Amaravati: Kakinada Petrochemicals Complex hangs in the balance
Centre washes off its hands over VGF
Amaravati: Yet another promise of the Centre incorporated in the AP Reorganization Act, 2014 has gone up in smoke now. This time around, it is in the case of Kakinada Petrochemicals Complex.
Andhra Pradesh has been particular about the project since the very beginning but there has always been a lukewarm response from the Centre.
Pointing out the same, Leader of the YSRC Parliamentary Party V Vijaisai Reddy raised the issue in the Rajya Sabha seeking to know the status of the same due to lack of Viability Gap Funding (VGF). He also sought to know whether the Centre had explored other options through which the project could be made viable without any VGF.
Union Minister of Petroleum and Natural Gas Hardeep Singh Puri, in his written reply on Monday, told the Rajya Sabha that a feasibility study had been conducted and AP had requested the Centre to fund the Viability Gap of the capital intensive project that required huge amounts of investment.
He said "the proposed project shall have a direct, indirect and induced impact on the economy of AP which shall, besides industrialization, result in substantial increase in income, output, employment and tax earning in the State. Accordingly, the State government may take appropriate decisions on the issue in the overall interest of the State".
This is tantamount to throwing the ball into the AP court and asking it to take a call.
The State government, GAIL and Hindustan Petroleum Corporation Limited (HPCL) signed an MoU on January 27, 2017 for the complex with an estimated cost of Rs 32,901 core at Kakinada. Oil Public Sector Undertakings (PSUs) had indicated to the State government that Viability Gap Funding was necessary to make the project viable.
So, it is now the State government's call as the Centre has washed its hands off the VGF issue!