Work On Haldia Petro Begins On Oct 12
Although the financial institutions are yet to open the letter of guarantee for a deferred payment assurance of Rs 520 crore, senior state officials expressed optimism that it will come this month. Toyo engineers are gearing up to begin work as the promoters have pledged a downpayment of Rs 100 crore, which is close to 10 per cent of the promoters' equity of Rs 1,010 crore. Promoters of the project are the Tatas, the Chatterjee- Soros Fund and the West Bengal Industrial Development Corporation.
Work on the project, which had earlier been written off by sceptics as an impossible venture and ran into all sorts of problems through its chequered history of 19 years from conception to implementation, was scheduled to begin on July 1. The deferred payment guarantee (DPG) then got held up as there was a Rs 140 crore gap in the deferred payment guarantee amount. The Industrial Credit & Investment Corporation of India and the Industrial Finance Corporation of India agreed to pay Rs 100 crore each, instead of Rs 170 crore each as originally envisaged.
The Industrial Development Bank of India leads the consortium of financial institutions and will pay a guarantee of Rs 180 crore.
To bridge the gap, the project promoters had approached a consortium of commercial banks, led by the State Bank of India, which agreed to do the honours as well as to provide loans. The participation of the commercial banks was facilitated by the recent ruling by the RBI which raised banks' borrowing limit from Rs 500 crore to Rs 1,000 crore.
Haldia Petro is believed to have shortlisted six Indian companies and is negotiating with them to set up a captive power plant on a build-own-operate basis. Sources say the Industrial Development Bank of India had wanted more transparency before extending its guarantee.
Top corporates including the Reliance group, the RPG group and the Tata group (the present partners of the West Bengal government in the ambitious project) have evinced interest in the Haldia project during the long period it has spent in the pipeline.