Ethylene & propylene project achieves financial closure
The financial closure of 280,000 TPA petrochemical plant being set up at Lepetkata in District Dibrugarh, Assam at a cost of Rs. 5461 crore by Brahmaputra Cracker and Polymer Limited (BCPL) has been achieved. The announcement was made by Shri B. C. Tripathi, Chairman, BCPL and Chairman and Managing Director, GAIL.
Brahmaputra Cracker and Polymer Limited was incorporated on January 8, 2007 as a Joint venture company having GAIL (India) Limited, Oil India Limited, Numaligarh Refinery Limited and Government of Assam with GAIL having 70% stake and the other partners sharing 10% each respectively. The funding of this project has been envisaged with a Debt: Equity ratio of 2:1.
Of the total project cost of Rs. 5460 crore, Rs.2138 crore has been given as capital subsidy and Rs. 909 crore has been given as feedstock subsidy by Government of India. Of the balance Rs. 3124 crore, the equity component is Rs. 1041 crore. The debt component of Rs. 2083 crore has been tied up. Of this, loan of Rs. 327 crore has been tied-up with OIDB in September 2009.
Balance debt component of Rs. 1756 crore has been tied up today. The debt has been syndicated by a consortium of Punjab National Bank (Leader), Almondz Global Securities Limited and SPA Merchant
Bankers Limited.The banks participating in the consortium are Punjab National Bank, Bank of Baroda, Bank of India, Andhra Bank, Allahabad Bank, Corporation Bank, Jammu & Kashmir Bank and State Bank of Travancore.
The request for issuance of necessary exemption notifications for VAT, Works Contract Tax and Entry Tax by Government of Assam is under process and exemption notifications are likely to be issued soon.
Further, it is worth mentioning that the Project has received consistent support of Government of Assam, Ministry of Chemicals & Fertilizers, Government of India, GAIL (India) Limited and other promoters by way of allotment of requisite Land, timely grant of capital subsidy, infusion of equity (even without waiting for availment of debt) and deployment of highly skilled & experienced manpower etc.
BCPL has made a total financial commitment of around Rs. 1750 crore for the project and will spend Rs. 896 crore on project activities during FY 2009-10. BCPL has so far. Final Basic design and Engineering packages for all units have been received and accordingly material requisition and ordering of equipment are in progress. Site delivery will progressively start from May 2010 and is likely to be completed by September, 2011.Similarly, orders for critical works are being placed progressively from November 2009 to May 2010.
The Company has achieved several significant milestones including completion of barbed wire fencing, topographical and geotechnical surveys, pipeline and hydrological route survey, infrastructure for construction power and construction of site office. Various site activities such as administrative block building, site grading,plant building and non-plant building works, product warehouse, piling works and boundary wall for Township.