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A delegation led by Andhra Pradesh Industries Minister Mekapati Gautham Reddy met with Union Petroleum Minister Dharmendra Pradhan in Delhi today requesting the Centre to expedite a feasibility study to set up a petrochemical complex in Kakinada.
This project was provided for in the AP Reorganisation Act, 2014, which enabled the creation of Telangana State by carving out a portion of then unified Andhra Pradesh..
The Industries Minister and Aditya Nath Das, Chief Secretary and a State official delegation held a detailed discussion with the Union Minister and Tarun Kapoor, Secretary, Ministry of Petroleum and Natural Gas, on the issue of establishing a Petrochemical Cracker Complex in Andhra Pradesh by HPCL-GAIL consortium.
A working group has been constituted under the Chairmanship of Joint Secretary (Refineries), Ministry of Petroleum and Natural Gas with the GoAP officials to conduct a feasibility within six months for establishing a greenfield crude oil refinery and petrochemical complex at Kakinada in Andhra Pradesh.
It was also decided to take an early decision with Engineers India Limited and SBI Caps advised to re-work the financials in view of the changes in Corporate Tax and interest rates to take forward the project.
This development is in line with the provisions of Section 93(4) of AP Reorganisation Act, 2014, wherein it is provided that IOC or HPCL shall, within six months from the appointed day, examine the feasibility of establishing a greenfield crude oil refinery and petrochemical complex in Andhra Pradesh.
Accordingly, the feasibility for establishing 1 MMTPA cracker complex at Kakinada with an investment of ₹32,900 crore by the consortium HPCL-GAIL has been carried out and Andhra Pradesh government was to have supported in terms of Viability Gap Funding for the project. However, with the Government reducing the Corporate Tax and interest rates coming down, the Cracker & Petroleum complex project would perhaps become viable without any viability gap funding.
AP Chief Minister YS Jagan Mohan Reddy recently met with Pradhan and requested the support of GoI to take forward the project without the State’s VGF support.
The Union Minister responded positively and promised to extend all support in taking forward the project.
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