The proposed relocation of an old oil refinery from the United States to Visakhapatnam has kicked up a row with regard to funding to the Rs.12,000 crore project.
As part of New Industrial Policy, the State government soon after signing a Memorandum of Understanding with technocrat-entrepreneur Syed Badruddin to relocate the refinery in collaboration with American Industries Corporation (AIC) issued a GO sanctioning a slew of incentives.
The refinery complex is proposed in the Visakhapatnam-Kakinada Petroleum, Chemical and Petrochemical Investment Region (PCPIR).
At the time of signing the MoU, the project proponent reportedly cited that it had obtained approval from Export-Import Bank of America for sanction of part of finance. Ex-Im Bank of America Chairman Fred Hotchberg clarified in Hyderabad last month that they had only issued a letter of interest and the question of sanction of loan would arise only after studying the viability.
Former Union Power Secretary and social activist E.A.S. Sarma in a letter to the Union Petroleum Secretary stated that the second hand refinery to be set up near the city by a relatively unknown company raises several eyebrows.
“We are concerned over the pollution that such a refinery will cause. Moreover, we also apprehend malpractices in the import of such second hand refinery equipment,” he said.
As per the MoU, Amerind Petroleum Private Ltd wants to relocate an old refinery in the US near Vizag to produce 7.5 million tonnes per annum in first phase. In the second phase, it wants to double the capacity and set up a petrochemical complex.
Rebbapragda Ravi, executive director of Samata -- an NGO -- told The Hindu that the refinery was closed due to pollution and the denial of sanction letter by Ex-Im Bank of America was itself an exposure that the project proponent's real intentions.
In a letter to Mr. Hotchberg, he said, “We write with concern about the potential for the Export Import Bank to finance the export of a used oil refinery from Pennsylvania to the proposed Amerind Petroleum project near Vizag.”
According to information from the U.S. Environmental Protection Agency, prior to closure, the obsolete 69 year old refinery was the source of considerable soil and groundwater contamination from metals (arsenic, lead, and chromium) and organics (petroleum hydrocarbons, polycyclic aromatic hydrocarbons, benzene, xylene and toluene).
He said Vizag Industrial Cluster, where the Amerind Petroleum project is proposed, is already excessively polluted.
The area has been identified by India's Central Pollution Control Board as being among the few highly polluted industrial clusters in the country, and the Union Ministry of Environment and Forests has placed an embargo on the addition of new industries in the zone.
