State to sign fresh MoU with IndianOil for DPC
New Delhi   22-Jul-2013

Expressing concern over the delay in execution of refinery and petrochemicals complex at Paradip by Indian Oil Corporation Ltd (IOCL), the Odisha government has decided to sign a fresh memorandum of understanding (MoU) with the company to fix a firm timeline to set up the downstream petrochemicals project.

“The company is already four years behind schedule in commissioning the refinery project. Also, they had earlier given a commitment to set up a downstream petrochemicals complex (DPC) which was supposed to be anchor tenant for the PCPIR ((petroleum, chemicals and petrochemicals investment region). It appears that they have not given any firm timeline,” said a note sheet of Water Resource department signed by Chief Minister Naveen Patnaik, who is also the Minister of the department.

“It will be appropriate to renegotiate a fresh MoU fixing firm timelines for the DPC project after which the water allocation may be considered,” said the Chief Minister in the note sheet directing the Industry department to take necessary action in the matter.

Meanwhile, the Industry department has asked the IPICOL to take early steps for preparation of fresh MoU to be signed with IndianOil as per the orders of the Odisha Government.

While the implementation of PCPIR in the state is on the slow lane, IndianOil, the anchor tenant for the project had committed to set up a 15 million tonne refinery and petrochemicals complex at Paradip at an estimated cost of Rs 55,000 crore. But the oil marketing major is understood to have put the petrochemicals complex on the back burner, seemingly jeopardizing investments to the PCPIR region.

Besides, it is yet to sign a memorandum of understanding (MoU) with the state government. The signing of the pact between IndianOil and the state government is key to attracting investments from petrochemicals sectors.

The PCPIR project in the state would be set up on 284.15 sq km (70,214 acres) of land spread over Jagatsinghpur and Kendrapara districts. The PCPIR hub is expected to attract investments to the tune of Rs 2.74 lakh crore.

Of the expected overall investment figure of Rs 2.74 lakh crore, the lion’s share would come from the petroleum and petrochemicals sectors at Rs 2.3 lakh crore followed by housing and allied infrastructure at Rs 23,500 crore, external infrastructure at Rs 13,634 crore and Rs 3,500 crore each for chemicals & fertilizers and ancillary sectors.

The mega project is set to create employment for 648,000 people which includes direct employment for 227,000 people and indirect employment for 441,000 others.