NEW DELHI, Dec 21? Both the Gas Authority of India Limited (GAIL) and Oil and Natural Gas Corporation (ONGC) are in the race for the mega gas cracker project and the two oil giants have been given three months to submit feasibility report to the Centre, a Parliamentary Panel has been told. The Central Government has come under increasing pressure to implement the mega gas cracker project, with a Parliamentary Standing Committee on Ministry of Chemicals and Fertilizers expressing its disappointment at the inordinate delay. It has asked the Department of Chemicals and Petrochemicals to give a concrete shape to the project and report back to it.
A report submitted here today, was critical of the government inaction. ?The Committee is constraint to note that even today the government is not serious about implementation of the Project,? it commented. The Project is being inordinately delayed resulting in high increase in subsidy and cost of establishment of the Project. Going through the efforts made by the Government till date it seems that the Government was not sincere in its commitment made to the north eastern people under the Assam Accord to give boost to the developmental activities in the area, the Panel remarked.
Assam gas cracker project was proposed in 1984 but it continues to be in limbo even after lapse of 20 years, due to non-availability of feedstock, acquirement of land by Reliance Assam Petrochemical Limited, finalisation of gas supply agreement by Indian Oil Corporation. In its Action Taken reply, the Ministry stated that there was a large amount of subsidy involved in the implementation of the Project and the Project might be implemented by some PSUs.
Both the Gas Authority of India Limited (GAIL) and Oil and Natural Gas Corporation Limited (ONGC) have showed interest in the project and a period of three months was given to both the companies to prepare their feasibility reports. On the expiry of the period the Secretary Petroleum and Natural Gas would hold another meeting to finalise the lead player for the project.
The Ministry, in this connection, has further stated that after Ministry of P&NG had finalised the lead player for the Project and worked out the Project parameters, as well as the financial implications of various elements of subsidy, a meeting would be held at the level of Secretary Chemical and Petrochemicals to give a fresh final shape to the matter for decision of the Government, the Committee was told.
The Committee, in its earlier report, had suggested that the feasibility of implementing the project through public sector undertakings, such as Gas Authority of India (GAIL) should be explored seriously and with a sense of urgency and they should be apprised of the concrete steps taken by the Ministry within one month of presentation of the Report. The gas cracker project was to be commissioned for production of 3 lakh tonne per annum (TPA) of ethylene according to terms and conditions of Assam Accord to boost development activities in the State. Later on a committee under the chairmanship of Secretary, Chemicals and Petrochemicals reduced the production of ethylene to a level of 2 lakh TPA according to associated availability of gas.
Oil India Limited (OIL) was to supply 1.35 lakh MMSCMD and ONGC to supply of 1.35 MMSCMD of gas for the project. The agreement between ONGC and RAPL to supply feedstock was pending because RAPL contented that 5 MMSCMD of gas was sufficient for 1,30,000 tonne of ethylene per annum. However, with supply of 1.35 MMSCMD of gas to be supplied by ONGC, RAPL would produce only 28,000 tonne of ethylene per annum for the first five years and 15,000 tonnes of ethylene per annum for the remaining 10 years.
The shortfall in production from two lakh TPA of ethylene is the bone of contention between RAPL and Government for which LPG was proposed to be supplied by Indian Oil Corporation (IOC) and the price and subsidy on LPG was to be approved by the Government. The subsidy of Rs 6,000 crore over a period of 15 years was required to be reimbursed to the oil companies for supplying feedstock at the concessional rate of Rs 600 per thousand cubic meters.