Kakinada Petro Complex may gather steam

Visakhapatnam: THE Kakinada Petro Complex is expected to gather steam with the Centre and the State Government deciding in principle to evolve a working mechanism to share viability gap funding (VGF) of Rs 975 crore for 15 years.

The project envisaged by Hindustan Petroleum Corporation Ltd and Gas Authority of India Ltd for a one million capacity complex at an estimated cost of Rs 32,900 crore at Kakinada Special Economic Zone before bifurcation of undivided Andhra Pradesh hit a roadblock since 2014. Post-bifurcation the Centre insisted the State to arrange viability gap funding.

Five days after the visit of CM YS Jagan Mohan Reddy, Industries and Commerce Minister Mekapati Goutham Reddy led a delegation to New Delhi and gave a detailed presentation to Union Minister for Petrochemical, Chemicals and Steel Dharmendra Pradhan on Wednesday. Reddy said later that the outcome was very positive and they would evolve a joint working mechanism on how to meet the viability gap funding to ground the project without further delay. Huge oil reserves have been found in Krishna-Godavari basin due to which the Centre sees good returns for investments in petrochemicals in Andhra Pradesh. Reddy said not only petro complexes, the State has bright scope to attract investments in downstream and ancillary units like polymer manufacturing as well as value added products by using molasses and ethanol.

The ambitious project, which is expected to provide job opportunities to thousands, also forms part of AP Reorganisation Act, 2014. Reddy was accompanied by Chief Secretary AN Das and Special Chief Secretary (Industries) R Karikal Valaven. Originally the project was contemplated as part of Visakhapatnam-Kakinada Petroleum, Chemical and Petrochemical Region (PCPIR). Following environmental concerns and Centre's decision to reorient PCPIR Policy, there was no progress on the project. As per the draft master plan of PCPIR, an investment of Rs 3.43 lakh crore was mooted.