The re-worked Barmer refinery deal between state-owned Hindustan Petroleum Corp (HPCL) and Rajasthan government will save the state Rs 40,000 crore, oil minister Dharmendra Pradhan today said in a press conference.
“The earlier Internal Rate of Return (IRR) from the project was six per cent as compared to 12 per cent now,” Pradhan said, adding that the new MoU will bring down the state’s financial burden from Rs 56,000 crore to about Rs 16,000 crore, saving the exchequer about Rs 40,000 crore compared to the previous MoU signed by the Ashok Gehlot-led Congress government in 2013.
The ministry said in a separate statement the refinery will create indirect employment for 40,000 persons at the peak of its construction and direct employment for 1,000 persons.
Pradhan also responded to former Rajasthan CM Ashok Ghelot’s criticism over PM Modi’s re-laying of foundation stone for Barmer refinery slated for 16 January. “The then Congress-led government laid the foundation stone a few days before the model code of conduct came into force clearly indicating that the whole proposal and the deal was a political stunt to influence electorates. Also, no land, environmental or feasibility reports were prepared before laying the foundation stone.”
Responding to allegations by the Congress over Vasundhara Raje-led BJP government stalling the project after winning the Rajasthan elections, the minister clarified, “Vasundhara Raje had repeatedly pointed out how the conditions of previous deal between Ashok Ghelot-led government and HPCL was unfavourable for the state. The reason for the delay was we had to come out with a new deal which would benefit both the state government and HPCL.”
According to the oil minister, the revised MoU includes a Viability Gap Funding (VGF) of Rs 1,123 crore for 15 years as opposed to the earlier deal where the Congress-led government had agreed on a VGF of Rs 3,736 crore for 15 years.
The minister explained that the 9 Million Tonne per Annum (MMTPA) Barmer refinery will be the country’s first greenfield integrated refinery with a petrochemical complex and will produce BS-VI compliant fuel and will be operational by 2022-23.
He added that 2.5 Million Tonne of crude will be procured from Barmer oil fields operated by Vedanta’s Cairn Oil and Gas and the rest 6.5 MT of crude requirement will be met through international crude imports and other domestic sources carried through a pipeline from the Gujarat coast.
The project, envisaged to process the crude oil production from the Barmer basin, has reportedly overshot its cost from the original Rs 37,000 crore to Rs 43,129 crore due to a change in the specifications of the refinery. In the changed deal, the state’s equity in the project remains the same at 26 per cent. Read More