Patnaik lobbies for shelved IOC refinery at Paradeep

Vol 5, PW 25 (13 Feb 02) Midstream & Downstream

ORISSA CHIEF MINISTER Naveen Patnaik is a vocal champion of Indian Oil's shelved 9m t/y refinery project at Paradeep.

A foundation stone for the project was laid in May 2000, scheduled for completion by March 2003, but work hasn't even started. In a letter to oil minister Ram Naik, Patnaik writes in fractured English: "The pace of progress of work do not convince that the project can come up within the scheduled time.

I understood that financial closure of the project has not yet been made." He demands: "I would solicit your kind intervention in the matter so that the project can go on-stream." A letter from a state chief minister receives top priority in Delhi's corridors of power so bureaucrats were drafted to prepare a reply. IOCchairman Mohammad Pathan agreed that the project had been delayed by 18 months but argued this was because Orissa had withdrawn tax breaks and concessions announced after the project was approved in 1999, making it unviable.

Pathan admits these incentives were partly restored last year "on vigorous pursuing with the Orissa government" but were only made public in the last week of September. "We are pursuing with (Orissa government) departments concerned for issuance of necessary administrative orders." Paradeep was discussed by Indian Oil's Investment Review Committee on 15th December but was not on the agenda for the 31st January board of directors meeting.

Why "Paradeep is on the shelf," reveals a source. " IOC will bring it on the agenda only when it wants to."