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D Lilly, Director – Finance, CPCL said that the project has been delayed due to environment clearance. Since the project is over Rs 1,000 crore, to fast track the clearance procedures, it has been referred to the Special Cell for Capital Investment formed by the Prime Minister of India.
“We hope that, the project will be cleared fast,” she told analysts during the conference call.
It may be noted, the company’s resid upgradation project, was conceived to maximise the refinery margins atleast by $1-2 a barrel. The project will produce more high value distillates and enable the company to process more of the cheaper high-sulphurous crude. From the time the company gets the clearance it will take close to three years from start.
The clearance has been delayed mainly because of a ban imposed by the Ministry of Environment and Forests (MoE&F) on new expansion projects in the Manali industrial region, on the Northern part of Chennai.
However, a study conducted in September 2011 had pointed out that pollution levels had significantly dropped in the region, compared with previous years.
The final DFR (draft final report) was completed in 2012 and the investment approval has been obtained.
Meanwhile, the company which was originally planned to invest Rs 700 crore in 2012-13, and it was revised to Rs 350 crore, said Lily. “The revised money, has been spent and mostly in the existing refinery”.
“The scale down on investment was due to financial issues and delay in getting approvals. We decided to go slow in investments,” she added.
Some of the other major investments planned last year include Manali refinery, natural gas, and a pipeline project. “All are at working stage only now, since approved projects are not going forward”.
She added, loans have increased to Rs 5600 crore as on December 31, 2012 from Rs 4,000 crore in March 31, 2012. The increase was due to loss position, things will change from next year, she added.
Commenting on 2013-14 investment plans, she said, as the clearance for the resid project is expected anytime the company is planning to invest around Rs 1,200 crore and major portion of which would be towards the resid project and on the pipeline project, which is to connect CPCL's refinery with Chennai Port.
Meanwhile, the company throughput in 2012-13 was 9.3 million tonnes, by .8 MT of its target and for Fiscal 2014, the throughput target has been set at 10.4 million tonnes, said Lily.
