Great opportunity

New Delhi, Nov. 5: The Centre is likely to announce the policy for the petrochemicals and petroleum investment regions (PPIRs) next week, giving a big push to these mega projects proposed at Haldia, Paradip and Mangalore.

The guidelines propose a minimum area of 250 sq km close to a port to set up the PPIR. The state governments will identify the area and then seek the Centre’s approval for the project. Sources said the states, particularly Bengal, have been egging on the Centre to quickly release the guidelines. Bengal is keen to implement the project quickly that will have IOC as the anchor investor.

Sources said that under the new policy, the Centre would make the investments in infrastructure relating to roads, railways and airports.

The state governments will invest in electricity, water and social infrastructure such as schools and hospitals.

The sources said no fiscal incentives, such as income-tax exemptions, would be available for these regions, differentiating them from special economic zones (SEZs). The huge area of the PPIRs is another differentiating feature from the SEZs, which are much smaller. The Centre feels the PPIRs will help in developing world-class infrastructure for the country.

The petrochemicals industry in the country is concentrated in the western region, with Reliance Industries the dominant player; downstream oil companies such as Indian Oil are eyeing the eastern region to expand into this business.

IOC has already set up a petrochemical plant in Panipat in the North and expanded its refinery there. The company was keen to acquire Haldia Petrochemicals to set up a world- class petrochemical hub in Haldia, but the Purnendu Chatterjee group, one of the promoters of Haldia Petrochemicals, had put a spanner in its plans.

Meanwhile ONGC is moving ahead with its proposed petrochemical complex at Mangalore where it plans to invest Rs 12,900 crore. ONGC is expanding the capacity of the Mangalore refinery to 15 million tonnes from 9 million tonnes. The refinery will make additional quantity of naphtha available as feedstock to produce petrochemicals such as paraxylene and benzene.