New PCPIR policy to be shouldered by Centre, suggests high-level committee

Unlike the PCPIR Policy 2007 that thrust the burden on state governments to develop the petroleum investment regions in their respective states, the new policy mandates the central government to shoulder the bulk of it. A high-level committee, headed by the Andhra Pradesh government’s Special Chief Rajat Bhargava drafted the new PCPIR Policy 2020-35.

“We require at least 10 projects in the next 10 years to grow as an industrial power,” Bhargava told PTI. “The Centre and the states should work as a team to ensure financial closure for these large projects.” He explained that the whole idea was to rejuvenate investments in PCPIRs through policy interventions and help in building Atmanirbhar Bharat.

Under the new PCPIR Policy 2020-35, it has been targeted to attract a combined investment of Rs 10 lakh crore by the year 2025, Rs 15 crore by 2030 and Rs 20 lakh crore by 2035 in all PCPIRs across the country.

The Petroleum Chemicals and Petrochemicals Investment Region (PCPIR) makes the Centre the main driver to develop India as a global hub for petroleum, chemicals and petrochemicals processing and manufacturing by attracting investment of Rs 20 lakh crore by 2035. The Centre, under the new policy, is expected to provide Viability Gap Funding (VGF) of up to 20 per cent for infrastructure projects in PCPIRs. The VGF could enable each project to catalyze around Rs 2 lakh crore additionally.

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The high-level committee suggested that the government ensure priority funding of PCPIR projects under the National Infrastructure Pipeline to improve financing options. It recommended that a special provision be made under NIP to prioritize PCPIR projects and reserve necessary funding for their implementation. The committee suggested that the Centre develop a strategy for attracting anchor projects for each of the existing PCPIRs and any proposed new ones. It also recommended that the Centre assist the state governments in identifying an anchor unit for every PCPIR that will act as a catalyst for development of other projects.

“The Government of India shall provide VGF for state-owned companies or joint venture firms in the oil and gas sector to set up anchor projects in each PCPIR. It shall provide Project Design and Management Counsultancy (PDMC) Fund of Rs 15 crore to each PCPIR to provide funding to state governments for availing technical assistance for master planning, detailed engineering and project management consultancy,” it stated.