Republic World | Raj Govt Dilly-dallying On Sharing Cost Escalation Of Barmer Refinery Project: Hardeep Singh Puri

Feb 21,2023

Union Minister for Petroleum and Natural Gas Hardeep Singh Puri on Tuesday accused the Rajasthan government of dilly-dallying on bearing its share of cost escalation in the oil refinery project being set up in Barmer.

The minister said that if the share of cost escalation is not borne by the state government, then its share may be reduced to 16 per cent from 26 per cent.

Puri was speaking with reporters at the refinery complex during his visit here.

He said that the cost of the refinery cum petrochemical complex has increased from Rs 42,000 crore to Rs 72,000 crore due to the Covid-19 pandemic and the share of the state government in this cost escalation is around Rs 2,500 crore.

He said that the state government was apprised of the cost escalation in August 2021 but the state government has not made its stand clear yet.

"A decisive reply is still awaited from the state government. On request by the state government, a survey has been conducted on the price escalation but if the state government has trouble bearing this share, we are ready to bear this expenditure and in that condition, the state government share may go down from 26 to 16 per cent,” he said.

“We are determined to complete this project under the deadline,” he said.

The project is a joint venture of the Hindustan Petroleum Corporation Ltd (HPCL) and the Government of Rajasthan (GOR) having a stake of 74 per cent and 26 per cent, respectively.

The project is scheduled to be commissioned by March 2024. Earlier, the deadline was December 2022.

He said that after the project is commissioned, the crude import bill of the country will reduce by Rs 26,000 crore. “This project is the best example of India's commitment to capital expenditure,” he said.

He said that the country is going to be in the top three crude refiners in the world soon.

Talking about the refining capacity, he said that India currently has a refining capacity of 250 million metric tons (MMT) per day and the target is to increase it to 330 MMT per day.

Terming the refinery as the jewel of the desert, the union minister said that the project is a big gift of Prime Minister Narendra Modi to Rajasthan which has generated 35,000 direct employment and 1 lakh indirect employment.

Underlining the socio-economic benefits of the project in terms of employment generation and infrastructure development, the minister said that the project has engaged about 35,000 workers in and around the complex. Further, about 1,00,000 workers are engaged indirectly.

A Co-ed school till class 12th catering to about 600 students will be opened and a 50-bed hospital is also being developed at the site.

“The construction has commenced. Both will be completed by December 2023. This shall be the first school in the vicinity”, the minister said.

Talking about the environmental benefits of the project, he informed that a wetland habitat for migratory birds like Demoiselle crane is being developed in the refinery complex as well as the rejuvenation of natural surface water bodies and avenue plantation from Pachpadra to Khed, which are underway.

“Further, study by AFRI is being conducted for the desert lands in the complex to convert the same into green belt considering the high salt content in the land. Once the recommendations are received the plantation shall be carried out with the help of the Forest department under deposit works, said Puri.

Earlier, the minister visited the refinery project site and held a meeting with the officials.

The capacity of the refinery is 9 million metric tonnes per annum (MMTPA) which includes 2.4 MMTPA of petrochemical products.

The government of India's approval for the project was received in October 2017. The work commencement ceremony was held in January 2018 and was attended by the Prime Minister .

The refinery envisages processing imported crude as well as Rajasthan crude.