The Punjab government has constituted a committee comprising state Finance Minister Manpreet Singh Badal and Chief Secretary S C Aggarwal to consider the concessions demanded by Hindustan Petroleum- Mittal Energy Ltd (HMEL) for the Guru Gobind Singh Refinery being set up at Bathinda.
In the original proposal, the refinery was to get an interest-free loan of Rs 250 crore a year for five years after commissioning of the project.
The promoters are now pitching for an interest-free loan of Rs 400 crore a year and for 15 years. At a discount rate of 10 per cent, the net present value of this concession will be Rs 1,400 crore.
Based on a debt-equity ratio of 3:1, usual for projects of this nature, this means the concessions add up to around 30 per cent of the promoters’ equity.
The project got approval in 1998 and got relaxations like a 50 per cent concession on stamp duty on the purchase of land, and post-production incentives like a partial electricity duty exemption for five years. It is being set up over 1,990 acres.
It was learnt from reliable sources that the company had proposed to put up a power generation plant as part of its sequel to the present investments and this could be an incentive to the power deficit state. The by-products in the refinery can help the company run the power unit and they are open to put it anywhere in the state.
When contacted, Aggarwal said, “It is true that I would be a part of the committee, but the order is yet to be received. Based on that, I would be able to comment on the grounds we are to submit the report to the CM.”
Meanwhile, Chief Minister Parkash Singh Badal said the 9 million MTPA refinery Guru Gobind Singh Refinery at Bathinda being executed by HMEL was expected to be completed by early 2011.
A recent study by Business School of Panjab University had established growth in state GDP in the range of Rs 5,000- 7,000 crore with the commissioning of the refinery.
Already, 65 per cent of the project has been completed. The CM was further informed by HMEL Chief Executive Officer Prabh Das today about the progress on Mundra Port in Gujarat as more than 700 km of connecting pipeline out of the total 1,000 km had been laid from Gujarat to Bathinda and the remaining 300 km would be completed by May, 2010, to transport the crude to Punjab.
It was also stated that the company had already spent nearly Rs 7,000 crore on the project and on its completion the entire project would have an outlay of Rs 19,000 crore.
