Haryana buys 2,000 acres for petrochemicals hub

The Haryana government has kicked off the process of setting up a petrochemicals hub in Panipat with the acquisition of almost 2,000 acres of land around Indian Oil Corporation's refinery in the area.

The central government has, however, not yet designated Panipat as a petroleum, chemicals and petrochemicals investment region (PCPIR) though it has been short-listed as one of the five slated to come up in the country.

These petrochemicals hubs are giant special economic zones dedicated to the downstream industry. Each such region would be spread over around 25,000 hectares (61,750 acres).

Central government sources said that large overseas companies like France's Total and Netherlands-based Shell were already showing interest in petrochemical regions in India.

The Haryana government has approved acquisition of 5,000 acres for a petrochemical region in the state.

An Haryana government official said all industries that used the polymers that IOC's paraxylene and purified terephthalic acid (PX/PTA) unit in Panipat produces would be set up next to the existing refinery. "The investments in the region could go up much beyond the Rs 13,000 crore that AT Kearney has predicted," said the official.

The proposed region at Panipat is expected to attract 400 companies and an investment of around Rs 13,000 crore by 2016, according to a report by AT Kearney, the consultants for the petrochemical region.

"All plastic, chemicals, synthetic and other industries related to the use of polymers will come up in the land that we have started acquiring around the refinery complex," he said.

The state has also notified incentive packages for downstream industries that will come up in the zone. These include interest-free loans and exemption from local area development tax and entry tax for raw material, feedstock and capital goods, among others.

In its feasibility report, AT Kearney has said that Rs 2,500-2,800 crore will have to be invested over the next 5-10 years for developing the region. This is likely to generate employment for about 38,000 people.

The petrochemical hub will be developed by a special purpose vehicle formed by IOC, the Haryana State Industrial Development Corporation and private developers.

Other possible regions where petrochemical hubs may come up are Dahej in Gujarat, Visakhapatnam in Andhra Pradesh, Haldia in West Bengal, Mangalore in Karnataka and Paradip in Orissa.