Red tapism and a tale of HPCL’s two refineries
In September 2013, the UPA chairperson Sonia Gandhi laid foundation stone for Hindustan Petroleum Corporation Limited’s (HPCL) Rajasthan Refinery and Petrochemical Complex at Pachpadra in Barmer district. Two years down the line, the company is still struggling to get the project off the ground.
In 2010, before the Rajasthan Refinery project, HPCL decided to set up a nine million-tonne-per-annum (mtpa) refinery in Maharashtra’s Ratnagiri district but the Madhav Gadgil panel termed the region an ecologically sensitive one, putting the refinery plan in jeopardy.
The moratorium (applicable in the case of the Maharashtra project) was up to 2014. A year down the line, the company says it has not clue on the future of the project.
The Madhav Gadgil-led Western Ghats ecology expert panel had termed the entire hill range an ecologically sensitive area and suggested “no new dams based on large-scale storage be permitted in ecologically sensitive zone-1 and no new polluting industries, including coal-based power plants, be allowed in the zones”. It had classified 142 taluks in the Western Ghats into three ecologically sensitive zones.
Its an irony that we are a refining and marketing company struggling to set up a refinery. It is good to hear about Make in India campaign and the grand vision that the government has. But nothing seems to be moving off the ground. In five years refineries get completed. Here we have our plans ready and the governments are busy playing the blame game,” said a senior official from HPCL.
The Rajasthan government under Ashok Gehlot as the Chief Minister had promised fiscal incentives to HPCL where in the company would have been given a fiscal support of Rs 3,736 crore every year for a period of 15 years in the form of an interest free loan, making a commitment to give Rs 56,000 crore in 15 years to the project.
“This however, was later termed as a loss to the state by the BJP government. They are still deciding on the terms,” said an HPCL official.
The refinery-cum-petrochemical complex was to be set up with an estimated cost of Rs 37,230 crore where the refinery was to start production by 2017-18. The proposed refinery was to process 4.5 Million Metric Tonnes (MMT) of Mangala Crude and 4.5 MMT of Arab or other crude oil.
It was envisaged that the total capacity of refinery would be at 90 lakh matric tonnes per year where after completion, the refinery would have generated an income of Rs 8 lakh 78 thousand crore rupees and provide employment to one lakh forty thousand people.
This week Union Minister of State for Petroleum Dharmendra Pradhan accused Congress of misleading people on the issue of refinery, saying the previous government in the state had taken the decision in haste before the assembly elections.
However, the union and the state governments are committed for the project and the refinery will be set up in Rajasthan by HPCL. “The project of refinery will be set up by HPCL in Rajasthan. We are working on a scheme for it because we want the refinery to be a profitable project. The former government ignored interests of state in finalising the project,” he said.
When asked about the road blocks HPCL has been facing in setting up its refineries, Nishi Vasudeva, Chairman and Managing Director, HPCL said, “It is not reflection on the project execution capabilities but a question of when you are able to get the approvals. The Ratnagiri project had gone quite ahead and had it not been for the environmental ban that came into place, it kept getting extended. These are circumstantial things which define and decide how fast one goes ahead.”
HPCL has one refinery each in Visakhapatnam (Andhra Pradesh) and Bathinda (Punjab), with capacities of 8.3 million tonnes per annum (mtpa) and nine mtpa, respectively. The Bathinda refinery was set up at a cost of Rs 21,500 crore through a joint venture with steel magnate L N Mittal. The refinery’s capacity is slated to be increased to 18 mtpa.
