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Andhra proposes coastal highway to link petrochemical projects

Andhra proposes coastal highway to link petrochemical projects
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First Published: Wed, May 28 2008. 11 19 PM IST
Updated: Thu, May 29 2008. 01 35 PM IST
New Delhi: The Andhra Pradesh government has asked the Centre to build a Rs3,300-crore coastal highway connecting Kakinada and Visakhapatnam to support the petroleum refineries it plans to build in the region.
Andhra Pradesh finance minister Rosaiah Konejeti confirmed the development on Tuesday. “The Centre has shown some interest in helping us,” he said.
The state also wants the Union government to spend Rs2,700 crore to develop ports and extend railway lines to the area where a petroleum, chemicals and petrochemical investment (PCPRI) project is coming up.
The project is expected to attract investments of over Rs3 trillion.
The proposed highway will help in transporting petroleum products. It may also be extended up to Chennai as a new express passenger corridor.
The Union and state governments will jointly develop infrastructure for the petroleum, chemical and petrochemical factories that will come up in the 603.58 sq. km area identified between Visakhapatnam and Kakinada.
Located close to the oil and gas-rich Krishna Godavari basin off India’s east coast, the PCPRI project is expected to cut business costs and ease operations for refiners, which will also enjoy a tax holiday.
The state government made its requests to the Centre earlier this week, an official familiar with the matter said.
The request is expected to be taken up by the cabinet committee on economic affairs, or CCEA, after the matter is discussed by a committee of secretaries, which will include bureacrats from the ministries of shipping, road transport and highways, and petroleum.
The state government has told the Union government that the project will be developed through a special purpose vehicle, or SPV, it is setting up.
“The Centre has in principle approved the proposal and we would shortly begin the project work,” said an official with Infrastructure Corp. of Andhra Pradesh, or Incap, who did not wish to be identified as he is not authorized to speak with the media.
Incap is the nodal agency for the road projects for the PCPRI project, including the coastal highway, while the Andhra Pradesh Industrial Infrastructure Corp. Ltd, or APIIC, is the nodal agency for the whole project.
The official also said Washington-based International Finance Corporation, an arm of the World Bank, has offered project development services for the Kakinada-Visakhapatnam coastal highway project.
While the first phase of the coastal highway corridor project is proposed between Kakinada and Visakhapatnam, the next phase would be extended till Nellore along the coast, the official said.
The other road projects in the region would be taken up through the public-private-partnership model and the government will offer viability gap funding to support the private player, said the official.
He added the existing four-lane national highways will be widened to six lanes.
Shipping and road transport secretary Brahm Dutt said the ministry has already received the requests from the Andhra Pradesh government to widen the two highways.
“We are already working on these proposals. The proposal for the coastal highway is yet to reach us. Once it comes we will give all assistance. However, we do have some budgetary constraints,” he said.
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First Published: Wed, May 28 2008. 11 19 PM IST