I have found the answer to my question in last week’s posting on the proposed chemical hub at Nayachar, West Bengal.
I had wondered which public sector company would be targeted by the West Bengal government for investment at Nayachar. According to The Telegraph, Indian Oil Corp (IOC) has been invited to set up shop.
Preliminary talks have been held and West Bengal’s industries secretary has said that the company is ready to start a preliminary study as soon as it obtains a formal letter identifying Nayachar as the site for the chemical hub.
IOC already has a refinery and petrochemicals project underway at Paradip, Orissa, not to far away from Haldia. Would it not make more sense for the company to focus its resources on this site – perhaps expand refinery capacity further and develop it as a mega site along the lines of Jamnagar on the west coast of India?
But IOC is looking at connecting Nayachar with its operations at Haldia where it has a refinery and also much delayed plans for refinery expansion and downstream petrochemicals. These include raising refining capacity from 6m tonnes/year to 7.5m tonnes/year and a new paraxylene (PX) plant.
In case you have forgotten, IOC had also picked up a stake in Haldia Petrochemicals a few years back in the hope that it would acquire management control and integrate it with its refinery operations. But a tussle between the West Bengal government and The Chatterjee Group, the two key promoters of HPL, had forced IOC to put these plans on hold.
IOC’s confidence in the West Bengal government is surprising. Or is it a case of yet another state-owned company bowing to the demands of political expediency?
This leads me to another question. Why have private companies or multinationals not announced investments in any of the proposed chemicals hubs and PCPIRs? Are these zones fundamentally flawed? Or has the government not effectively marketed them?