ICICI, which has evaluated the impact of the state government’s tax concession to the project, has reportedly given a favourable report. However, the IOC review sub-committee, which will review the ICICI opinion and make a recommendation, is meeting on Tuesday to finalise its report. The board of directors would take a final decision on the project in accordance with the recommendation of the sub-committee.
The sources said IOC is not keen on investing a huge amount in a greenfield project at a time when the market is not favourable. Instead, the corporation proposes to concentrate on expansion of its Panipath and Barauni facilities. According to the sources, the IOC is planning to set up a Rs 600-crore crude pumping station at Paradip in order to assuage the hurt feeling of the Orissa people.
The Rs 8,312-crore refinery project has become a prestige issue for the BJD-BJP coalition government in Orissa. Prime Minister Atal Behari Vajpayee had laid the foundation stone for the project, and the BJD supremo and chief minister Naveen Patnaik has made it his pet project.
Industry watchers here, however, say the project would become a victim of the vicious circle of cost and time overruns and die a premature death. Already, the cost of the project has gone up by Rs 1,100 crore.
Conceived during the tenure of the Deve Gowda government at the Centre, the project took five years to take shape. Initially, it was decided that the Navaratna oil PSU would firm up a joint venture with Kuwait Petroleum Corporation (KPC) to set up the refinery facility at Paradip. However, the joint venture could not materialise as the foreign partner lost interest in the project. Then the cash-rich IOC decided to go ahead with the project alone.
While the frequent changes of government at Centre delayed the project, the ongoing tussle between the Orissa government and IOC over tax concessions has only added to the problem.