Working group formed for establishing cracker complex at Kakinada
Engineers India Limited and SBI Caps asked to rework the financials
The Ministry of Petroleum and Natural Gas has constituted a working group under the chairmanship of Joint Secretary (Refineries) for establishing a petrochemical cracker complex at Kakinada in the wake of discussions between Union Minister for Petroleum and Natural Gas Dharmendra Pradhan and Industries Minister Mekapati Goutham Reddy in New Delhi on Wednesday.
According to an official release, the Ministry advised Engineers India Limited and SBI Caps to rework the financials in view of the recent regulatory changes in corporate tax and interest rates in order to take the strategic project forward.
The Indian Oil Corporation or Hindustan Petroleum Corporation was supposed to examine the feasibility of a greenfield crude oil refinery and petrochemical complex in the State within six months from the appointed day in compliance with Section.93(4) of the Andhra Pradesh (AP) Reorganisation Act, 2014.
Accordingly, the HPCL-GAIL consortium carried out the feasibility of setting up a 1 MMTPA cracker complex at Kakinada with an investment of ₹32,900 crore and sought the Andhra Pradesh government’s support in the form of Viability Gap Funding (VGF).
Mr. Goutham Reddy expressed the opinion that the project would become viable without any VGF due to a reduction in corporate tax and a worldwide dip in interest rates and asserted that the cracker complex would be a major contributor to the Prime Minister’s vision of a $5 trillion economy.
Mr. Pradhan promised to extend all support for the establishment of the project. Ministry Secretary Tarun Kapoor and Andhra Pradesh Chief Secretary Aditya Nath Das and Special Chief Secretary (Industries and Commerce) R. Karikal Valaven were present in the deliberations.