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The state government has voiced its discontent over the lack of commitment by Indian Oil Corporation Ltd (IOCL) to set up the downstream petrochemical complex planned by the oil major at Paradeep, the site of its soon to be commissioned 15 million tonne refinery project.
The delay in establishment of the petrochemical complex has pushed the development of the PCPIR (petroleum, chemicals and petrochemicals investment region) to the back foot. IOCL is the anchor tenant for the PCPIR hub to be set up on 70,214 acres of land straddling Jagatsinghpur and Kendrapara districts.
“Irrespective of various timelines from the state government, IOCL has neither indicated any timeline nor shown any firm commitment to develop the petrochemical complex. It has not responded to the anchor tenant agreement formulated for the PCPIR hub. This has delayed the development of PCPIR in the state and also dented investment prospects in the petrochemical segment,” said a senior state government official.
“We have urged IOCL officials to take up the issue at the highest level and apprise them the concerns of the state. The state government has also communicated to the oil major for arranging a meeting at an appropriate level to sort out the issue,” he added.
IOCL had signed a memorandum of understanding (MoU) with the state government in February, 2004, to set up a 15 million tonne refinery along with a petrochemical complex at Paradeep envisaging a total investment of Rs 55,000 crore.
While IOCL went ahead with its refinery project, it had kept in abeyance the petrochemical complex, citing financial constraints.
Taking serious note of IOCL’s lack of commitment to develop the downstream petrochemical units, the state government had stressed on a renegotiated MoU, fixing firm timelines on the company.
As the anchor tenant of the PCPIR hub, IOCL’s responsibility is to expedite implementation of projects, subject to viability and approval of its board so that the petrochemical feedstock is available in the Paradeep region for downstream processing industries.
The IOCL refinery will produce 5.97 million tonne of diesel, 3.4 million tonne of petrol, 1.45 million tonne of kerosene/ATF (Aviation Turbine Fuel), 536,000 tonne of LPG, 124,000 tonne of naphtha and 335,000 tonne of sulphur, all of which will be for sale in the domestic market.
The refinery and the petrochemical complex will be a part of the projects in the PCPIR hub that is expected to attract investments to the tune of Rs 2.74 lakh crore.
Of the expected overall investment figure of Rs 2.74 lakh crore, the lion’s share would come from the petroleum and petrochemicals sectors at Rs 2.3 lakh crore followed by housing and allied infrastructure at Rs 23,500 crore, external infrastructure at Rs 13,634 crore and Rs 3,500 crore each for chemicals & fertilisers and ancillary sectors.
The mega project is set to create employment for 648,000 people which includes direct employment for 227,000 people and indirect employment for 441,000 others. The turnover of this PCPIR hub is estimated at Rs 4.23 lakh crore with an export potential of Rs 43,000 crore. The PCPIR hub is expected to generate taxes to the tune of Rs 42,000 crore and contribute six per cent to Odisha Gross Domestic Product (GDP).
