Raje move on Barmer refinery fuels economic boom hopes
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Raje move on Barmer refinery fuels economic boom hopes

Earlier this month, chief minister Raje announced in the assembly that the government will sign a fresh MoU with HPCL for setting up the refinery

jaipur Updated: Apr 19, 2017 21:02 IST
Manoj Ahuja
Manoj Ahuja
Hindustan Times
The proposed site for HPCL refinery in Barmer district of Rajasthan.(Manoj Ahuja/HT Photo)

In a small, air-cooled office of Punaram Nagana, the owner of a hotel on NH 25, a group of villagers is animatedly discussing the recent developments on the delayed HPCL refinery. With most of them having invested in property in and around Pachpadra, the site of the proposed refinery in Barmer district, the stakes are high.

Four years ago, when the state government first announced the project, the solitary hotel at Pachpadra was a meeting point for property brokers and people interested in buying a piece of land.

“The property prices have soared more than 10 times ever since the government announced the project four years ago,” Nagana told HT.

However, with the project facing delays, many investors have lost their shirt. “The token system, in which people bought property at exorbitant rates by giving some money upfront, has ruined many. With project facing delays, many people could not resell the land and forfeited the token money,” he said.

In March 2013, the then Congress-led Rajasthan government had signed an agreement with HPCL (Hindustan Petroleum Corporation Ltd) for setting up a 9-million-tonne refinery-cum-petrochemical complex in Thar desert near the oil discovery made by Cairn India. After coming to power the same year, the Vasundhara Raje government put the project on hold citing undue financial burden.

Earlier this month, chief minister Raje announced in the assembly that the government will sign a fresh MoU with HPCL for setting up the refinery.

This time around, euphoria has been replaced by caution. “We will wait and watch whether the work starts on the ground,” said Shriram Godre, former pradhan of Balhotra. The site measuring 12,500 bigha reserved by the state government at Pachpadra is a barren land dotted with illegal salt mines.

In the past decade, Barmer’s rural economy has been transformed by two big energy projects – a 1,080 MW thermal power plant operated by a subsidiary of JSW Energy, and Cairn Energy’s Mangala, Bhagyam and Aishwariya oilfields.

The projects led to a spurt in ancillary industries and entrepreneurship, with residents investing in hotels and transport fleets. The real estate bubble created tremendous liquidity in the surrounding villages that, until recently, bartered goods in times of drought.

With another mega project with an investment of more than ₹37,000 crore about to take off, there is hope of another economic boom.

“It’s a big project so a lot of development will take place. Small ancillary industries, hotels, and transport business will flourish that will generate a lot of direct and indirect employment for the local population,” said industrialist Roop Chand Salecha, the managing director of Balotra Water Pollution Control and Treatment Pvt Ltd.

Balhotra, 12km from Pachpadra, is a major textile hub with an annual turnover of ₹10,000 crore.

“This time, the project looks more likely to take off as the government seemed to have resolved the earlier issues that had become the bone of contention,” said industrialist Ramakishan Garg, owner of a textile unit in Balhotra.

The residents have seen a similar transformation in Barmer, about 100 km from Balhotra, when Cairn Energy had set up its oilfields in 2008.

Luxury cars and SUVs replaced jeeps, hotels and home stays mushroomed, cabs became popular in the town where travelling in an auto was a sign of opulence, and real estate prices broke records.

With crude oil prices falling sharply in 2014, the dream run came to a halt. Cairn downsized its workforce and private businesses dwindled.

“We expect a similar transformation in the region on the line of the economic boom in Mathura and other places where big refineries have been set up,” Salecha said.

The Rajasthan government has renegotiated with HPCL and brought down the viability gap funding (VGF) from ₹3,736 crore to ₹1,123 crore, which is to be paid over five years. A new MoU is expected to be signed in the next few weeks.

People in the region are keeping their fingers crossed. “I am waiting for the work to start on the ground before I start construction work to expand the hotel,” Nagana said.


The 9-million-tonne HPCL refinery-cum-petrochemical complex project has been hanging fire for four years

Land prices in Pachpadra have shot up from ₹25,000 to ₹4-5 lakh per bigha in last four years

The downside is that many people have lost their money in land speculation

Earlier this month, chief minister Vasundhara Raje announced that the government will soon sign another MoU with HPCL

Ancillary industries, hotels, and transport business are expected to flourish once the refinery comes up

First Published: Apr 14, 2017 19:48 IST