Bathinda refinery: Cash-starved govt yet to keep Rs 250-cr promise
Hailed as the state’s biggest business project, the Guru Gobind Singh Oil Refinery at Bathinda may have been inaugurated amid much pomp and show on April 28, but the Punjab government is still to contribute the first Rs 250-crore instalment of an interest-free loan it has promised for the refinery.Updated: May 20, 2012 11:13 IST
Hailed as the state’s biggest business project, the Guru Gobind Singh Oil Refinery at Bathinda may have been inaugurated amid much pomp and show on April 28, but the Punjab government is still to contribute the first Rs 250-crore instalment of an interest-free loan it has promised for the refinery.
As per the deed of assurance signed between the state government and the Hindustan Petroleum Corporation-Mittal Energy Limited (HMEL) joint venture, the state is to pay Rs 250 crore to the refinery each year for five years. The HMEL is then stipulated to return the amount in the same manner starting a year after the disbursement of the last instalment.
Sources told HT that delay in loan disbursement could affect the import of crude oil by the refinery, which has an output capacity of 1.8 lakh barrels a day. The HMEL has also taken loan of Rs 10,500 crore from various financial institutions, and the default on payment by the state could make it harder for the company to pay interest on these loans.
Though officials of the state industry and commerce department and the HMEL refused to come on record, sources said there have been several verbal and written communications made to the Punjab government by the HMEL, but to little avail. Even during the project’s screening committee meeting, headed by Punjab chief secretary Rakesh Singh, last Wednesday, officials failed to take a decision on the payment.
The HMEL officials, who preferred anonymity, termed the state’s alleged reasoning – that the refinery has not begun to manufacture all 12 products it promised before claiming the first instalment – as false and flimsy.
They claimed that the required documents, including sale invoices, had been submitted to prove that production of all 12 products, including polypropylene, pet coke, aviation turbine fuel, hexane, Naphtha, mineral turpentine oil, motor spirit, kerosene oil, liquefied petroleum gas and various high-speed diesel products, has begun.
The HMEL officials further said that though the refinery began operations in September 2011, the first commercial product was sold in the market in the form of kerosene oil on December 3. Hence, the refinery was entitled for the payment, they told HT.
When contacted, industry and commerce minister Anil Joshi expressed surprise. “I don’t know why the officials of the Punjab government and the HMEL have not brought it to my notice yet. I will find out the reason behind the delay, as the refinery is a matter of prestige for Punjab,” he said.
About two years ago, the Panjab University Business School had conducted a study that concluded that once fully operational, the refinery would directly or indirectly cater to nearly 123 services.
It said the project would generate an income of nearly Rs 7,000 crore a year from various services, and the resultant tax could fetch nearly Rs 700 crore a year to the state.
First Published: May 20, 2012 11:10 IST