Union minister of petroleum and natural gas, Hardeep Singh Puri on Tuesday said that Rajasthan’s equity in the Barmer oil refinery may reduce by 10% as the state’s stand isn’t clear on sharing the increased project cost.
At present, the state has 26% of equity in the refinery.
The Union minister, who inspected the progress of the HPCL Rajasthan Refinery Limited (HRRL), said: “We had asked the Rajasthan government to bear the additional cost of the project. The cost increased due to the delay because of the Covid-19 pandemic. But the state does not seem to be ready to bear the cost and respond to the ministry’s demand.”
He added that the Union government is ready to take over the additional cost of the project but it will reduce the state equity. “At present, the state government has 26% equity in this project but in this situation, if the Rajasthan government does not bear the increased project cost, then their equity will be reduced by 10%,” he told reporters at the refinery complex in Pachpadra, Barmer.
The Greenfield Refinery cum Petrochemical Complex at Barmer is being set up by HRRL of Hindustan Petroleum Corporation Limited (HPCL) and the government of Rajasthan (GOR) having a stake of 74% and 26%, respectively.
Puri said the project was planned to be completed by December 2022 but it got delayed due to the Covid-19 pandemic. He said the refinery will be functional by January 2024. “Due to the delay, the project cost has gone up,” he said.
Without naming chief minister Ashok Gehlot, he said that some people are making baseless statements and accusing the Union government for not releasing funds on time. “From March 2021 till date, there has been a 45% price hike in steel, while the exchange rate has also increased by 15%. The prices of other materials such as cement have also gone up,” he said.
Gehlot, time and again, has blamed the Centre for delaying the project work, which in turn increased the project cost.
Puri said that in August 2021, the Centre had asked the Rajasthan government to bear the additional cost of the project. The Rajasthan government had also done an independent analysis on the increased project cost. “We had asked the Rajasthan government in August 2021, but till date, Rajasthan’s stand is not clear whether they would bear the additional cost or not. But our position is clear. We have taken a decision that if the state government is not ready to bear the additional cost for any reason, we are quite happy to take over the additional financial burden but in that situation, their equity, which is presently 26%, will be diluted and reduced to 16%,” Puri said.
He informed that more than 60% of the project has been completed despite the severe setback faced during two years of the pandemic.
The Union minister further informed that the HRRL refinery complex will process nine MMTPA of crude and produce more than 2.4 million tons of petrochemicals which will reduce import bill on account of petrochemicals. This project will act as an anchor industry for the industrial hub not only for western Rajasthan, but will also steer India to its vision of achieving 450 MMTPA refining capacity by 2030, he said.
Congress spokesperson RC Choudhary said it is the Gehlot government which is taking the construction of refinery on war footing. The project cost was ₹40,000 crore but escalated to ₹70,000 crore, all happened as previous chief minister Vasundhara Raje stalled the project for four years. He added that the statement of Puri is politically motivated.
