August 31, 2001,
New Delhi, August 30
Alarm bells have rung once again in respect of the Guru Gobind Singh refinery. This is particularly so because one of the policy options for consideration at the meeting of the National Development Council (NDC) on Saturday pertains to “slowing down of at least new grassroot refining capacity in view of excess capacity.”
This has led to apprehension that the Planning Commission and the Prime Minister’s Office might be in favour of putting a cap on new grassroots refinery, contrary to the line of thinking in the Ministry of Petroleum and Natural Gas.
Punjab Chief Minister Parkash Singh Badal is facing a serious roadblock for the second time in as many years in industrialising the sensitive border state. He is seized of the matter and is rushing here tomorrow evening to take up the matter with Prime Minister Atal Behari Vajpayee, who will chair the meeting of the NDC.
While opposing any move at the NDC to go slow or backpedal on the Bathinda refinery, Mr Badal is also expected to write a strong letter to the Prime Minister, expressing serious concern about the machinations of vested interests in trying to scuttle the project. The people of Punjab had commended the Prime Minister for sanctioning the refinery, the first of its kind in the state, in the hope that it will usher an industrial revolution.
Mr Vajpayee laid the foundation stone for the Bathinda project in November, 1998. The Bathinda project being implemented by Hindustan Petroleum Corporation Limited (HPCL) from its own financial resources has already suffered delays. Nevertheless, work on the refinery project at Bathinda is in full swing, according to the HPCL. The company has already spent more than Rs 120 crore and made commitments to the tune of Rs 1200 crore for 2001-2002. The link road between NH-64 and the project site spread over 2000 acres is nearing completion. A captive canal for supplying fresh water to the project site is nearing completion.
The Ministry of Petroleum and Natural Gas has impressed upon the NDC to reject the policy option of “slowing down new grassroot refining capacity.” It argued that such a move will adversely affect the progress of the PSU grassroot refineries which have already been approved by the Union Government and are under implementation. These are the Punjab Refinery at Bathinda, Punjab, Central India Refinery at Bina, Madhya Pradesh and East Coast Refinery at Paradeep, Orissa.
The ministry said two private sector grassroot refineries are coming up at Jamnagar, Gujarat, and Cuddalore in Tamil Nadu. “Slowing down of the private sector projects cannot be done by the Union Government. Hence the government should continue to adopt a uniform policy for both the public and private sectors.”
Further, the ministry observed that the Union Government should not opt for a policy of slowing down any PSU grassroot refinery being put up as it will be “against the policy and negatively discriminate public sector to the advantage of the private sector, including foreign companies.” Besides, the three PSU grassroot refineries projects at Bathinda, Bina and Paradeep “are not new projects, but planned more than five years back and included as part of the Ninth Five Year Plan for completion in the Ninth/Tenth Plan periods.”
Petroleum experts said that considering the strategic nature of the industry, it is in national interest not to have large concentration of refining capacity in one location. Even the existing capacity of the two refineries — Reliance’s 27 MMTPA and Essar’s 10.5 MMTPA — is vulnerable. Industrial activity involving large capital outlays leads to economic development of the area. Therefore, such activities must be evenly distributed across the country for even development of the economy of various states and regions.
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