Tuesday June 19, 02:18 AM
Cabinet likely to decide Rs 18k-crore Bathinda refinery's fate on June 21
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By Charanjit Ahuja
A Cabinet sub-committee is meeting on June 21, to consider Punjab chief minister's request to accord approval to proposed Rs 18,919 crore Guru Gobind Singh Refinery Limited at Bathinda touted to be "single largest investment in a project in Punjab since Independence". Sources in the chief minister's office (CMO) told FE here on Monday that the meeting of the Cabinet sub-committee is a sequel to the meeting of the Foreign Investment Promotion Board (FIPB) on June 8, which had raised objections to the proposal of Laxmi Mittal, an NRI and a steel baron to take 49% equity in the Rs 18,919 crore refinery. The FIPB at its meeting had refused to allow 49% equity participation by Laxmi Mittal in the project which is to be jointly set up by Guru Gobind Singh Refineries Limited (GGSRL), a specially created 100% subsidiary of the Hindustan Petroleum Corporation Limited (HPCL). The FIPB refused permission as the current guidelines on public sector units (PSU) refineries do not allow more than 26% equity participation in such projects. The FIPB had observed at the meeting that "Punjab's case could be considered as a special case and the Cabinet sub-committee on Economic Affairs could consider Mittal's equity proposal". Following the development, the Punjab chief minister, Parkash Singh Badal spoke to the Prime Minister, Manmohan Singh and urged for his intervention in the interest of the state as this was going to be largest ever investment in a single project in the state. Sources in the CMO told FE that the proposed refinery project of 9 MMTPA and 152 mw power generation was expecting its financial closure by March 2008. The Mittals and the Hindustan Petroleum Corporation Limited (HPCL) were likely to contribute Rs 971 crore within this fiscal in the project. However, a total of Rs 6,000 crore would come to this project this year as both joint venture partners would pool in Rs 3,000 crore each. The State Bank of India Capital Markets have been appointed financial advisors for this project and to raise funds for this project which would be routed through an escrow account.
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