The Telegraph
Since 1st March, 1999
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Six states bid for oil hubs

New Delhi/Calcutta, May 8: Six states have submitted expressions of interest for PCPIRs, which are proposed production hubs comprising petro-chemical, chemical and petroleum units.

The states that are interested in these hubs are Orissa, Karnataka, Tamil Nadu, Maharashtra, Gujarat and Andhra Pradesh, Union chemicals minister Ram Vilas Paswan said while unveiling the petroleum, chemicals and petrochemicals investment region (PCPIR) policy.

Paswan said the first PCPIR would be set up by the end of this financial year. He expects $15-20 billion of investments in a PCPIR.

A senior official said the Centre was willing to consider applications from more states for such investment regions.

Bengal, which is keen on a PCPIR in Haldia, is yet to submit an expression of interest. The state even chose Indian Oil as the anchor investor.

Bengal commerce and industry secretary Sabyasachi Sen today told The Telegraph that the state was yet to submit a proposal.

“But it is also true that we will apply soon. We are building a consensus,” he said.

The minimum area for a PCPIR will be 250 square kilometres and the units there will produce both for the domestic and the export markets.

The proposed hubs will have production units, public utilities and residential buildings. They will also have their own administrative services and provide logistic support. The PCPIRs will also have their own environmental protection mechanisms.

The manufacturing zone will comprise 40 per cent of the area.

Bengal is planning a PCPIR around Haldia as there are many chemicals and petro-chemical units in the region, such as Haldia Petrochemicals, Mitsubishi PTA and Indian Oil.

The Salim Group of Indonesia has proposed a chemical and multi-product SEZ in the Haldia region. Bengal had picked Indian Oil as the anchor investor for the proposed chemical SEZ.

However, the disturbances in Nandigram, the proposed site for the chemical SEZ, have forced the state to look for another site.

Sen said around 5,000-7,000 acres were available in Haldia whereas the minimum requirement for the investment region was 25,000 acres.

He said an SEZ enjoys fiscal incentives unlike the investment region.

“We have to have an SEZ in a PCPIR since the latter does not come with fiscal incentive. If we don’t have an SEZ, investors will go to other PCPIRs,” Sen said.

The investment regions may include one or more SEZs, industrial parks, free trade and warehousing zones, export-oriented units or growth centres duly notified under the relevant central or state legislation policy.

“Each PCPIR will have a refinery or a petrochemical feedstock company as an anchor tenant,” Paswan said.

The Centre will ensure the availability of external physical infrastructure, including rail and road links, ports, airports and telecommunications. This infrastructure will be created or upgraded largely through public-private partnerships.

The state government will be responsible for infrastructure facilities such as power, water, sewerage and health safety.

The department of chemicals and petrochemicals will be the nodal agency for the PCPIRs.

A high-powered committee set by the government will scrutinise the applications for the investment regions and subsequently monitor and expedite the progress of implementation. A management board constituted by the government will be responsible for the development of the PCPIR.

Keeping past experiences in mind, Paswan made it clear land needed for PCPIRs would be bought directly by an investor from land-owners.

Paswan said, petrochemicals is a promising area and it contributed to over 20 per cent of the total chemical sector output.

“The future outlook for the industry is bright with positive developments in various chemical sub sectors,” he said.

The PCPIR policy will help in reaping benefits of integrated petroleum, chemical and petrochem complexes. These regions will provide excellent infrastructure for the sector to become globally competitive,” the minister said.

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