The Punjab government today said it would have a fresh look at the demands for incentives, including raising limit of an interest-free loan, put by steel magnate L N Mittal for setting up the Bathinda refinery.
“We will have a fresh look at their demand,” Punjab Industry Minister Manoranjan Kalia told reporters here today.
He did not give any timeframe for arriving at a conclusion, particularly in the wake of completion of 92 per cent work on the refinery.
Three months ago, Kalia had said that the matter pertaining to grant of additional incentives to the Rs 18,919-crore oil refinery being set up by HPCL-Mittal Energy Ltd (HMEL) at Bathinda was still under consideration, without giving any timeframe for resolving the issue.
Mittal, in the month of August this year, along with top officials of HMEL paid a visit to site and even met Punjab Chief Minister Parkash Singh Badal and is believed to have asked for providing additional fiscal incentives to the refinery.
About 92 per cent of work on Rs 18,919-crore oil refinery has been completed and a sum of Rs 14,000 crore has been spent on this project so far.
HMEL has been seeking Rs 400 crore per annum as interest free loan for the first 15 years from 2011-12 to 2025-26, which is to be paid back per annum from 16th year — 2026-27 — onwards for the next 15 years, Kalia said.
“They (Mittals) are pleading that they are getting better concessions on other states...Now they are demanding a total interest-free loan to the tune of Rs 6,000 crore,” he said.
For additional sops, HMEL had reasoned before state government that the refinery was located at a great distance from sea ports, which would cause increase landed cost of crude oil and cost of its marketing, thereby making the refinery less competitive to other refineries.
According to the deed of assurance signed on August 12, 2005, the state government agreed to grant an interest free loan of Rs 250 crore per annum for five years, amounting to Rs 1,250 crore.
It also offered exemption from electricity duty on generation of power for own consumption for 15 years from date of commencement of commercial production.
It also agreed to share 50 per cent of infrastructure development cost for refinery, deferment of central sales tax to the maximum of 300 per cent of fixed capital investment for 15 years.
HMEL is a joint venture between Hindustan Petroleum Corporation Ltd and Mittal Energy Investment Pvt Ltd, Singapore — a Lakshmi N Mittal Group Company.
Both joint venture partners hold 49 per cent each in the company. The rest is held by financial institutions.
Meanwhile, he said that Punjab is planning to invite investments from IT giants like TCS and Infosys in the state by offering them land in its upcoming ambitious IT park at Rajpura on 1,360 acres of farm land for the project.
The state-owned Punjab Infotech, which is engaged into promotion of IT project in state, has offered Rs 11 lakh per acre for the acquisition of land.
