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Cairn India, which is awaiting regulatory approval to step up production, is unable to extend the $1.1-billion (Rs 5,000 crore) crude pipeline to coastal Gujarat, due to local opposition.. Extending the pipeline would have opened up wider marketing opportunities for Barmer crude.
The work for the terminal 70 km pipeline from Salaya to the mooring facility at Bhogat, both in Jamnagar district of Gujarat, has ground to a halt, due to local opposition. According to available information, the project is now running 6-8 months behind the scheduled deadline of December 2010.
Mr Vikram Maadam, Congress MP from Jamnagar, has accused the State of “gross irregularities” and being “unfair” to the land losers of 18 villages of Kalyaynpur and Khambhalia talukas of Jamnagar district. “I have demanded that all farmers be paid fair compensation,” he told Business Line accusing Cairn of using force to pave the way for the acquisition process.
The agitation has resulted in the district authorities forming a “redressal committee.”Cairn has laid 590 km pipeline from Barmer to Salaya and is catering to Gujarat based refineries. It was scheduled to complete the residual work at an estimated investment of Rs 1,000 crore to cater to other refineries through sea freight.
In two separate communications addressed to the Minister of Petroleum and Natural Gas, Mr Jaipal Reddy, and the Gujarat Chief Minister, Mr Narendra Modi, on March 11, Cairn top management sought government “intervention to execute the project”.
“We are facing various obstructions created by local politician in Jamnagar district. As a result, the project is now facing a delay of about six months,” the letters informed. Sources told Business Line that responding to the plea Mr Reddy has agreed to meet the Cairn officials on March 16.
Meanwhile, Gujarat's Industry Minister, Mr Saurabh Patel, accused the Congress leadership in Jamnagar of “creating hindrances in the development of a project of national importance”. According to Mr Patel, the project was part of the investments promised by Cairn during the Vibrant Gujarat summit.
When contacted, a Cairn spokesperson said: “Cairn India strictly adheres to the business ethics in all its areas of operation.”
On the land acquisition, the company said that the entire RoU (right of usage) process is being managed and controlled by the State Government's revenue officer who is nominated by the state government and appointed by the Centre as ‘competent Authority.
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