The Hindu Business Line : AP to take up ONGC refinery issue with PM

The Andhra Pradesh Government has decided to talk to the Centre on the reported move by the Oil and Natural Gas Corporation (ONGC) to have a relook at its proposed Rs 5,500-crore greenfield refinery project in Kakinada.

The Chief Minister, Dr Y.S. Rajasekhara Reddy, said: "Eight-ten months ago the then ONGC Chairman, Mr Subir Raha, had signed an MoU with the State Government proposing the project and asked us to provide suitable land."

Project Affected

"There seems to be a management crisis in ONGC," Dr Reddy said, referring to the Corporation's decision to review the project now, after the State had done its groundwork. There has been a change at the helm at ONGC and the project is affected. This is not on, he told Business Line here today.

He will take up the matter with the Prime Minister, Dr Manmohan Singh, who is slated to visit the State tomorrow.

The MoU was signed in September last year by the representatives of the Andhra Pradesh Government and ONGC, MRPL, IL&FS and Kakinada Sea Ports Ltd for the creation of a special purpose vehicle. In addition to the refinery with a capacity of 7.5 million tonnes of crude oil a year, a Rs 1,500-crore investment was also proposed in a Special Economic Zone (SEZ), with a potential to go up to Rs 3,000 crore in Kakinada.

Mr Subir Raha, in the presence of the Chief Minister, had told newspersons that the 7.5-million-tonne capacity refinery project would achieve financial closure shortly and by November, work on the refinery would begin.

While the State, through the Andhra Pradesh Industrial Infrastructure Corporation would hold a token 3 per cent stake in the form of land, MRPL (26 per cent), ONGC (20 per cent), IL&FS (51 per cent) would be the other stakeholders in the Kakinada special economic zone. The refinery would be provided 1,000 acres and the SEZ 10,000 acres.

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