The Punjab government Tuesday said it will disburse interest free loan of Rs 250 crore to HPCL and Mittal Energy Ltd (HMEL) promoters of 9 million tonne per annum oil refinery in Bathinda.
We have made a provision of Rs 250 crore in the state budget 2013-14…We will disburse it..hopefully when we are slightly in better shape (financially), Punjab Finance Minister Parminder Singh Dhindsa said Tuesday.
He said the loan disbursement would start from current financial year.
As per the deed of assurance signed on August 12,2005,between the Punjab government,HPCL and Mittal Energy Ltd (HMEL)- promoters of Bathinda refinery - the state government had agreed to grant interest free loan of Rs 250 crore per annum for the first five years amounting to Rs 1,250 crore at the end of each beginning from the date of commercial production.
Thereafter,the HMEL would start returning loan to the state government.
Prime Minister Manmohan Singh had inaugurated the refinery on April 28 last year. The commercial production of the refinery,although,started in December 2011.
Among other incentives,the state government had also agreed to defer the payment of Central Sales Tax (CST) to the maximum of 300 per cent of fixed capital investment for 15 years. It was also proposed that the refinery would be exempted from octroi or entry tax on all items including crude oil for a period of 10 years from the date of commencement of production.