Panipat petrochem project will need 5,000 acres, says AT Kearney study
The proposed petrochemical hub at Panipat needs about 5,000 acres and would be developed in two phases spread over nine years according to a study requisitioned by the government.
The study by AT Kearney Limited stated “The proposed hub would be modeled on the lines of Jurong Park at Singapore and Jabel Ali Park at Dubai”. Official sources said, Haryana was upbeat about the project. While the policy on petroleum, chemicals and petrochemical investment regions is still in the making but the state government had approved acquisition of 5,000 acres for such a region in Panipat.
Acquisition of 1,500 acres for the first phase has already begun. The state has also notified incentive packages for downstream industries that will come up in the zone. These include interest-free loans and exemption from local area development tax and entry tax for raw material, feedstock and capital goods, among others. Rebate will be given on land purchase and duty paid on electricity consumed in the petrochemical hub will be waived.
About 941 acres has already been notified under Section 4 for the project and award for about 470 acres is likely to be announced soon. With the Haryana State Industrial Development Corporation (HSIIDC) Board approving the formation of a special purpose vehicle (SPV)and Indian Oil Corporation Limited(IOCL) slated to take a decision in the near future, the project is expected to take off in a big way.
The project cost has been estimated at Rs 3,730 crore generating employment for 38,000 persons directly and many more indirectly. The hub is expected to house about 470 units which would bring in an investment of about Rs 13,000 crore. It would attract units in the field of films and packaging, filament yarn, polyester staple fibre, pet chips manufacturing, poly-butadiene rubber, woven sacks and master batches.In the feasibility report, the consultant said Rs 2,500-2,800 crore will have to be invested over the next 5-10 years for developing the region which will anchor IOC’s Panipat refinery. It will be developed by a SPV formed by IOC, the HSIIDC and private developers.
The state would also have another project called Dadri-Panipat pipeline at a cost of Rs 250.66 crores which is likely to be commissioned by January 2009. Another project in the pipeline is augmentation of Mundra-Panipat crude oil pipeline at a cost of Rs 204.74 crores which is likely to be commissioned by December 2008.
Last month the board of directors of Haryana State Industrial and Infrastructure Development Corporation which met here approved the incorporation of SPV for implementing the proposed petrochemical hub project in Panipat. “This would be the largest investment by the corporation at any single location so far in the country,”HSIIDC sources told FE. The SPV is to be incorporated jointly by HSIIDC and IOCL, with 50:50 shareholding.
An MoU between the IOC and the HSIIDC had been signed last year in this connection. HSIIDC sources said, “The project is likely to attract investment in a number of ancillary units like blow-moulding, injection moulding, film and pipe production and the multiplier impact thereof would generate an overall investment of Rs 25,000 crore to 28,000 crore in the state.”