The Punjab government has agreed to allow special concessions to Guru Gobind Singh Refinery Ltd (GGSRL), also known as Bathinda Refinery, a joint venture between Hindustan Petroleum Corporation Limited (HPCL) and steel tycoon LN Mittal?s Mittal Investments.
Sources in Punjab chief minister Parkash Singh Badal?s office told FE on Tuesday that the ?Punjab government has agreed to an indemnity bond in lieu of bank guarantee as is the norm?.
The GGSRL needs indemnity bonds of Rs 250 crore for signing of conveyance deeds for land needed for the refinery. Sources said that when the joint venture partners were HPCL, a PSU, and an industrialist of the stature of Mittal ?Where was the need for bank guarantees?. Mittal and HPCL have jointly picked up 49% stake in the proposed Rs 18,919 crore refinery.
Sources also said that 18 officials of the JV partners including managing director of HPCL, Arun Balakrishanan, had held a meeting with Badal on Saturday. Punjab chief secretary Ramesh Inder Singh and principal secretary to the chief minister Darbara Singh Guru were also present at the meeting held on September 1.
The sources said that as the JV partners pleaded for more concessions, the chief minister assured that, ?Punjab government would also extend assistance in purchase of land for refinery from land owners?. The government also agreed to construct a dedicated power sub-station for the refinery besides 44-mw power back up from Punjab State Electricity Board (PSEB).
It may be recalled that the HPCL has formed a 100% subsidiary GGRL while Mittal has formed Mittal Energy Investment Limited (MEIL) and a Singapore-based company to execute the project. The proposed project of 9 mmtpa and 152 mw power generation, thrice postponed earlier, has seen cost runs and its likely cost jacking up from Rs 6,000 crore to Rs 10,500 crore and Rs 14,000 crore finally settling at Rs 18,919 crore, is to be commissioned by December 2010. Interestingly, it was during the earlier regime of Parkash Singh Badal when the project was initially mooted. Sources also said that within the refinery area, about 31 km of internal roads, rainwater support system and a water reservoir have already been constructed.
However, about 300 acres of land was still needed for the project. About 230 acres of land had been acquired at Mundra in Gujarat for setting up a terminal of crude oil. Further rights to lay 1,012-km pipeline had been taken from owners of land between Mundra and Bathinda.