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Assam sees Reliance withdrawal, wants PSU to complete gas cracker project

Mrinal Talukdar in Guwahati

The Assam government has urged the Centre to look for oil sector public sector undertakings to promote the ambitious Rs 36 billion gas cracker project even as the stalemate over Reliance's participation continues.

Although Reliance has not officially abandoned it, the Assam government has started a hunt already, writing to the ministry of petroleum and natural gas to look for another promoter, a senior official said.

The formal hunt would begin later this week when Chief Minister Prafulla Kumar Mahanta chairs a high level meeting to take the final decision. The meeting may draw up a list comprising Oil India Limited, Oil and Natural Gas Corporation, and the Gas Authority of India Limited to implement the project since Reliance was not showing keenness on completing the project.

The foundation stone was laid by the then prime minister Narasimha Rao in 1995 and a Letter of Intent issued to the Reliance Industries Limited. But RIL and the main gas supplier OIL could not reach an agreement after more than half-a-dozen rounds of discussions in the past one year.

RIL's exit from the gas cracker project is being viewed as certain by the Assam government as the ministry of petroleum and natural gas has rejected its Liquidation Damage clause inserted in the gas supply agreement with OIL.

Meanwhile, OIL CMD B B Sharma had evinced keenness in the project and officially said that given responsibility, OIL would like to implement the project.

The source said RIL was yet to make a move in response to the ministry's rejection of the LD clause but added that an early announcement of their position would be in the interest of the state. The project was to go on stream in 18 months. The delay was pushing up cost by Rs 10 million a month.

Meanwhile, the government made it clear that the Centre must take the initiative to implement the project as the prime minister had laid the foundation stone.

The project, which has become a sentimental demand for over a decade in upper Assam, has forced the people to organise a huge convention last week, calling upon the state and central governments to look for alternatives for its implementation since RIL was not willing.

The gas cracker is expected to usher in an industrial revolution with the supply of easy raw materials.

The plant's original site at Tengakhat has also met with an unexpected hurdle from the Indian Air Force which objected on the ground that it obstructed the flight path.

In fact, the state government, the source informed, had completed a survey in an undisclosed site in Dibrugarh district.

UNI

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