Panipat petrochem hub to attract 400 firms, Rs 13,000 cr

The policy on petroleum, chemicals and petrochemical investment regions is still in the making but the Haryana government has already approved acquisition of 5,000 acres of land for such a region in Panipat.

Acquisition of 1,000 acres of land for the first phase has already begun.

These investment regions are giant special economic zones dedicated to the downstream industry.

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

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. A rebate will also be given on land purchase and duty paid on electricity consumed in the petrochemical hub will be waived.

In its feasibility report, the consultant 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 Panipat petrochemical hub will be anchored around Indian Oil Corporation's Panipat refinery. It will be developed by a special purpose vehicle formed by Indian Oil Corporation, the Haryana State Industrial Development Corporation and private developers.

Besides the Panipat petrochemical hub, six more such regions are being planned for different parts of the country. All of them are being planned around existing and upcoming refineries "" at Dahej in Gujarat, Visakhapatnam in Andhra Pradesh, Kochi in Kerala, Haldia in West Bengal, Mangalore in Karnataka and Paradip in Orissa.

According to the concept, each hub must include a refinery and petrochemical plant with downstream chemical units.

The committee on feedstock policy and pricing for petrochemical hubs, headed by Petroleum Secretary MS Srinivasan, had earlier recommended duty-free import of crude oil to facilitate setting up petrochemical hubs across the country.

The committee had also recommended that the government provide a stable tax regime in terms of central, state, local and income taxes for 10-15 years and an appropriate mix of capital grants or soft loans among others; tariff incentives for their domestic sales; and automatically apply special economic zone norms to further the development of the petrochemical regions.