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The Directorate General Foreign Trade (DGFT) may grant West Bengal’s showpiece industrial project Haldia Petrochemicals more time to pay a Rs 2,600-crore fine for failing to meet its export obligations between 2010 and 2013.
According to a government official in the West Bengal Industrial Development Corporation, the DGFT might also waive a portion of the fine. The technicalities were being worked out, he added.
Amit Mitra, West Bengal’s finance minister, met Arun Jaitley, Union finance minister, to seek his intervention in this matter. Jaitley assured Mitra steps would be taken to ensure Haldia Petrochemicals continued operations.
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“Both of them had a serious discussion. There is hope the issue will be solved soon. This is of supreme importance for the industrial scenario of Bengal,” a government official said.
Earlier, Director General of Foreign Trade Praveer Kumar had said it had been decided to reject Haldia Petrochemicals’ plea for relaxation of customs duty for failing to meet export targets.
Haldia Petrochemicals had obtained permission from the DGFT for importing naphtha at zero duty under the advance licensing scheme. Accordingly, the company had to meet an export obligation of the finished product, which it failed to do.
Haldia Petrochemicals, run by the Purnendu Chatterjee-led The Chatterjee Group, has been operating at 85 per cent efficiency and production is on at full capacity.
A consortium of lenders led by Industrial Development Bank of India (IDBI) recently agreed to sanction a Rs 2,300-crore restructuring package for Haldia Petrochemicals. “We are closely watching the issue as there is a huge exposure to Haldia Petrochemicals,” said a banker.
“This liability was not mentioned in the quotation when we had bid for Haldia Petrochemicals, hence we are not bound to pay it,” a source in The Chatterjee Group said. The Chatterjee Group had agreed to buy 520 million shares — 30.8 per cent of Haldia Petrochemicals’ equity — from the West Bengal Industrial Development Corporation at Rs 25.10 each, matching the price offered by Indian Oil Corporation, after the government invited expressions of Interest last year.
Haldia Petrochemicals, one of the largest manufacturers of high-density polyethylene in the country, supplies different grades of polymers mainly in eastern India. According to industry estimates, Haldia Petrochemicals has a 12.8 per cent share of the polymer industry when it operates at the optimum level.
