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Pratim Ranjan Bose

Kolkata , April 28

AFTER a lapse of 10 years, Bharat Petroleum Corporation Ltd (BPCL) has begun the groundwork for the six-million-tonne Bina Refinery once again. The company has appointed Engineers India Ltd (EIL) for a cost estimate and a detailed process configuration study.

The reports are expected by next month-end. The proposed refinery project originally promoted through Bharat Oman Refineries Ltd has undergone a cost escalation from Rs 5,277 crore (in 1995) to Rs 6,354 crore (2001).

Conceived in 1995, the project is now scheduled to be commissioned by April 2009.

Sources said that the project would now undergo some changes in the process configuration as BPCL has invested in a lubricants base oil-manufacturing unit at Mumbai. The unit was originally designed to be a part of Bina.

Expecting finalisation of the project later this year, the BPCL sources said despite the delay the project cost might not undergo much of an increase as some components (like base oil production) have been dropped.

Having begun work on the tendering process, the company is considering breaking up the project into components instead of opting for the single turnkey contract route.

Meanwhile, the much-awaited agreement with the Madhya Pradesh Government on fiscal benefits granted to the project, is expected to be signed next month. The Government has cleared the roadblocks for the project by announcing deferment of commercial tax of Rs 250 crore per year.

The concession will be available for a period of 15 years from the year of commercial production. It has also expressed an interest in picking up a stake in the project to the extent of the market value of land given at a concessional rate to the refinery.

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