Petroleum, Chemicals and Petrochemicals Investment region (PCPIRs)

1. Petroleum, Chemicals and Petrochemicals Investment region (PCPIRs) Specialty Chemicals Conclave - 2008 14-1-2008

2. 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

3. 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.

4. 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

5. 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.

6. 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.

7. 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.

8. 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.

9. 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.

10. 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

11. 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

12. 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

13. 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

14. 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

15. 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

16. 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.

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

18. 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.

19. Thank you