Kakinada coast is known for having hydrocarbon reserves

andhrapradesh |  Suryaa Desk  | Published : Mon, Jun 11, 2018, 04:07 PM

Snapping of ties between the TDP and the BJP seemed to have an adverse impact on the proposed petrochemical project in Kakinada.

Public sector majors Gas Authority of India Limited (GAIL) and the Hindustan Petroleum Corporation Limited (HPCL) together with the State government had entered into a Memorandum of Understanding (MoU) to establish the ?37,000 crore project of the 1.5 million tonne ethylene derivative plant.

The project is expected to provide direct employment to 1,000 and indirect jobs to about 30,000 people. Since the Kakinada coast is known for having hydrocarbon reserves and oil and gas infrastructure, it has become the obvious choice for the promoters and to the State government as well.The MoU was signed in the presence of Chief Minister N. Chandrababu Naidu at the second round of Sunrise Andhra Pradesh Investment Meet held in Visakhapatnam in January last. Subsequently, the East Godavari district administration has earmarked 2,000 acres of land in the Kakinada Special Economic Zone (KSEZ) for the major project.

Though the works are supposed to have been commenced long back, no such activity is visible at the project site and all the officials concerned remained tight-lipped.However, it is Mr. Naidu who has broached the issue during the recent ‘Nava Nirmana Deeksha’ public meeting held at Amalapuram and accused the Centre of stopping the establishment of the major project in the Kakinada coast. “The Centre is reluctant to release ?5,500 crore towards the petrochemical project and asking the State to foot the bill. When they are taking away the oil and natural gas from the State, why can’t they pay the sum to ensure the establishment of the project?” he has asked.

Besides allocating the site for the complex, the East Godavari district administration has also agreed in principle to allocate 150 acres for the construction of a township for the employees of the complex and another 100 acres for developing import, reserve and dispatch facilities for raw materials such as ethane and propane.

According to the reliable sources, the promoters have gone for a preliminary financial appraisal, in which they have come to know that the internal rate of return from the proposed project is much lesser than the minimum rate.Viability Gap Funding to the tune of about ?5,500 crore is said to be the solution to clear the issue, for which Mr. Naidu sought the Petroleum Ministry’ support in February this year and got a negative response.

“Why can’t the Centre fund the petrochemical complex, which has been mandated under the Andhra Pradeh Reorganisation Act? The Centre must fund the project,” the Chief Minister has made it clear in the public meeting.








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