Saturday, June 7, 2008
PCPIR project gains momentum
| IFC examining feasibility of various coastal roads |
KAKINADA: The Petroleum, Chemical and Petrochemical Investment Region (PCPIR) project proposed to be developed between Visakhapatnam and Kakinada, is gaining momentum with the feasibility of various coastal roads being examined by the International Finance Corporation (IFC).
Mammoth ventureThe IFC, which was recently appointed advisor of Infrastructure Corporation of Andhra Pradesh (INCAP) for the specific purpose of forging public-private partnerships for the project, is working out modalities of developing a combination of new and existing roads and connecting radial roads in the hinterland as a start-up to the State Government’s mammoth venture.
Prominent among the proposals is the road that links the seaports at Kakinada and Gangavaram in Visakhapatnam district (distance 138 km). It will be a six-lane road between Gangavaram port and Kakinada, which was originally estimated to cost Rs 1,937 crore.
A vast chunk of the expenditure is proposed to be borne by the Union Government in two phases.
Other PCPIR roads are: upgrading of State highways- No. 39 (Visakhapatnam - Anantagiri - Araku), No. 40 Kakinada - Rajahmundry via Samalkot, Bikkavolu, Anaparthi and Kadiam and No. 97 Yelamanchili - Gajuwaka, NH-214 [(Kathipudi - Razole - Kakinada - Narasapur - Pamarru (Krishna district)] and NH-214A [Digamarru (West Godavari district) - Narasapur - Machilipatnam - Challapalli - Avanigadda - Repalle - Bapatla - Chirala - Ongole].
Expanding the ADB Road (Kakinada port - NH-5) to four lanes and developing Kakinada bypass road are the other important components of the coastal road network which is an integral part of the PCPIR.
M/s Reliance Industries is in advanced stages of laying a link road in the PPP mode from Tallarevu to Gadimoga village, about 30 km from Kakinada, where it is constructing an on-shore terminal to receive gas extracted from the K-G basin.
The Vizag-Kakinada PCPIR is proposed to be developed in 250 sq. km (approximately 62,000 acres), comprising manufacturing facilities for the petrochemical industries, other logistical infrastructure and administrative and residential areas.
The PCPIR project also includes upgrading of Visakhapatnam and Rajahmundry airports, Visakhapatnam port and Kakinada deep water port, ‘logistic hubs’ containing inland container depots, container freight stations and warehouses, captive power plants and water supply schemes.
Another major component of PCPIR is the proposed refinery of Oil and Natural Gas Corporation Limited having a revised capacity of 15 mtpa and costing nearly Rs 25,000 crore. This project is still in the conceptual stage.
AP Coastal Corridor project gets in-principle nod from Centre
Hyderabad, May 29 The Union Government has agreed to support the Coastal Corridor project covering the districts of Srikakulam, Vizianagaram, Visakhapatnam and East Godavari District in the State.
“Officials from the Union Government were keen to know about the proposed Coastal Corridor such as the basic infrastructure, industries that are likely to come up in the region and connectivity issues and after our presentation, they gave an in-principle approval to the project,” Mr B Sam Bob, Principal Secretary, Industries and Commerce Department, Government of Andhra Pradesh, told Business Line. According to him, the Government will now look to develop a four or six-lane road parallel to the existing National Highway to support the port-based industries.
According to the initial plan, the Andhra Pradesh Government is looking at developing the 30-km road from Visakhapatnam to Gangavaram Port.
“The total distance that has been identified is 138 km, but we have been asked implement it in a phased manner. So, that is why, in the first phase, we are looking at completing the road from Visakhapatnam to Gangavaram port in the next two years,” Mr Bob said.
The total cost of the project, though not yet finalised, is estimated to be around Rs 5,500 crore and in the first phase, around Rs 1,100 crore has to be invested.
Mega hubs to change face of Industrial Landscape
With a focus on infrastructure, Andhra Pradesh, Gujarat, Karnataka, West Bengal, Orissa and Tamil Nadu are creating investment hubs that have the potential to collectively attract Rs 10 lakh crore in investments and create 43 lakh jobs in the next several years. Each of these investment hubs that span several hundreds of square kilometres will have urban utilities like housing complexes, cinema halls, schools and hospitals and major industries in oil, chemicals, petrochemicals and several downstream industries in their heart. The investments into external infrastructure like roads, sea ports, airports and railnetwork would be made by the union government while power to these massive industries would be provided by the state government.
Besides their own investments into utilities like hospitals and schools, the state governments will also strike partnership deals with builders and other private players to set up housing complexes and other facilities.
Industrial investments would come from state-run and private firms — domestic as well as global. Chemicals and fertilisers minister Paswan, whose ministry conceptualised these massive investment hubs, said that the first PCPIR is likely to come up in Andhra Pradesh, followed by one in Gujarat. Sources said the ambitious investment hub in Andhra Pradesh is likely to be notified in a couple of months.
In the 603.6 sq km petroleum, chemical and petrochemical investment region (PCPIR) traversing the Visakhapatnam-Kakinada region in Andhra Pradesh, the central government would pump in about Rs 5,974 crore to build roads, rail links, rail freight stations, airports and cargo complexes while the state would spend Rs 2,132 crore to provide mainly water and power supply, it is understood. A larger chunk of infrastructure investment of Rs 10,565 crore would come from private investors, as per the proposal the state government has prepared, it is learned.
Gujarat is expected to invest Rs 18,691 crore in infrastructure — including funds from central government and private players. Karnataka, which is creating a PCPIR in 250 sq km and anticipating an industrial investment of Rs 2.3 lakh crore, will spend Rs 10,147 crore in infrastructure. This includes contribution from the central government and private developers. Orissa, which will create a 284 sq km PCPIR, will get infrastructure investments of about Rs 15,273 crore from all the three sources. The Left-ruled West Bengal will have a total infrastructure investment of about Rs 25,750 crore, while Tamil Nadu will pump in Rs 6,189 crore.
The Andhra Pradesh PCPIR has the potential for industrial investments of Rs 3,43,000 crore while Gujarat has an investment commitment from private players as well as central and state governments of Rs 50,000 crore. The West Bengal PCPIR has the potential to attract industrial investment of about Rs 80,000 crore and the one proposed in Tamil Nadu has the potential for Rs 24,178 crore.
In Andhra Pradesh, global majors like Total SA of France, Mittal Energy Investments, GAIL India, Oil India and oil refining and marketing major Hindustan Petroleum Corp (HPCL) are expected to invest Rs 32,000 crore. This consortium will set up a 15 million tonnes a year (mtpa) refining-cum-petrochemical complex. Besides this, HPCL is expected invest another Rs 10,000 crore to double its existing 7.5 mtpa refining capacity in the region.
Public sector refining major Oil & Natural Gas Corp (ONGC) would invest Rs 31,000 crore to set up a refinery and polypropylene unit in Kakinada SEZ. The state government anticipates exports of Rs 58,000 crore a year and tax receipts of Rs 46,500 crore a year from this PCPIR, which is expected to account for 9% of the total value of goods and services produced in the state.
Creating sophisticated infrastructure across the country to facilitate industrial development may take time. The government’s idea, therefore, is to select regions in the coastal area, where port connectivity could be provided easily to such industrial hubs in addition to upgradation of other modes of transport. Removing the need for multiple clearances and providing infrastructure would remove the two major hurdles for industrial development.
The states that have moved PCPIR proposals have to create bodies similar to Noida set up by the Uttar Pradesh government, the final administrative step before investments could come in. The ministry of environment and forests is also understood to be working with the pollution control boards in these six states to ensure that environmental disturbance because of large scale industrialisation is kept to a minimum.
To give a big boost to India’s $8.8-billion petrochem industry, the government also came out with a policy that aims at encouraging local production, consumption and export of petrochemicals and plastics. Neighbouring China has a strong presence in plastics and enjoys a substantial share of the global footwear and toys market.
The government intends to promote use of plastics in areas like agriculture storage and water conveyance, and facilitate research on waste management technologies. The policy envisages steps to attract more investments in the sector and to enable the country to capture a larger slice of the Asian demand for polymers. To achieve this goal, the government would strive to provide natural gas — the feedstock — at globally competitive prices, create infrastructure and further rationalise tariffs and taxes.
The government also intends to assist modernising the downstream plastic processing industry to enhance its capacity and competitiveness. By 2011, the per capita consumption of plastic products and synthetic fibre is expected go up three-fold from the current 4 kg and 1.6 kg, respectively. A petrochemical technology upgradation fund, a plastic development council and a task force on petrochemical feedstock to suggest measures to ensure the availability of petrochemical feedstock at internationally competitive prices are in the making.
Source: Economic Times
Second PCPIR to pour Rs 50k cr in Gujarat
NEW DELHI: After Andhra Pradesh, it is Gujarat where massive oil, chemicals and petrochemicals investments will pour in. Chemicals and fertilizers minister Ram Vilas Paswan said on Tuesday that a proposal from Gujarat with an investment commitment from private players and central and state governments to the tune of Rs 50,000 crore is close to be cleared by a panel headed by Cabinet secretary.
This investment hub with an oil refining and petrochemical complex at its heart, will be surrounded by various downstream units in pharmaceuticals, chemicals and petrochemicals sectors. The Union government has asked for some more information from the state government, and the proposal is close to be approved. The hub is expected to create eight lakh jobs.
Once the approval is granted, the state government will notify 473 sq km as a petroleum, chemical and petrochemical investment region (PCPIR). While the central and state governments will invest Rs 18,691 crore to build infrastructure like ports, rail network and roads, the total investments in the region including from private players would touch about Rs 50,000 crore, Mr Paswan told reporters here.
The investments in Andhra Pradesh PCPIR is close to Rs 3.43 lakh crore. Four other states are working on similar schemes, said the minister. A senior official in the ministry explained that all these proposals would together attract investments to the tune of Rs 10 lakh crore.
The Orissa PCPIR has an investment potential of Rs 2,30,000 crore, while the West Bengal PCPIR has an investment potential of Rs 75,000-80,000 crore and the Tamil Nadu PCPIR has an investment potential of Rs 24,179 crore. In Andhra Pradesh, the PCPIR is expected to generate about 12 lakh jobs, while the Karnataka investment hub is expected to generate 6.34 lakh jobs.
Hitting out at pharmaceutical firms for complaining against drug price control, government today said the industry is still making huge profits and there was no threat of any company folding up.
“In a situation where the profit margins are as high as 200 % there is no possibility of any company closing its manufacturing business due to the price control mechanism of the government,” Union Minister for Chemical and Fertiliser Ram Vilas Paswan told reporters here.
Mr Paswan was replying to a query on the Indian Drug Manufacturers Association (IDMA) asking the government to revise the ceiling prices of 33 bulk drugs keeping in mind the appreciating dollar against rupee.
IDMA had written to the National Pharmaceutical Pricing Authority (NPPA) saying bulk drug manufacturers were not in a position to put up with uneconomic prices and they will have to stop the supplies of the same very soon. Paswan reiterated that the UPA government was bound by its commitments made in the common minimum programme and not “by any company or its profit”.
At a time when government introduced the price control mechanism for 74 drugs which constituted around 50 % of the domestic pharmaceutical market similar speculation were made which later proved wrong, he said. “That time also, there were speculation that it would ruin the industry but it didn’t happen,” Pawar said.
“Now price controlled medicines accounts for less than a quarter of the total pharma produce in the country and the speculations are bound to be prove wrong again,” he said.
This investment hub with an oil refining and petrochemical complex at its heart, will be surrounded by various downstream units in pharmaceuticals, chemicals and petrochemicals sectors. The Union government has asked for some more information from the state government, and the proposal is close to be approved. The hub is expected to create eight lakh jobs.
Once the approval is granted, the state government will notify 473 sq km as a petroleum, chemical and petrochemical investment region (PCPIR). While the central and state governments will invest Rs 18,691 crore to build infrastructure like ports, rail network and roads, the total investments in the region including from private players would touch about Rs 50,000 crore, Mr Paswan told reporters here.
The investments in Andhra Pradesh PCPIR is close to Rs 3.43 lakh crore. Four other states are working on similar schemes, said the minister. A senior official in the ministry explained that all these proposals would together attract investments to the tune of Rs 10 lakh crore.
The Orissa PCPIR has an investment potential of Rs 2,30,000 crore, while the West Bengal PCPIR has an investment potential of Rs 75,000-80,000 crore and the Tamil Nadu PCPIR has an investment potential of Rs 24,179 crore. In Andhra Pradesh, the PCPIR is expected to generate about 12 lakh jobs, while the Karnataka investment hub is expected to generate 6.34 lakh jobs.
Hitting out at pharmaceutical firms for complaining against drug price control, government today said the industry is still making huge profits and there was no threat of any company folding up.
“In a situation where the profit margins are as high as 200 % there is no possibility of any company closing its manufacturing business due to the price control mechanism of the government,” Union Minister for Chemical and Fertiliser Ram Vilas Paswan told reporters here.
Mr Paswan was replying to a query on the Indian Drug Manufacturers Association (IDMA) asking the government to revise the ceiling prices of 33 bulk drugs keeping in mind the appreciating dollar against rupee.
IDMA had written to the National Pharmaceutical Pricing Authority (NPPA) saying bulk drug manufacturers were not in a position to put up with uneconomic prices and they will have to stop the supplies of the same very soon. Paswan reiterated that the UPA government was bound by its commitments made in the common minimum programme and not “by any company or its profit”.
At a time when government introduced the price control mechanism for 74 drugs which constituted around 50 % of the domestic pharmaceutical market similar speculation were made which later proved wrong, he said. “That time also, there were speculation that it would ruin the industry but it didn’t happen,” Pawar said.
“Now price controlled medicines accounts for less than a quarter of the total pharma produce in the country and the speculations are bound to be prove wrong again,” he said.
Andhra proposes coastal highway to link petrochemical projects
New Delhi: The Andhra Pradesh government has asked the Centre to build a Rs3,300-crore coastal highway connecting Kakinada and Visakhapatnam to support the petroleum refineries it plans to build in the region.
Andhra Pradesh finance minister Rosaiah Konejeti confirmed the development on Tuesday. “The Centre has shown some interest in helping us,” he said.The state also wants the Union government to spend Rs2,700 crore to develop ports and extend railway lines to the area where a petroleum, chemicals and petrochemical investment (PCPRI) project is coming up.
The project is expected to attract investments of over Rs3 trillion.The proposed highway will help in transporting petroleum products. It may also be extended up to Chennai as a new express passenger corridor.
The Union and state governments will jointly develop infrastructure for the petroleum, chemical and petrochemical factories that will come up in the 603.58 sq. km area identified between Visakhapatnam and Kakinada.
Located close to the oil and gas-rich Krishna Godavari basin off India’s east coast, the PCPRI project is expected to cut business costs and ease operations for refiners, which will also enjoy a tax holiday.
The state government made its requests to the Centre earlier this week, an official familiar with the matter said.The state wants the Union govt to also spend Rs2,700 crore on developing ports, extending railway lines
The state government has told the Union government that the project will be developed through a special purpose vehicle, or SPV, it is setting up.“The Centre has in principle approved the proposal and we would shortly begin the project work,” said an official with Infrastructure Corp. of Andhra Pradesh, or Incap, who did not wish to be identified as he is not authorized to speak with the media.
Incap is the nodal agency for the road projects for the PCPRI project, including the coastal highway, while the Andhra Pradesh Industrial Infrastructure Corp. Ltd, or APIIC, is the nodal agency for the whole project.The official also said Washington-based International Finance Corporation, an arm of the World Bank, has offered project development services for the Kakinada-Visakhapatnam coastal highway project.
While the first phase of the coastal highway corridor project is proposed between Kakinada and Visakhapatnam, the next phase would be extended till Nellore along the coast, the official said.
The other road projects in the region would be taken up through the public-private-partnership model and the government will offer viability gap funding to support the private player, said the official.
He added the existing four-lane national highways will be widened to six lanes.Shipping and road transport secretary Brahm Dutt said the ministry has already received the requests from the Andhra Pradesh government to widen the two highways.“We are already working on these proposals. The proposal for the coastal highway is yet to reach us. Once it comes we will give all assistance. However, we do have some budgetary constraints,” he said.Source: Live Mint
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