Bharat Petroleum Corporation (BPCL), India’s state-run oil refining and petrochemical giant has announced temporary halt in the construction activities related to the upcoming Polyol plant at its Kochi Refinery worth INR 1,11,300 million. The company presumes that it is wiser to wait for the outcome of privatization before the further execution of any new projects.
The Polyol project of BPCL is being constructed on 170 acres of land adjoining its refinery that it had bought from FACT Ltd., India’s renowned fertilizer and chemical manufacturing company. The construction activities on the project including the construction of a road underpass required to link the project site with the Kochi refinery have been put on halt after the initial levelling work of land. Along with this, the selection process of the technology licensor has also been suspended in the mid-way.
Kerala government showcased concerns over the uncertainty hovering over the Polyol plant, as its idea of the petrochemical park which will be utilizing the niche chemical derivatives from the Polyol plant and Propylene Derivative Petrochemical Project (PDPP) is appearing under shadows till the divestment of BPCL. The government even raised concerns on the privatization of BPCL, as it could marginally devalue the upcoming investments associated with the company. However, the PDPP plant worth INR 52,460 million, scheduled to be commissioned by February 2021 has provided a ray of hope to the downstream investors that are dependent on the plant output in the near-term.
ChemAnalyst predicts that the temporary suspension of the construction activities of BPCL’s Polyol plant is likely to hinder the plans of the Kerala government, as it can lay a massive impact on the government's vision to revive the sputtering economy by captivating heavy revenues in the petrochemical sector.