IOCL may take up 49% equity in Idco's Paradip plastic park project

Indian Oil Corporation Ltd (IOCL) might pick up a 49 per cent equity stake in the special purpose vehicle (SPV) formed by the state government controlled Odisha Industrial Infrastructure Development Corporation (Idco) for the plastic park project proposed at Paradip.

"We have taken the approval of the state government that IOCL will be taking up 49 per cent equity in the plastic park and Idco will have 51 per cent stake. We will be signing a pact formally with the IOCL", said an Idco official.

Recently, the state industries department had asked Idco to obtain the concurrence from IOCL for holding 49 per cent equity in the Paradip Plastic Parks Ltd along with their intention to incentivise the units in the park by offering the feedstock to the investors at a concessional rate as has been done by Nalco for the Aluminium Park.

A memorandum of understanding (MoU) was signed between IOCL and Idco at the 'Petrochemicals Investor Conclave 2017' held in November where the former had agreed on to join the JV as an equity partner.

"We had signed a MoU that we will be picking up equity in the park. We have not given any commitment as such, we are examining it", said an IOCL official.

The plastic park is proposed over 120 acres of land and will be built at a cost of Rs 1.06 billion. The proposed park has already received a grant-in aid of Rs 400 million from the central government.

The development of the park is in full swing and after completion, the park would host more than 100 MSME (micro, small & medium enterprises) polymer units with an employment potential for over 10,000 people.

The land prices will come down for the units that will be housed in the park once the IOCL comes on board and invests in equity, said the official, adding Idco have also sought grant from the state government.

According to the official, the land prices are now pegged at Rs 7.9 million per acre.