The Bharatiya Janata Party government's recent announcement for starting work on the stalled project for an oil refinery in the Thar Desert of Rajasthan has taken away a major political issue from the Congress. Congress leaders were constantly accusing the BJP regime of stopping the project out of vengeance.
A memorandum of understanding signed by the previous Congress government with Hindustan Petroleum Corporation Limited for the refinery was shelved with doubts created about its financial viability. Chief Minister Vasundhara Raje announced last week that a new MoU would be signed shortly with HPCL for setting up the refinery in Barmer district, near the oil discoveries made by Cairn India. She said the government had renegotiated the deal to arrive at terms which would “look after the best interests of the State”.
Chief Minister Vasundhara Raje said the financial burden on the State following the refinery's installation would be reduced by two-thirds to reach Rs. 205.83 billion despite an escalation in the project's cost. After renegotiations, the total viability gap funding to be paid by the State would amount to Rs. 168.45 billion against Rs. 560.40 billion stipulated in the previous MoU.
Besides, an amount of Rs. 38.71 billion which was to be paid as 26% equity has been reduced to Rs. 37.38 billion. Ms. Raje said her government did not want to take a hasty decision on the project, unlike the Congress regime which had rushed to make a “populist announcement” before the 2013 Assembly election.
The 9-million tonnes refinery-cum-petrochemical complex is expected to bring a tremendous amount of revenue to the State and develop the desert region exponentially. Congress president Sonia Gandhi had laid foundation stone for the refinery in September 2013.
Senior Congress leader and former Chief Minister Ashok Gehlot has reacted cautiously to Ms. Raje's announcement, while holding the BJP government responsible for stalling the project. He said the Chief Minister was forced to give up her “adamant attitude” because of popular demand of the State's people.