinery proposal from TCG but the state government feels that Haldia is already crowded with SEZs," he said.

Sen said that the state government had asked TCG to set up its refinery as a tenant inside the chemical hub proposed to be set up there by the Salim Group of Indonesia, which was accorded SEZ status at the October 6 meeting.

"TCG is welcome at the chemical hub and the state government will arrange the required land for the refinery inside the chemical hub," Sen added.

However, sources said the status of a tenant inside the proposed 10,000 acre chemical hub to be developed by Indonesia's Salim group may not be acceptable to TCG, but discussions would be held between the two sides.

Sources said higher crude production from the Krishna-Godavari oil and gas fields from 2008 onwards would be a perfect fit for the TCG refinery. Therefore, it was unlikely that it would accept the government plan to push its project into the Salim SEZ.

According to sources, TCG group indicated a minimum investment of Rs 3,500 crore for the refinery at Haldia, where Indian Oil Corporation (IOC) had a refinery, and HPL had its naphtha cracker to produce petrochemicals and polymers.

IOC was expanding its existing refinery capacity in Haldia from 5 mntpa to 7.5 mntpa.

IOC had indicated recently that it could look at putting up another refinery in the Haldia petrochemical zone as an anchor investor at the proposed chemical and petrochem SEZ there.

"TCG has already purchased close to 500 acres at Haldia for the refinery and polypark. The state government had promised TCG in the late-1990s that it would give land for the refinery. The application for SEZ status has come up now following the announcement of the SEZ policy," said sources.