Andhra plans US$86 bln special development zone comprising petrochem complexes

Andhra Pradesh plans to set up one of the biggest special development zones (SDZ) with spectacular infrastructure development. Several mega integrated petrochemical complexes and refineries will be set up like never before in a single corridor that extends across the coast from Vizag to Kakinada, over 603 sq kms near Vizag. A similar PCPIR is being planned at Dahej in Bharuch district of Gujarat. Located between two industrialised zones, Vizag and Kakinada - both having two ports each and connected to the Golden Quadrilateral, the PCPIR's USP is also its strategic location as it is well connected both to the outside world as well as hinterland. The PCPIR envisages having manufacturing facilities for domestic and export-led production in petroleum, chemical and petrochemical sectors with associated services and infrastructure. The Centre would provide rail connectivity, highway network and airports while the state Government would provide basic infrastructure including power and water supply. The state Government has appointed the Andhra Pradesh Industrial Investment Corporation (APIIC) as the nodal agency for the project while GTZ-Germany is the technical partner for environmental management. A special purpose vehicle, AP PCPIR Development Authority, is also being formed. Over Rs 3 lakh crore (US$ 85.75 bln) investment in the PCPIR is expected from diverse players such as ONGC, HPCL, GAIL, Mittal Energy, Total (France), Bharat Petroleum, ISPRL, Continental Carbon, Reliance, Air Liquide, Velankani, Baker Hughes, Biocon and Naturol. Almost half the investment outlay-US$41 bln has been committed so far. The existing Vizag port is being upgraded for handling PCPIR cargo, the Gangavaram port is scheduled for phase-I commissioning by June 2008 and is dedicated for PCPIR. A dedicated port for Kakinada SEZ is proposed while the Kakinada Deep Water port is also being upgraded for handling PCPIR cargo. The Chennai-Kolkata National Highway-5 and the Vizag-Rajahmundry stretch are being made four and six-laned respectively. The state highway 97 is being upgraded into four lanes to provide fast connectivity to Vizag city while a 138-km long coastal corridor connecting Gangavararm port with Kakinada port is also being planned. A dedicated 220 KV sub-station has already been set up in the PCPIR. Initially, three refineries with a total capacity of 45 million tpa would be coming up if the PCPIR proposal is cleared by the Centre's Committee on Economic Affairs, and the state Government addresses the environmental concerns. The PCPIR policy was announced by the Centre last May to create special zones where environment is conducive for setting up large integrated petrochemical complexes which offer benefits of common infrastructure and support services of great cost advantage. The PCPIR also includes five SEZs that were declared earlier in 2006-07. Last month, the PCPIR proposal of Andhra and Gujarat were passed by the Chemicals and Petrochemicals Department, and it would now be taken up for scrutiny by the 15 Central secretaries committee chaired by cabinet secretary K Chandra Shekhar. Depending on their decision, the proposal would be forwarded to the Committee on Economic Affairs.