The Telegraph
Since 1st March, 1999
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Land bar to IOC Haldia plan

New Delhi, Nov. 5: The expansion plans of Indian Oil Corporation (IOC) for its Haldia refinery appear to have run into a hurdle, with the fertiliser ministry shying away from handing over the land for expansion.

IOC needs 80 acres adjacent to its refinery that is on lease with Hindustan Fertiliser Corporation Ltd (HFCL), under the fertiliser ministry, from the Calcutta Port Trust, which is under the shipping ministry.

The shipping ministry is keen to give the land to IOC but has been frustrated by the fertiliser ministry’s intransigence on the issue.

Sources said the shipping ministry has sent another letter to the fertiliser ministry on the transfer of land to IOC. The fertiliser ministry appears to be stalling the issue by suggesting use of the land by HFCL, a sick company, needs to be considered by the shipping ministry.

Sources said that the shipping ministry is working on a fresh long-term lease agreement to give the land to IOC. However, it appears that the move has met with a lukewarm response from the fertiliser ministry.

The existing lease between the Calcutta Port Trust and HFCL will have to be terminated prior to implementing the new lease. Besides, HFCL owes Rs 5 crore to the port that has pitchforked the question of IOC coughing up the sum on behalf of HFCL.

IOC appears to be wary of Reliance Industries’ proposed plan to enter the petrochemicals sector in the state. IOC had suffered earlier when it lost out to Reliance in the race for IPCL just as it was poised to take over IPCL with which it enjoyed strong synergies.

IOC wants to prevent Reliance from expanding its dominance in the rest of India to the East by drawing up ambitious plans for the region.

The Haldia refinery of IOC initially had a capacity of just 2.5-million tonnes (mt) but has expanded to a size of 6 mt.

With the Paradip-Haldia crude pipeline scheduled for this fiscal, IOC will have the infrastructure to supply large quantities of crude to Haldia. The oil major is, therefore, keen to expand in Haldia and increase profits.

However, the existing site is congested, necessitating more space for an orderly expansion that will allow IOC to space out its new units .

IOC also has to consider safety options as sufficient space needs to be maintained between units given the inflammable nature of the products and high temperatures required for production.

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