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Journalism of Courage
MUMBAI, FEB 6: Essar Oil, the Ruia-owned company which is setting up the 15 mmtpa grassroot refinery at Jamnagar in Gujarat, has postponed the full commissioning of its refinery yet again to April 2000. The greenfield refinery was to be commissioned by June 1999 as per the company8217;s projection during the launch of its Rs 1,600 crore public issue in 1995.
quot;The plant will start working in phases by this year-end. By April next year, it will be fully commissioned,quot; said a company official. The target has been rescheduled, sources say, due to the devastating cyclones in Gujarat, which cost the project three months of delay and problems in tying up finances. The project is already suffering from cost overrun and the company has asked the financial institutions for more funds. In fact, in order to compel the promoters complete the project in time, the Industrial Development Bank of India IDBI has appointed lenders engineer for the Essar Oil project for which it has recently sanctioned a fresh loan of Rs 221crore to fund the cost overrun. In order to raise the much-needed funds, Essar Oil had earlier hived off its single buoy mooring port project in Jamnagar to its group company 8212; Essar Shipping. The port would be used by the company to import crude oil and export finished products.
The refinery8217;s output, as planned, will be marketed by IOC at prices determined by the Oil Coordination Committee on the basis of landed cost of import prices. Commissioning the Essar refinery after the delay may not affect the demand and supply situation in the first year of operation.
