Rajasthan Government Dilly-Dallying On Sharing Cost Escalation Of Barmer Refinery Project, Says Union Minister Puri

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
Rajasthan Government Dilly-Dallying On Sharing Cost Escalation Of Barmer Refinery Project, Says Union Minister Puri

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.

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. 

Also, a school with 600 students capacity and a 50-bedded hospital is also being developed in the area. 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.

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