Andhra Pradesh

Petrochemical complex: Centre urged to foot VGF bill or exempt it totally

As part of its bid for the establishment of a petrochemical complex in Kakinada, the State government has requested the Union government to consider downsizing the viability gap funding (VGF) from an estimated ₹5,615 crore to ₹1,200 crore and funding the same, or giving an exemption from it altogether. The State government has also sought a reduction in the corporate tax to 25% to help the State overcome the financial burden to some extent.

Besides, the State government has committed itself to providing power and water subsidies amounting to nearly ₹630 crore per annum for an operating period of 30 years, according to official sources.

In his presentation to the Union Minister for Petroleum and Natural Gas on Wednesday, Minister for Industries Mekapati Goutham Reddy had cited a global reduction in interest rates as a positive factor that should make the project viable to a large extent, and that the State government was willing to extend support by other means.

Tax revenue

He pegged the potential tax revenue from the project to the State at ₹350 crore per year and the net tax revenue to the Government of India at ₹1,750 crore per year.

The project is expected to attract an investment of ₹1,00,000 crore through the development of downstream and ancillary industries.

It is going to be a 1 MMTPA ethane-based petrochemical complex costing about ₹32,900 crore and the product portfolio comprises monoethylene glycol, linear low density polyethylene, polyvinyl chloride and propylene derivatives.

The targeted construction period is four years. The project has been envisaged in the A.P. Reorganisation Act of 2014, and will be a constituent of the Visakhapatnam - Kakinada Petroleum, Chemical and Petrochemical Investment Region (PCPIR).

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Printable version | Aug 4, 2021 7:03:45 PM |

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