Ending years of speculation on the fate of the Barmer refinery, the Rajasthan government on Tuesday signed a re-worked MoU with HPCL to resume the big infra project, claiming the new deal would save the state over Rs 40,000 crore.
The project, envisaged to process the crude oil production from the Barmer basin, has reportedly overshot its cost from the original Rs 37,000 crore to Rs 43,129 crore. The refinery will be one of the first projects in the country to produce BS-VI fuel.
The reworked agreement, Chief Minister Vasundhara Raje said, would bring down the state’s financial burden from Rs 56,000 crore to about Rs 16,000 crore, saving the exchequer about Rs 40,000 crore compared to the previous MoU signed by the Ashok Gehlot-led Congress government in 2013.
The state’s equity in the project remains the same at 26 per cent, something that Raje’s negotiators were trying hard to increase. While the previous MoU pegged the state’s monetary support to the project at Rs 3,871 crore, Tuesday’s agreement brings it slightly down to Rs 3,738 crore.
However, what has brought down the state’s monetary burden is the reworked Viability Gap Funding. Under the previous MoU, the state was to pitch in Rs 3,736 crore as VGF for 15 years. The new deal brings this down to Rs 1,123 crore, the total proposed VGF now being Rs 16,845 crore compared to Rs 56,040 crore under the previous pact.
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