Privatisation force BPCL to halt work on ₹11,130-crore polyol plant in Kochi

P Manoj MUMBAI | Updated on January 19, 2021

Bharat Petroleum Corporation Ltd (BPCL) has put on hold a planned specialty petrochemicals plant for producing polyols at its Kochi refinery as the state-run firm prefer to wait for the outcome of the privatisation process currently underway before proceeding on the ₹11,130 crore project.

The project is to be built on 170 acres of land adjoining the refinery that was acquired by BPCL from FACT Ltd, also a central PSU. It was put in motion in January 2019.

But, after completing land levelling work for erecting the plant, BPCL halted the construction of a road underpass to link the project site with the refinery, sources in Kochi refinery said.

The process of selecting a licensor for sourcing technology for the polyol plant has also been frozen.

“All project related activities have come to a stop. The BPCL management feels that given the huge investment involved, it would be appropriate to move ahead with the project only with the consent of the private owner of the company following strategic disinvestment,” sources said.

The uncertainty surrounding the polyol plant has cast a shadow over the petrochemical park planned by the Kerala government where small industries will manufacture products utilising niche/speciality petro-chemicals sourced from the polyol plant and the Propylene Derivatives Petrochemical Project (PDPP).

The PDPP, built by BPCL with an investment of ₹5,246 crore, is expected to be commissioned by February end.

“The petrochemical park is a big project for the development of the state with potential to create more than one lakh jobs,” a Kerala government official said.

“If the Kochi refinery is privatised, it will adversely impact the fate of the petrochemical park being planned by the State government,” siad the Kerala Chief Minister P Vijayan at the state assembly on Monday.

“There is growing concern that the polyol project and the over 25,000 crore petrochemical park planned by the Kerala government utilising products from the PDPP and polyol project will not become a reality with the privatisation of BPCL. The impact of privatisation of BPCL on Kerala’s development will be huge,” said S Sharma, member of legislative assembly representing Vypeen constituency, during a calling attention motion moved by him on the privatisation of BPCL on Monday.

Other projects

The centre’s decision to transfer 170 acres of land belonging to FACT to BPCL with the approval of Kerala government for building the polyol plant, has also come under criticism as the land will pass on to private hands following disinvestment.

“This will defeat the purpose for which the land was acquired by the Kerala government and transferred to FACT. This land was given on the condition that it should be used for the sole purpose of development of FACT,” the Kerala government official said. “If the purpose of land use change and is given to a private entity, it requires permission from the Kerala government,” the state government official said.

BPCL has also halted work on a skill development centre for training students passing out of the ITI at Ettumanoor near Kochi.

The state had offered eight acres of land at ITI for centre that planned to train 1,500 students a year.

“BPCL has pulled out the officers who were overseeing the project, amidst indications that it is no longer keen on proceeding with the project,” the source said.

BPCL is the biggest Central PSU operating in Kerala and it should not be privatised in the interests of development of the state, the Kerala government official said.

“No project in BPCL Kochi refinery has been shelved. All our projects are being implemented and we are committed to the capex for FY21. There has been some delay in few projects due to the COVID-19 pandemic. Some of our projects require visit of foreign licensors to our refinery to undertake technological/ inspection work, which they are unable to do so due to travel restrictions,” said BPCL, without going into the specifics of a detailed query sent by BusinessLine.

Published on January 19, 2021

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