The Ministry of Chemicals and Fertilisers will present a proposal for setting up a Petroleum, Chemicals and Petrochemicals Investment Region near Cuddalore in two weeks.
Interacting with journalists on the sidelines of a conference on construction chemicals organised here by the Federation of Indian Chambers of Commerce and Industry, Mr Jose Cyriac, Secretary, Department of Chemicals and petrochemicals, said that the Cuddalore PCPIR proposal has reached a stage where it could be presented to the Cabinet for approval. After the Cabinet approves it, Government of India would sanction the project, whereupon various agencies from the central and state governments would swing into action.
The only operational PCPIR in India is in Gujarat. The Centre has given its sanction to PCPIRs in three other States – Haldia (West Bengal), Paradeep (Orissa) and Visakhapatnam (Andhra Pradesh). Tamil Nadu's proposal is under consideration.Government of India does not provide any funds or incentives, except for meeting out viability gaps in projects. However, if a road or a railway line has to be built, it would allocate funds for the projects out of the budget.
Spread over a 250 sq. km area around Cuddalore, the project will become a chemical and petrochemical hub. Officials of the Tamil Nadu government had previously told Business Line that the project envisaged total infrastructure spending of Rs 16,725 crore. Mr Cyriac said that the Tamil Nadu Government has asked Centre to upgrade two local roads to national highways for access to the region. New Delhi has agreed to doing two of the three and the third is under consideration. It is learnt that the Cuddalore PCPIR has attracted investment enquiries, worth close to Rs 100,000 crore.
Govt funding needed
While the present PCPIR scheme envisages no funding by the central government, “this need to be corrected,” Mr Cyriac said. Where there are common facilities required, such as common effluent treatment plants, or preparation of master plan, the government should provide financial support, he said.
Mr Cyriac also observed that a basic weakness of the scheme was the commitment of the anchor tenant. What if the tenant withdraws his project, is the question the government is trying to address. For the Cuddalore PCPIR, however, there is no “anchor tenant” issue – Nagarjuna Oil, which is putting up a 6 million-tonne refinery, will be the big investor.
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