DIBRUGARH, July 6 � In a major setback to the promoters of the Assam Gas Cracker Project of Brahmaputra Cracker & Polymer Limited (BCPL), the Government of India has pegged the cost of the project at Rs 8,879 crore, against BCPL�s demand for Rs 9,285 crore. This reduction of Rs 406 crore in the project�s estimated cost may put up obstacles in the ongoing construction works.
While BCPL has requested the Centre for a capital subsidy of Rs 6,161 crore, the current understanding is that the company would be allowed a capital subsidy of Rs 4,690 crore, a gap of Rs 1,471 crore. This is likely to exert severe financial pressures on the four promoters of BCPL: OIL, GAIL, NRL and the Government of Assam, as these four entities would now have to shoulder this burden.
The revised estimate, culled from highly reliable sources, may ultimately make the project a losing proposition, as the capital investment far exceeds short term viability norms. The only ones to make a profit out of the project, as of now, are the contractors who are involved in the project construction. For those looking for a industrial makeover of the project, matters appear more like a pipe dream rather than anything else, given the huge subsidy requirements to make the gas cracker self sustaining.