Times of India | Union minister blames Rajasthan govt for delaying Barmer refinery project

Feb 22,2023

Union minister of petroleum and natural gas Hardeep Singh Puri on Tuesday held the Rajasthan government responsible for evading contribution to the escalated cost of refinery coming up at Pachpadra in Barmer. The state government has a 26% stake in the refinery.

Puri said this while speaking to the media during his visit to the Pachpadra refinery. He said the state government was apprised about the cost overrun on the refinery's expenditure in August 2021. This had led to an increase in the state's share by Rs 2,500 crore.

"But we have not received a clear nod on bearing this escalated cost from the state government," Puri said, rubbishing the state government claim blaming the Centre responsible for project delay.

If the state government has any trouble bearing its share, the Centre was ready to bear the expenditure on condition that the state government dilute its share from 26% to 16%, he said, adding that no further delay could be allowed due to this reason.

The cost of the refinery-cum-petrochemical complex had increased from Rs 43,000 crore to Rs 72,000 crore due to the delay caused by the Covid pandemic.

It is now slated to be completed by March 2024."This delay has seen appreciation in input cost of the refinery under various heads. Steel prices have shot up by 45% as well as cement, etc. Even the exchange rate has shot up by 15%, contributing to the cost overrun," Puri said. The Hindustan Petroleum Corporation Ltd (HPCL) and the state government have a 74% and 26% share, respectively, in the joint venture. The current capacity of the refinery is 9 million metric tonnes.

It has an in-built capacity of an additional 9 MMTPA. Once commissioned, the project will reduce crude import costs by Rs 26,000 crore. Terming the refinery as a 'Jewel of the Desert', he said that the project is a big gift from PM Narendra Modi to Rajasthan and a perfect example of utilising capital expenditure for Atmanirbhar Bharat. It will provide direct employment to 35,000 people and indirect employment to 1 lakh. The project, conceived in 2008, was initially approved in 2013. But it took four years to receive the final approval from the Centre in October, 2017. The foundation stone was laid by PM Modi in January 2018.