IOC to invest in Haldia pipeline

 According to Union petroleum minister Ram Naik, the Paradip project is now under review for finalization of its schedule and giving priority on the basis of supply demand scenario of the petroleum products in the country as well as viability. However, one section of the project relating to storage and transportation of crude to Haldia will be implemented soon.

 In a letter to Ramachandra Khuntia, a Rajya Sabha MP from Orissa, Naik has stated that IOC has already spent Rs 585 crore and has committed Rs 1050 crore to the project. The minister assured that efforts are on to implement the full project.

 The future of the refinery project had become uncertain after IOC raised the question of its viability following withdrawal of sales tax subsidies to it by the state government. IOC has virtually stopped work on the project raising doubts about its future.

 Following hue and cry in different circles on these developments, the state government is now considering the issue of restoration of sales tax concession after the Centre clarified that it has no objection if the state granted the sops. While withdrawing concessions, the state government had argued that the empowered committee of the state finance ministers in December, 1999 had resolved not to allow any incentive for new projects.

 Though hopes for the project was rekindled after prime minister AB Vajpayee announced at a public meeting here in July, 2003 that the Centre will implement the project provided the state extended due cooperation, things have failed to move after that.

 Vajpayee had laid the foundation stone of the refinery in May, 2000. The original proposal envisaged a nine million tonne capacity plant to be set up by IOC in joint venture with Kuwait Petroleum Corporation (KPC).

 The project was approved by the cabinet committee on economic affairs with an estimated cost of Rs 8270 crore. KPC later withdrew from the project. The cost of the project meanwhile has escalated to Rs 12,000 crore. So far, around Rs 600 crore has been spent on it.