A Mega Petroleum refinery and a Petro chemical complex will come up at the
South Andhra Pradesh Port town of Kakinada soon,it was officially announced
here after the central and state govt officials had a round of talks in the
national capital on June 16
A working group to
conduct feasibility study
A working group has been constituted under the Chairmanship of Joint
Secretary (Refineries), Ministry of Petroleum and Natural Gas with the
Government of Andhra Pradesh officials to conduct a feasibility study within
six months for establishing a greenfield crude oil refinery and petrochemical
complex at Kakinada in Andhra Pradesh
A delegation led by Andhra Pradesh Industries Minister Mekapati Gautham
Reddy met with Union Petroleum Minister Dharmendra Pradhan in Delhi requesting the Centre to expedite a
feasibility study to set up a petrochemical complex in Kakinada.
This project was
provided for in the AP Reorganisation Act, 2014
This project was provided for in the AP Reorganisation Act, 2014, which
enabled the creation of Telangana State by carving out a portion of then
unified Andhra Pradesh.
The Industries Minister and Aditya Nath Das, Chief Secretary and a State
official delegation held a detailed discussion with the Union Minister and
Tarun Kapoor, Secretary, Ministry of Petroleum and Natural Gas, on the issue of
establishing a Petrochemical Cracker Complex in Andhra Pradesh by HPCL-GAIL
This development is in line with the provisions of Section 93(4) of AP
Reorganisation Act, 2014, wherein it is provided that IOC or HPCL shall, within
six months from the appointed day, examine the feasibility of establishing a
greenfield crude oil refinery and petrochemical complex in Andhra Pradesh.
Accordingly, the feasibility for establishing 1 Million Metric tons per
annum cracker complex at Kakinada with an investment of Rs.32,900 crore by the
consortium HPCL-GAIL has been carried out and Andhra Pradesh government was to
have supported in terms of Viability Gap Funding for the project.
With the Government
reducing the Corporate Tax and interest rates the project viable without
viability gap funding
However, with the Government reducing the Corporate Tax and interest rates
coming down, the Cracker & Petroleum complex project would perhaps become
viable without any viability gap funding to be provided by the Andhra Pradesh
It was also decided to take an early decision with Engineers India Limited
and SBI Caps advised to rework the financials in view of the changes in
Corporate Tax and interest rates to take forward the project.
The state Chief Minister YS Jagan Mohan Reddy recently met with Pradhan and
requested the support of GoI to take forward the project without the State’s
Viability Gap Funding support. The Union Minister responded positively and
promised to extend all support in taking forward the project.