Delhi notifies policy to incentivise medical oxygen production, transportation
The government order, which provides for subsidies and tax reimbursements to private firms, was issued on Thursday.
The Delhi government has notified the Medical Oxygen Production Promotion Policy 2021 that seeks to incentivise private enterprises to invest in the production, transportation and storage of medical oxygen to make the national capital self-reliant in the production of medical oxygen.
The government order, which provides for subsidies and tax reimbursements to private firms, was issued on Thursday. HT has reviewed a copy of the notification. The policy, drafted after Delhi faced a severe crisis of medical oxygen during the fourth wave of the Covid-19 pandemic in April this year, was approved by the Delhi Cabinet on August 3.
The notification said the policy was designed to ensure that the city is better equipped to manage the situation if a similar crisis reoccurs.
Requests for the subsidy and incentives will, however, need to be made within 15 days from the date of notification. If the government does not get enough applications to set up the targeted oxygen capacity in Delhi - it hasn’t put a number to it - it will reopen the window to apply for the incentives the following month.
The government hopes the policy to encourage firms to set up new manufacturing enterprises and expanding the production capacity of existing ones for “uninterrupted oxygen supply” to hospitals and nursing homes and “facilitate storage and transportation of medical oxygen in Delhi”.
The policy covers liquid oxygen (LOX) manufacturing facilities of a minimum of 50 MT (metric tonnes) capacity up to a total of 100 MT, non-captive oxygen generation plants of a minimum of 10 MT and a maximum 50 MT capacity up to a total of 100 MT; captive oxygen generation plants of minimum 500 LPM (litres per-minute) capacity at hospitals and nursing homes to cater to their peak demand for medical oxygen up to a total capacity of 200 MT; acquisition of cryogenic tankers of minimum capacity of 10 MT to exclusively ferry liquid medical oxygen up to a total capacity of 500 MT; and to set up of liquid medical oxygen storage tanks of minimum 10 MT capacity up to a total capacity of 1000 MT.
The policy covers pressure swing adsorption plants (PSA) as well as those using the air separation unit (ASU) technology.
The policy allows for a ₹20 lakh subsidy per metric tonne capacity for liquid oxygen manufacturing plants, non-captive cryogenic plants and PSA plants for hospitals and nursing homes, ₹3 lakh subsidy per metric-tonne capacity of cryogenic tankers; and a one-time subsidy of ₹1 lakh per metric-tonne for liquid medical oxygen storage for hospitals, nursing homes and re-fillers.
Private firms hoping to get the financial incentives under the policy would, however, have to adhere to the deadlines for each category.
The liquid oxygen plants will have to be commissioned by 31 December 2022 to avail the incentives; non-captive cryogenic plants by 31 March 2022; PSA plants for hospitals and nursing homes have to be commissioned by 31 December 2021, cryogenic tankers have to be registered in Delhi by 31 December 2021 and liquid storage facilities for hospitals, nursing homes and re-fillers have to be in place by the end of this year, said the notification.
Establishments that set up the oxygen plants will also get power supply for running the plants at a subsidised rate of ₹4 per unit for the first five years and reimbursement of the gross State GST paid for liquid oxygen generation plants and non-captive oxygen generation plants (PSA/ASU) within a month of the plant’s commissioning.
Stamp duty paid for the purchase of land for medical oxygen generation plants or non-captive oxygen generation plants will also be reimbursed. Enterprises that avail the incentives have to ensure that they operate for at least five years.