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Pratim Ranjan Bose

Total bid value for the project is approximately Rs 11,900 crore

Kolkata. May 2

Indian Oil is planning to award the contracts for the mother unit of proposed naphtha cracker-cum-polymer project at Panipat in this month.

The core project, divided in two packages, has received only two bids. The total bid value for the petrochemicals project is approximately Rs 11,900 crore. IOC had previously estimated the project cost at Rs 6,300 crore.

The scheduled date of commissioning is postponed by at least 14 months to March-April, 2009 as main bidders asked for a minimum of 35 months for project completion.

Total costs

Informed sources said the board of directors of the company at its last meeting held on April 28, has allowed IOC to award the contracts at a higher cost than the initial estimates. The board, however, is yet to finalise the total costs of the project.

"We are expecting to award the first contract for the mother unit by May 15," a senior company official said adding that Panipat would attract a lion's share of IOC's proposed capital expenditure of Rs 7,500 crore in 2006-07.

The project will have capacity to manufacture eight lakh tonnes per anum (tpa) of ethylene; 5.75 lakh tpa of propylene; 3.5 lakh tpa linear low density poly ethylene (LLDPE); 3 lakh tonnes of high density poly-ethylene (HDPE); 2 x 3,00,000 tonnes of poly propylene (PP) and 2.5 lakh tonnes of mono-ethylene glycol (MEG).

Having received the board approval for 15 million tonne Paradip refinery-cum petrochemicals project recently, IOC has started working towards commissioning of the project. The company has already received bids for technology licences and is expected to award PMC and EPC contracts by September, 2006.

"While project construction is expected to begin next fiscal, we are expecting an expenditure of Rs 500 to Rs 600 crore towards pre-construction activities like ground levelling, dredging and so on in 2006-07," a company official said adding that an identical amount has already been spent on land acquisition and site development.

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