Vasundhara Raje’s dream refinery in pipeline, may take 5 years to realise

The dream project of the Vasundhara Raje’s government - the joint venture HPCL Rajasthan Refinery Ltd - will take four to five years to be completed. The state government  has allotted  4,800 acres of  land at Pachpadra in Barmer district for the refinery. The project was conceived in 2013-14.

Petroleum & natural gas minister Dharmendra Pradhan has  hinted that a time line of four to five years is required for setting up the refinery. But much time would be saved as no land acquisition would be required for the project and the state government is ready to provide 4,800 acres of land. The water for the project would be   sourced from the Indira Gandhi Canal through pipelines.The first task before starting the work for  setting up the refinery will be the environment clearance from the union ministry of environment and forest as  the location of  the proposed refinery comes within the proximity of the  Pachpadra Lake,  which is one of the oldest salt collection area. The actual site of the  refinery  is about 12 to 15km from Pachpadra  city and the other big town near the refinery is  Balotra.

The issue of the land cost of 4,800 acres which the state government is going to provide for the project is to be  mutually discussed  between the state government and the Hindustan Petroleum. The state will determine the current price of the  land and would insist on  taking the land cost as part of its equity.  As the  new MoU has been signed, these issues would come up for  further discussions in future meetings. Rajasthan  State  Petroleum Corporation (RSPC), a  subsidiary of Rajasthan State Mines & Minerals Ltd (RSMML), will be the nodal agency for the state government that would work with the HPCL. The RSPC  shall prepare the roadmap for the refinery.

The Rs 43,129 crore project’s progress will depend on the proposed amalgamation of the  HPCL  with the Oil & Natural Gas Corporation (ONGC), another  Union government undertaking. The Union government’s  department of disinvestment has issued a cabinet note to this effect and the Prime Minister’s office is keen to  effect the amalgamation to create a huge energy PSU on the global scale..The Union government is said to be planning to combine HPCL with ONGC by selling its 51.1 percent stake in the former to the latter for about Rs 29,000 crore. This would need  the approval of the cabinet.

Once the  amalgamation is approved, the ministry of petroleum and natural gas  will have to decide whether to adopt a subsidiary model for combining the  two oil PSUs instead of merging the  companies, making the ONGC, the parent company and the HPCL as the subsidiary of the ONGC.

Thus, the progress of the refinery will depend a lot on the major decisions that would be taken by the  oil and gas ministry on the functioning of the two PSUs after the amalgamation process is completed.