Assam gas cracker project cost escalates by 53 per cent

Assam gas cracker project cost escalates by 53 per cent

2:58 AM, 18th November 2011
Assam gas cracker project cost escalates by 53 per cent

 

NEW DELHI, INDIA: The Assam gas cracker project is now estimated to involve fixed cost of Rs 89.2 billion against its original estimate of Rs 54.6 billion as approved by the cabinet committee on economic affairs (CCEA) in 2006, a 63 per cent escalation in project cost. Prime Minister Manmohan Singh laid the foundation stone of the project in 2007 and specified a deadline of five years for completion of the project. The project was renamed the Brahmaputra Cracker and Polymer Ltd (BCPL) a few months back. The date of completion was rescheduled to July 2013, a delay by 15 months from previously announced date.

The CCEA has now approved the revised cost estimates of the project, which would be funded by capital subsidy of Rs 46.9 billion and debt and equity of Rs 29.6 billion and Rs 12.6 billion, respectively.

The ambitious project is part of the Assam Accord signed in 1985. Its initial cost was Rs 36 billion, when the first MoU was signed between the former promoter, Reliance Industries Ltd and the state government in 1994. After RIL pulled out of the project, it was given a fresh lease of life in 2006 and the estimated cost escalated to Rs 54.6 billion. The project was declared a joint venture with Gas Authority of India having 60 per cent share and Numaligarh Refinery Ltd, Oil India Ltd, Indian Oil Corporation and Assam Industrial Development Corporation with 10 per cent equity each.

(C) WOC News

 

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