The Haryana State Infrastructure and Industrial Development Corporation (HSIIDC) plans to go ahead with the development of the proposed petrochemical hub at Panipat on its own by pumping in about Rs 3,700 crore.

As per the officials of HSIIDC, the project, which is to be spread over 4,000 acre (near Indian Oil?s Panipat refinery), will be developed in two phases. ?In the first phase, 2,000 acre will be developed and about 900 acre has been acquired for the same,? a senior official told FE.

But the project may be delayed further as Indian Oil Corporation (IOC) has decided to quit as an equal partner with HSIIDC in the petrochemical project.

It is learnt that HSIIDC is also scouting for a private partner to develop the petrochemical hub and working out the modalities to decide about the ownership model.

It is pertinent to note that the Haryana government had signed a memorandum of understanding with IOC for setting up this petrochemical hub on June 22, 2004, and extended a special package of incentives to IOC and future investors. But in the wake of losses incurred by the company due to underwriting on subsidies on petroleum products, IOC decided to withdraw from the project. IOC asked HSIIDC to dilute its role to that of a minority partner in September last year.

The HSIIDC official added, ?We are waiting for IOC?s response as to how much stake the company wants to pick up in the project. It may or may not agree to continue as a partner. But we have asked IOC to assure regular supply of petrochemicals from their Panipat refinery for this hub even if they refuse to be a minority partner.?

Once operational, the petrochemical hub will give a thrust to the downstream industries, especially polymer industry, based in the northern states.

Since IOC has expanded the capacity of its Panipat refinery from 6 MMTPA to 12 MMTPA, the petrochemical hub will help utilise the feedstock from the refinery.

The new complex will create a dedicated industrial zone for the downstream industries and is likely to attract an investment of more than Rs 15,000 crore.

Besides providing employment to about 20,000 persons directly, it will also generate indirect employment opportunities through ancillary units.

As per estimates, the petrochemical hub will eventually entail a total investment of Rs. 25,000- 30,000 crore once fully commissioned.