NEW DELHI, Dec 9 ? Asserting that his Ministry?s heart was with Assam on the gas cracker project, Minister of Petroleum and Natural Gas (MoP&NG), Mani Shanker Aiyar struck a positive note claiming that the Project was back on track.
Participating in a Question Hour discussion in the Lok Sabha here this morning, Sri Aiyar said that his Ministry was actively pursuing the Project. The Minister said that delay in execution of the Project was owing to great differences in margin. The lenders need to get adequate return on investments to reach a comfort level.
The MoP&NG recently convened a meeting of lenders to ascertain what is the bottom line and the lenders made some suggestions. ?On the basis of their suggestion, the Ministry has written to the Assam Government and we are still waiting for their reply,? Aiyar said.
Meanwhile, sources said that the Assam Government has already replied back to the MoP&NG partially conceding to the demands for additional incentives sought by Gas Authority of India Limited (GAIL). The Assam Government has reportedly suggested that the gas cracker project be set up in joint venture between Assam Industrial Development Corporation (AIDC) and GAIL.
The State Government also wants the cost of land, which it is to provide for the proposed Project, to be treated as its equity share. The 2 lakh tonne per annum ethylene producing gas cracker project was estimated to cost Rs 3,700 crore. The State Government, which is also mulling additional tax benefits and other incentives, have to first cancel the Letter of Intent (LoI) given to Reliance Industries Limited (RIL). The State Government-owned AIDC has had set up a joint venture Reliance Assam Petrochemical Limited (RAPL) to implement the project.
Meanwhile, according to sources the Engineers India Limited (EIL) has submitted a preliminary report on viability of the project to GAIL, favouring the setting up of the project. GAIL had engaged EIL to study the economic viability of the project following a request by the MoP&NG.
Meanwhile, raising the issue during the Question Hour, Dr Arun Kumar Sarma wanted to know whether the ONGC has any perspective plan to utilise the gas produced in Assam, pointing out that oil was first discovered in the State in the country. He further said that even as gas continued to being flared up in the State, several power projects and the gas cracker projects were suffering on account of deficit in gas supply.
In response, the Minister said that though ONGC was producing gas it does not use it directly. Request for utilisation of the gas has to come from the State Government and entrepreneurs. If such a request comes the ONGC would be happy to supply the gas, he claimed. Both the Oil India Limited (OIL) and the ONGC are trying to increase the quantity of gas production in the region.