Corporate Jan 8, 2013
New Delhi: Reliance Industries has applied to the government to de-notify over 40 percent of its Special Economic Zone in Gujarat as it plans Rs 45,000 crore projects in that area to cater to domestic market.
RIL's multi product SEZ is spread over 1,764.14 hectares. The company now wants partial de-notification of an area of 728.43 hectares, leaving 1,035.72 hectares of plan for the multi-product SEZ. Sources said that in the de-notified area RIL plans to invest Rs 45,000 crore in new projects that will cater to domestic demand.
"The developer has applied for partial de-notification so as to implement a number of new projects in the domestic tariff area (DTA) in Jamnagar near the SEZ. The proposed projects will mainly cater to the significant existing domestic demand," the Development Commissioner (DC) of the zone submitted to the board of approval for SEZs.
An inter-ministerial Board of Approval (BoA), chaired by Commerce Secretary S R Rao will consider RIL's proposal on January 18, sources said. RIL has stated in the proposal that it plans to invest Rs 45,000 crore in projects in the de-notified area.
A company spokesperson could not be immediately reached for comments. SEZ houses 580,000 barrels per day or 29 million tons a year oil refinery that exports fuel to far off countries like Venezuela and Mexcio, besides US and Europe. An adjacent 33 million tons older unit cater to the domestic market.
The DC has recommended that the de-notification be allowed subject to refund of all tax benefits the company had availed for operating units in the only-for-export zone. Billionaire Mukesh Ambani-led firm is investing over $12 billion in its core refining and petrochemical industries as output from its eastern offshore KG-D6 fields dips to an all time low of around 22 million standard cubic meters a day.
RIL is investing $8 billion, the most since it completed a second oil refinery in 2008, in expansion of its petrochemical business to meet rising demand of plastics and polyester. Also, it is setting up a $4 billion petroleum coke gasification project that will produce synthetic natural gas that will replace expensive LNG as fuel.
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