When there is an agitation going on in Andhra Pradesh over the insensitivity of the Central Government on the state, Central Government seems to be going back on the proposed petrochemical complex at Kakinada in Andhra Pradesh, a joint project of GAIL and HPCL.
The project seems to have hit a roadblock with the Centre asking the state government to pay 5000 crore upfront in the form of viability gap funding (VGF). It is obvious that the truncated state could not afford such huge amount.
The project has been mandated under Schedule XIII of the Andhra Pradesh Reorganisation Act, 2014. Interestingly, the Central Government has reduced the VGF of HPCL’s Barmer refinery in Rajasthan from 3736 crore to 1123 crore. But the center has ignored a similar request by the Andhra Pradesh government.
Center has been insisting on 5000 Crore upfront from Andhra Pradesh, a ploy to delay or deny the project. The 1.5 MMTPA petrochemical complex which is planned on a 2,000-acre site in the Kakinada Special Economic Zone is a 30000 Crore Project.
