Cabinet approves transfer of Assam Gas Cracker Project to oil ministry

The Cabinet Committee on Economic Affairs (CCEA) chaired by Prime Minister Narendra Modi has approved the transfer of administrative control of Brahmaputra Cracker and Polymer Limited (BCPL), the Central Public Sector Undertaking (CPSU) implementing Assam Gas Cracker Project (AGCP) from Department of Chemicals & Petrochemicals (under Union Ministry of Chemicals and Fertilisers) to Union Ministry of Petroleum & Natural Gas (MOP&NG).

Other CCCEA Approval

CCEA also approved feedstock subsidy to BCPL for 15 years of plant operation for maintaining minimum Internal Rate of Return (IRR) of 10% (after tax). To bring IRR to 10%, BCPL has estimated feedstock subsidy of approximately Rs.4600 crore for project for 15 years of plant operation. Therefore, BCPL will submit proposal on yearly basis from next financial year (2020-2021) onwards and administrative Ministry/ Department will devise a mechanism to examine proposal in consultation with Union Ministry of Finance.

Union Ministry of Petroleum & Natural Gas will have to make firm arrangements through concerned PSUs for supply of committed quantity and quality of feedstock to AGC project as envisaged in earlier CCEA approval of 2006.

About Assam Gas Cracker Project (AGCP)

The project came as part of historic Assam Accord signed on 15 August 1985, with a view to bring socioeconomic development of region, thus it is seen as a part of implementation of Assam accord. It and involves setting up of facilities for manufacture of 2 lakh tonnes of ethylene annually using gas as feedstock. It is the first petrochemical project in the northeastern region of country. The 1st phase of long-delayed project was commissioned in late 2015.

The Rs.9,285-crore project is the first petrochemical project in the northeastern region of country and would give impetus to development of region as well as will improve the socio economic conditions of people of Assam through increased employment.

Background: The project was approved by CCEA on April 2006 and subsequently, a joint venture, BCPL was incorporated on January 2007. On 9 April 2007, then prime minister Manmohan Singh, laid the foundation stone of project at Lepetkata, 15 km from Dibrugarh. The project was supposed to be completed by April 2012, but, the target declines were delayed- first to December 2013, than to January 2014 and to June 2015, thus the project was finally being commissioned in November 2015.

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