Industrially backward Assam is all set for a major leap, with Prime Minister Manmohan Singh on Monday laying the foundation stone of a whopping Rs 54 billion integrated petrochemical project.
Popularly referred to as Assam Gas Cracker Project but renamed the Brahmaputra Cracker and Polymers Ltd, it is to be implemented by the Gas Authority of India Ltd (GAIL) with 70 per cent equity participation in five years.
The remaining 30 per cent equity would be shared equally among Oil India Ltd (OIL), Numaligarh Refinery Ltd (NRL) and the Assam government. The mega project is being set up at Lepetkata in eastern Assam's Dibrugarh district, about 520 km from Guwahati.
The prime minister, during his two-day visit, would also lay the foundation of a second bridge over the Brahmaputra near Guwahati.
"We hope nearly 100,000 people would get employment opportunities, directly or indirectly, as a result of investments in downstream plastic processing industries and allied activities," Assam Industry and Commerce Minister Pradyut Bordoloi said.
According to preliminary estimates, at least 500 plastic processing industries are likely to come up in the region when this project becomes operational.
The feedstock for the petrochemical project, natural gas and naphtha, is to be provided by OIL, ONGC and the NRL.
"We are already promoting a plastic park in the area and the project would surely help turnaround the economy of Assam," the minister said.
The petrochemical complex would comprise a cracker unit, downstream polymer and integrated off-site utilities plants.
The products from the proposed project would be 220,000 tonnes of polythene, 60,000 tonnes of polypropylene, 55,000 tonnes of raw pyrolysis gasoline and 12,500 tonnes of fuel oil per year.
As part of Assam government's aggressive policy to give a fillip to industrial activities, it has agreed to grant exemption from entry tax on capital goods, works contract tax during the construction period, sales tax and VAT on feedstock for 15 years from the date of commencement of production.
The Assam Gas Cracker Project was proposed as a part of the implementation of the historic Assam Accord signed in 1985.
The project had been gathering dust since 1991 - when the central government issued the Letter of Intent (LOI) to the Assam Industrial Development Corp (AIDC), an Assam government undertaking.
In February 1997, the LOI was transferred to Reliance Assam Petrochemicals Ltd (RAPL), a joint venture company of Assam Industrial Development Corp and Reliance Industries Ltd.
RAPL was granted various concessions by the government for implementation of the project.
But the deal with RAPL was shelved in 2005 with Reliance virtually backing out of the project citing technical reasons like non-availability of sufficient feedstock.