Prime Minister Manmohan Singh assured support to the Rajasthan government in setting up a refinery at Cairn-operated Barmer oilfields raising speculation that the cabinet may include it as an additional condition for approving the USD 9.6 billion Cairn-Vedanta deal.
Rajasthan chief minister Mr Ashok Gehlot who met the Prime Minister confirmed that that Singh had assured his support to the refinery project. He said that "I have told him that the state has agreed to give all fiscal concessions besides making a 26% equity contribution.”
A cabinet minister said that "If Vedanta agrees for an equity participation in the proposed refinery it would certainly make the deal more acceptable, especially to the people of Rajasthan.” He, however, said that technically, approval to the Cairn-Vedanta deal and construction of refinery in Rajasthan were two different things but it could be discussed at the Cabinet Committee in Economic Affairs meeting.
Oil minister Jaipal Reddy had told reporters that the CCEA was soon expected to take a final view on Cairn-Vedanta deal based on a group of ministers' recommendations.
The ministerial panel chaired by finance minister Pranab Mukherjee has suggested CCEA to approve the multi-billion dollar deal only if Vedanta and Cairn agree certain conditions such as sharing $4 billion royalty burden in the Rajasthan block with partner ONGC as per a disputed contract. London-based Cairn Energy is awaiting the government's approval to sell a controlling stake in its Indian arm to Anil Agarwal promoted Vedanta Resources since August last year.
The Rajasthan government is in talks with the central government and ONGC for the refinery project. State chief minister said that staterun Engineers India Ltd had also pledged to pick up a 5% equity stake in the proposed Greenfield refinery.
The CM wanted the Prime Minister to persuade state-run ONGC to join the project as lead promoter with 69% equity stake. Mr Gehlot said that "Every major state has a refinery but Rajasthan has none despite producing crude oil in huge quantity. The western Rajasthan is extremely backward in terms of economic development so the (local) people must get the benefit of natural resources.”
An oil ministry official said that "ONGC's stand on the proposed refinery is consistent that economic viability of the project will depend on fiscal and other incentives by governments at the centre and state."
The official said that "Certainly, equity participation by Vedanta or Cairn would minimize risks (for ONGC).”
Spokesmen of Cairn and Vedanta declined comments on the refinery project. Gehlot said that the state government had accepted to grant all fiscal incentives to promoters of the proposed refinery as per the SC Tripathi committee recommendations. He said that "We are willing for further concessions after discussions with the promoters.” (sourced from ET)
Rajasthan chief minister Mr Ashok Gehlot who met the Prime Minister confirmed that that Singh had assured his support to the refinery project. He said that "I have told him that the state has agreed to give all fiscal concessions besides making a 26% equity contribution.”
A cabinet minister said that "If Vedanta agrees for an equity participation in the proposed refinery it would certainly make the deal more acceptable, especially to the people of Rajasthan.” He, however, said that technically, approval to the Cairn-Vedanta deal and construction of refinery in Rajasthan were two different things but it could be discussed at the Cabinet Committee in Economic Affairs meeting.
Oil minister Jaipal Reddy had told reporters that the CCEA was soon expected to take a final view on Cairn-Vedanta deal based on a group of ministers' recommendations.
The ministerial panel chaired by finance minister Pranab Mukherjee has suggested CCEA to approve the multi-billion dollar deal only if Vedanta and Cairn agree certain conditions such as sharing $4 billion royalty burden in the Rajasthan block with partner ONGC as per a disputed contract. London-based Cairn Energy is awaiting the government's approval to sell a controlling stake in its Indian arm to Anil Agarwal promoted Vedanta Resources since August last year.
The Rajasthan government is in talks with the central government and ONGC for the refinery project. State chief minister said that staterun Engineers India Ltd had also pledged to pick up a 5% equity stake in the proposed Greenfield refinery.
The CM wanted the Prime Minister to persuade state-run ONGC to join the project as lead promoter with 69% equity stake. Mr Gehlot said that "Every major state has a refinery but Rajasthan has none despite producing crude oil in huge quantity. The western Rajasthan is extremely backward in terms of economic development so the (local) people must get the benefit of natural resources.”
An oil ministry official said that "ONGC's stand on the proposed refinery is consistent that economic viability of the project will depend on fiscal and other incentives by governments at the centre and state."
The official said that "Certainly, equity participation by Vedanta or Cairn would minimize risks (for ONGC).”
Spokesmen of Cairn and Vedanta declined comments on the refinery project. Gehlot said that the state government had accepted to grant all fiscal incentives to promoters of the proposed refinery as per the SC Tripathi committee recommendations. He said that "We are willing for further concessions after discussions with the promoters.” (sourced from ET)
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