Plans by India’s largest oil refiner, Indian Oil Corp., to set up a Rs15,000 crore petrochemical project at Nayachar in West Bengal may come unstuck due to land acquisition problems and environmental concerns.
The project was shifted to Nayachar following troubles at the first site, in Nandigram, over land acquisition.
Coming unstuck?Nayachar in West Bengal. IOC proposes to set up a Rs15,000 crore petrochemical project at the location.
“Though the new site has been proposed at Nayachar, we do not see anything much happening due to land acquisition problems even there,” said one IOC executive, who didn’t want to be named.
Sabyasachi Sen, principal secretary of West Bengal’s commerce and industries department, said, “We have not heard anything from IOC, and so we are unable to comment.”
The Petroleum and Chemical Petrochemical Investment Region, or PCPIR, at Nayachar named as Prafulla Chandra Roy Chemical Complex, planned to develop the chemical hub in 10,000 acres, including some islands.
It is a joint venture between the West Bengal Industrial Development Corp. and New Kolkata International Development. The IOC petrochemical project is the mainstay of the chemical hub.
IOC has plans to build a 15 million tonne per annum (mtpa) greenfield refinery at the location. India has a refining capacity of 149mtpa of crude, and IOC has a 40% share of the business.
The selection of Nayachar by the state government has already raised several questions because it violates existing laws governing the development of coastal areas. Spread over 11,000 acres, Nayachar lies in the coastal regulation zone, where industry is prohibited under the Environment (Protection) Act of 1986.
Further, the area is prone to intense tidal activity, which recedes almost as fast as it builds—piling up sand into land-like formations and disappearing at equal pace as reported by Mint on 3 October. With some fishermen living on the island, displacement is also an issue.
The final decision on the new site awaits an environment impact analysis as well as approval of the Union government.
“In some of the clearances particularly environment, there is a fair degree of dependance on the Central government. If most of these issues are not resolved, it will have an impact on the project. If IOC pulls out of the project, the state government will have to search for another company. There is a need for a PCPIR in the eastern region,” said Arvind Mahajan, executive director at audit firm KPMG.
PCPIRs, identified mostly in coastal India, seem to encourage investments of a global scale in the petroleum, chemical and petrochemical sectors in order to accelerate economic growth and employment opportunities in the region.