Petroleum, Chemicals and Petrochemicals Investment region (PCPIRs) Specialty Chemicals Conclave

Background Task force constituted under convenorship of Principal Secretary, PMO Scope of the task force: –Development of PCPIR policy/ legal framework –Issues related to feedstock policy including pricing/tariff –Finalization of the locations of PCPIR

Objectives To promote investment and make the country an important hub for both domestic and international markets To attract major investment both domestic and foreign by providing a transparent and investment friendly policy and facility regime under which integrated PCPIR may be set up.

Objectives Possible benefits due to: –Co-siting –Networking –Use of common infrastructure/support services Aim toward creation of high class infrastructure: –Conducive and competitive environment Promote manufacturing, exports and employment generation

Definition A specifically delineated investment region with an area around 250 sq. km. Establishment of manufacturing facilities for domestic & export led production in petroleum, chemicals & petrochemicals along with the associated services/ infrastructure Combination of production units, utilities, logistics, environmental protection mechanism, residential areas & administrative services.

Definition Broadly segregated under two regions: –Processing area catering to manufacturing facilities, logistics & other infrastructure services –Non-processing areas: residential, commercial, social & institutional infrastructure Minimum processing area: 40% of total designated area (around 100 sq.km.) Processing area may or may not be contiguous.

Definition PCPIR to include: –One or more SEZs –Industrial Parks –Free trade & warehousing zones –EOUs –Growth centres All the benefits available under relevant legislation or policy will continue to remain available forming part of PCPIR State Govt may also notify addl package of incentives for development of PCPIR.

Facilities Each PCPIR would have a refinery/ petrochemical feedstock company as anchor tenant Internal infrastructure to be built & managed by a developer &/or group of co- developers External linkage to be provided by GoI & concerned state govt. Users of internal/external infrastructure to pay for its use.

Role of Central Govt. Consider applications of State Govts. For establishment of PCPIR: expedite approval Constitution of high power committee for co- ordination of Central ministries & State Govt. Monitoring progress on development & other statutory clearances required Ensure availability of infrastructure linkages in time bound manner Provide support to State Govt.

Role of State Govt. To play lead role in setting up PCPIR: –Identification of suitable site –Notification of PCPIR area –Facilitation in acquisition of land including rehabilitation –Creation of common infrastructure & utility linkage –Notification of a nodal department for co- ordination: empowerment for single window clearance

Role of State Govt. State Govt to ensure: –Connectivity/availability of reliable power –Water requirement for process units –Common effluent treatment/sewerages –Infrastructure addressing health, safety & environmental concerns State Govt. to constitute a management Board for development of PCPIR Notification of addl package of incentives

Likely Incentives Central Govt incentives: –Fiscal incentives for developer – extend exemptions on taxes & duties as granted in SEZ –Area based exemptions: Tax holiday MAT exemption Service tax exemption Excise duty exemption for inter unit sales Concessional CD for new capital goods State Govt incentives: –Can vary from state to state –Notification of package prior to PCPIR approval

Institutional Framework Dept of Chemicals & Petrochemicals under MOC&F nodal agency High powered committee constituted to scrutinize applications for PCPIR development & subsequent monitoring Empowerment of State Govts for expeditious state level clearance/approval Constitution of management Board by State Govt. in the form of SPV with a Corporate as the anchor tenant & structure facilitating sufficient autonomy

Institutional Framework Functions of the management Board: –Preparation of detailed masterplan –Provision of infrastructure directly &/or with other developers –Formation of specific definitive agreements –Promotion of investment: domestic & foreign –Granting approvals: facilitating clearance for processing units –Creation of SPVs for specialized services –Review of progress

Institutional Framework Developer & co-developer: –Any legal entity: Govt, private or public/private partnership –Development toward buildings, infrastructure, common facilities, finances etc. State Govt to provide reqd. land through management Board with concessions Provision of tax holiday as provided under section 80(1)(A) of Income Tax

Units in PCPIR Petroleum based industries Service units to support process industries Utilities/infrastructure Units may also produce export goods & services Rejects, wastes & scraps from processing units may be sold outside SEZ/exported Export of specialty chemicals encouraged.

Identified Locations GoI has identified 5 locations to set up PCPIR: –Dahej –Mangalore –Vizag –Haldia –Paradip

Drive for Growth Indian companies are willing for collaboration with international majors to add new capacities in India to explore the growing demand of products. Government of India is also advocating and promoting new investments in the country.

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