Financial Daily from THE HINDU group of publications
Tuesday, Jan 20, 2004
Financial Daily from THE HINDU group of publications Tuesday, Jan 20, 2004 |
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Corporate
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Courts/Legal Issues SC gives go-ahead to Essar Oil project Our Bureau
Ahmedabad , Jan 19 THE Supreme Court on Monday directed that Essar Oil Ltd's (EOL) Vadinar refinery project could continue with all the environmental clearances that had been granted by the Central and State Governments. The two-judge Bench, comprising Mrs Justice Ruma Pal and Mr Justice Mr B N Srikrishna, has directed the Gujarat Government to grant formal authorisation within a fortnight. The special leave petition filed by EOL was against the Gujarat High Court division bench order of July 2000 which was passed in a public interest litigation filed by the Halar Utkarsh Samiti wherein the clearances granted for laying pipelines under Sections 29 and 33 of the Wildlife Protection Act, 1972 through the marine National Park and Sanctuary were cancelled. Though the PIL was filed against the proposed Vadinar-Bina crude pipeline of Bharat Oman Refineries Ltd (BORL), the latter was exempted from the applicability of the judgement. Instead, it was the EOL's refinery that was put under the dock as the Gujarat High Court was told by the Gujarat Government that the other such permission that was pending under Sections 29 and 33 of the Wildlife Protection Act was in the case of the Essar refinery. It was this submission by the Gujarat Government that EOL had questioned by moving a review petition before the Gujarat High Court as the company claimed that it had already procured all the necessary clearances to lay the pipeline in the MNP and Sanctuary area and, therefore, there was nothing pending. However, the Gujarat High Court had rejected the review petition with the observation, "...The grievance raised in these applications is based on some factual controversy between the applicants and the State of Gujarat. So far as review is concerned, the grievance is beyond the scope of the review". Thereafter, EOL moved the Supreme Court as the Gujarat High Court order had ensured that no work by the company would be permitted either in the MNP or the Sanctuary area. It was EOL's contention that it merited at least the same consideration as BORL, with the company having already made an investment of Rs 5,300 crore and achieved 64 per cent project completion. It was some five years ago that another such PIL filed by Gujarat Navodaya Mandal had created hurdles for Reliance Petroleum Refinery in laying their pipeline through the same route as the one currently proposed by EOL. At that time, the PIL had questioned the legality of the permission granted by the State Government under Sections 29 and 35 of the Wildlife Protection Act to lay the pipeline through notified areas. Now with the last of the hurdles before EOL removed, the work at the 10.5 million tpa refinery, which is to be scaled up to 12 million tpa, and pegged to cost Rs 9,800 crore, is set to commence in earnest by February-March. The company had sorted out its financial woes only a few months ago after it went in for a corporate debt restructuring programme whereby the project interest cost was scaled down to some 12 per cent from the original rate of 16 per cent. As per the new formula, the promoters are to raise Rs 311 crore while the EPC contractor, ABB is to bring in Rs 905 crore and debt-equity ratio has been fixed at 2.26:1.
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