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Plan for SEZ-like mega petro zones

PM's proposal to allocate vast tracts of land for petrochemical industries may come through, reports KA Badarinath.

india Updated: Nov 09, 2006 02:29 IST

Prime Minister Manmohan Singh's proposal to allocate vast tracts of land for setting up large petroleum, chemicals and petrochemical industries may finally come through.

On Thursday, the Cabinet Committee on Economic Affairs will announce a policy by which areas ranging between 200 and 250 sq km each will be set aside for this purpose. Similar to special economic zones (SEZs), these investment regions will, however, be on a much larger scale — somewhat like those set up in the Pudong region in China, in Houston in the United States, in Rotterdam in the Netherlands, in Belgium and in Thailand.

The idea was first mooted by top US-based chief executives of major multinational companies in the hydrocarbon industry during Singh's visit to Washington DC last year.

The policy, outlining the fiscal incentives and other norms governing these regions, will be based on the recommendations of the task force headed by TKA Nair, the prime minister's principal secretary.

Initially seven such regions are likely to be allowed based on the recommendations of the state governments. These will be in Haldia (West Bengal), Vishakapatnam (Andhra Pradesh), Dahej (Gujarat), Mangalore (Karnataka), Paradip (Orissa), Kundli-Panipat (Haryana) and south coastal Mumbai or Ratnagiri (Maharashtra).

The PMO will directly monitor the work progress in these investment regions.

"These investment regions with integrated infrastructure are intended to enhance and promote exports, and provide additional employment opportunities in the manufacturing sector," said a senior official in Commerce Ministry on condition of anonymity.

A source close to the Commerce Ministry said all those states interested in setting up such sector-specific "large investment regions to promote the petrochemicals sector" would have to send in their proposals to "the nodal department of chemicals and petrochemicals".

The proposals from different states will be vetted by a panel of secretaries headed by Nair.

The source said the fiscal-incentives package for those setting up these investment regions would be similar to internationally accepted norms in countries like China and the US. A 15-year tax holiday and big customs, excise and service tax concessions may be announced for these regions.

Also, several sector-specific SEZs can be subsumed into these mega investment regions if they are specific to just petroleum, chemicals and petrochemicals.


First Published: Nov 09, 2006 02:29 IST