NEW DELHI, Nov 16 � The under-construction mega gas cracker project today got a fresh boost when the Cabinet Committee on Economic Affairs (CCEA) cleared the revised cost estimates of the Assam Gas Cracker Project to the tune of Rs 8,920 crore. The project is now scheduled to be commissioned by December, 2013.
According to the reworked financial structure, the project will be funded by capital subsidy of Rs 4,690 crore and debt and equity for Rs 2,961 crore and Rs 1,269 crore respectively.
The revised cost estimates of Rs 8,920 crore are based on 10 per cent Internal Rate of Return, debt-equity ratio of 2.33:1 and polymer price at Rs. 67,709/MT (weighted ave-rage). The price of natural gas is pegged at Rs 4,100 TSCM, that of naphtha at Rs 35,474 per TSCM and pro rata infusion of equity and capital subsidy before drawdown of debt.
Official sources said that in case the planned loans do not materialise, the same will be picked up as additional equity by the promoters. The revised capital subsidy will be sought by the Department of Chemicals and Petrochemicals from the Ministry of Finance and Planning Commission in 2011-12 and 2012-13 by way of additional budgetary support.
The project schedule has also been revised with mechanical completion by July, 2013 and commissioning by December, 2013. The project was earlier scheduled to be completed by December, 2012.
The CCEA headed by the Prime Minister had on April 18, 2006, approved of the setting up of the Assam Gas Cracker Project at a project cost of Rs 5460.61 crore.
The Centre has blamed increase in construction costs, frequent bandhs and labour unrest and prolonged monsoon season for the delay in completion of the project.
The Assam Gas Cracker Project is expected to generate substantial employment opportunities as a result of investments in downstream plastic processing industries and allied activities. The project is considered to be of crucial significance for Assam and North Eastern region. Currently, the project is in its fifth year of execution. The requisite land for the complex has been acquired and necessary land development is also in the completion stage.
The Assam Gas Cracker Project was borne out of the Assam Accord signed among Central Government, All Assam Students Union (AASU) and Asom Gana Parishad (AGP) on August 15, 1985.