Panipat refinery expansion hits Chautala roadblock

Vol 5, PW 13 (15 Aug 01) People & Policy

"You understand us, we understand you, so why do you worry" Famous parting words spoken by Haryana chief minister Om Prakash Chautala to Indian Oil chairman M.

A Pathan as the two shook hands in Chandigarh on 4th July. Pathan was leading an IOC delegation to Chandigarh to remove hurdles to a planned doubling of capacity at the Panipat refinery to12m t/y.

IOC is getting desperate at delays in the Panipat expansion project, which won environmental clearance in April. Behind the delay is Haryana's unwillingness to drop its 'Local Area Development Tax' for crude and other refinery inputs.

IOC reckons the tax would cost it an extra Rs263cr ($55.75m) a year, making expansion unviable. IOC also wants sales tax concessions.

Chautala's words have set alarm bells ringing within IOC. What did he really mean On 18th July IOC made a slide presentation to junior oil minister Santosh Gangwar on the Panipat expansion, and narrated Chautala's parting words.

Gangwar promised help and called up Chautala to intercede, but Petrowatch learns the "file" continues to gather dust. IOC has now begun to hit out at the Haryana government through "friendly" journalists.

Local reports claim Haryana will lose Rs11,000cr ($2.3bn) because IOC has decided to abandon the Panipat expansion. Even parliament is worried and on 7th August Naik was forced to answer questions on Panipat from worried MPs.