The Chatterjee Group plans Haldia consolidation for Indian operations.

After settling the long-drawn dispute with the West Bengal government over the shareholding pattern in its flagship project, Haldia Petrochemicals Ltd. (HPL), Purnendu Chatterjee-owned The Chatterjee Group (TCG) has started consolidating itself in the state, making Haldia, a port city in West Bengal its stronghold in the country.

TCG has decided to set-up a refinery in Haldia at an investment of Rs 26,000 crore and has already floated a company, which will become the holding company for the new venture. For the project, it has acquired around 800 acres of land and has asked the state government to allot another 1,700 acres.

An official in knowledge of the plans said that TCG is yet to narrow down on the refinery capacity which may either be 15 million tonne (mt) or 30 mt but it will need huge tracts of land, preferably near the Haldia port to establish a township which will be part of the refinery project.

TCG became the flagbearer of industrialisation in West Bengal under the Left Front rule when it set up HPL during the 1990s. The idea to open a refinery and consolidate its presence in Haldia was conceived together with the plan. However, HPL ran into trouble with its consolidated losses stretching beyond Rs. 3,400 crore on account of stressed market dynamics and unavailability of working capital.

Thus while HPL took off with raw material assurances from Indian Oil Corporation, the idea of the refinery was left behind.

A senior company official said that the banks were hesitant to offer a loan restructuring package as its shareholding with the state government was disputed which worsened the situation.

“Amidst these concerns, the idea of the refinery was buried. Now that the issue of shareholding has been resolved and the financial condition improved, we can again relook at the refinery”, a senior HPL official said.

BS