Clearing the uncertainties over the future of Paradip oil refinery, Orissa government and the Indian Oil Corporation today signed an MoU for establishment of this nine million tonne refinery project by 2009-10. | |
| "All issues concerning the project have been settled. We will be starting work very soon," said MS Ramachandran, chairman, IOC soon after the signing of MoU. |
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| He informed that the cost of the project, which was originally estimated at Rs 8,270 crore has been brought down to Rs 7,500 crore through redesigning. Redesigning relates to changing the product mix from more of diesel to more of petrol. |
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| He said, the company has already spent about Rs 500 crore on preliminary work at the project site and it intends to invest another Rs 620 crore soon for construction of crude terminal and Single Point Mooring (SPM) system to be located about 20 km offshore near Paradip. |
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| Refuting suggestions that the signing of MoU was a pre-poll stunt as the project was hanging fire for a long time, Ramachandran said there was no political reason behind it. |
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| The project was in a limbo following withdrawal of tax concession by the state government. Now with the government restoring the tax sops we have decided to go ahead with the venture, he said. |
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| In its new avtaar, the project is scheduled to be completed by 2009-10. However, depending on favourable market conditions of petroleum products, Indian Oil will make efforts for early completion of the project by 2008-09, he said. |
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| It may be noted that though the foundation stone of the project was laid by the Prime Minister, A B Vajpayee in May 2000, and its was originally slated to go on stream in 2004. |
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| However, the venture ran into rough weather following withdrawal of certain tax concessions to it by the state government, in protest against which IOC stopped work at the site after some preliminary investment. |
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| The issue was resolved after the state cabinet last week approved tax concession to the tune of Rs 6666 crore to the proposed oil refinery, thus paving the way for signing of MoU. |
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| Bowing to the demands of IOC, the cabinet decided to grant sales tax deferment facility to IOC for a period of 11 years. The sales tax dues will be treated as an interest free loan repayable from the 12th year of the commencement of production. |
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| Similarly the project has been exempted from payment of Central sales tax, octroi, entry tax levied on machineries and other equipment procured for the venture, electricity duty, royalty on sands and other duties whose combined worth is about Rs 2254 crore. The deferment of sales tax for the refinery alone will amount to Rs 4412 crore. |
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| The refinery is expected to provide direct employment to nearly 4000 persons while the downstream industries will employ 5000 people more, the chairman claimed. |
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| J Rath, general manager of the project, J Rath said that a mega downstream petrochemical plant would be set up at the sight after the completion of the refinery. But he did not give details of the proposed petrochemical plant. |
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