A special economic zone (SEZ) anchored by a 15-million-tonne refinery and petrochemical plant, a fertiliser plant, captive ports, shipbuilding and rig-servicing yards are a few of the industrial projects planned in Kakinada, on the Coromandel Coast in Andhra Pradesh.
The total investments in the town could go well above Rs 50,000 crore, according to local government officials. Oil and Natural Gas Corporation (ONGC), the country’s largest exploration and production company, is planning to spend close to Rs 26,000 crore to set up a refinery and petrochemical complex in the Kakinada SEZ. It has already acquired 8,000 acres of land for an SEZ, for which it will also be the developer.
The petrochemical plant it plans to set up in the SEZ will receive gas from Reliance Industries’ gigantic D6 block in the Krishna-Godavari basin.
“It is around the RIL gas that all of these industries will come up. Kakinada, which got its first and only industry in the form of two fertiliser plants in the early 1990s, will now see this huge spurt in industrial growth,” said a official from the local administration.
The town will also be co-host to a petroleum, chemical and petrochemical investment region (PCPIR) which is projected to attract investments of over Rs 2 lakh crore.
“The proposed investment in PCPIR, running from Visakhapatnam to Kakinada, is only for onshore areas. Similar investments are likely to be made in oil and gas exploration and production work in the offshore area of the Krishna-Godavari basin,” said M Veerabrahmaiah, joint collector and additional district magistrate, Visakhapatnam.
Much of the investments in Kakinada are expected to be made by Reliance itself. According to sources, the company plans to acquire the two existing fertiliser plants in the town.
One plant, operated by Nagarjuna Fertiliser and Chemicals Ltd (NFCL), produces urea while the other, operated by Godavari Fertiliser and Chemicals Ltd (GFCL), produces phosphatic fertilisers. Although an NFCL official at Kakinada said the plant was not up for sale, an RIL official said the company was increasingly inclined towards making an offer for the two plants.
A port, operated by Kakinada Seaports Ltd, is also likely to be taken over by the Mukesh Ambani-promoted company. “It is the only weak link in the entire chain of gas production from the D6 block. If we can manage to take over the port, the risk of the chain breaking will minimise,” the RIL official said.
RIL had earlier wanted to build a berth for its captive use for loading offshore supply vessels which feed its exploration work in the K-G basin. It currently operates from a dedicated jetty at the port, for which it pays Kakinada Seaports Rs 95 lakh per month. Kakinada Seaport’s chief operating officer Surya Prakash Gutta said the company would sell for a price of Rs 500 crore. The two fertiliser plants are located adjacent to the port.
The Kakinada district administration official said the various companies such as construction firm Larsen & Toubro and Dubai Ports are interested in building a shipbuilding yard in the Kakinada coast. “The yard will also service the rigs which the oil companies use for drilling in the seas,” the official said.
Rigs, which need to be serviced every 3-4 years, have currently been sent to Dubai and Singapore for servicing. The official says investment in building a single shipyard could be to the tune of Rs 4,000 crore.
All of this has resulted in zooming land prices in this Pensioner’s Paradise, the name by which Kakinada is also known. “The price of land has almost doubled over the last couple of years. Cost of living has increased manifold,” Gutta said.
Employment is also on the rise in Kakinada. “That is one of the major ways in which the local people are benefiting,” Tatavarty Srinivasa Rao, a social activist in Kakinada, said.
The man, who protested the privatisation of the Kakinada port 10 years ago, adds: “It gives great potential for industry and training.”
Source: Business Standard
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