The Haldia dream comes true

THE COMMISSIONING OF the Haldia Petrochemicals Ltd. (HPL) project in West Bengal conveys at least two major lessons. First, it shows how delays and obstacles tend to weigh down such major ventures; and two, it stands as a symbol of what a tireless Chief Minister can do to get the project of his dream. Never mind if it took all 23 years that Mr. Jyoti Basu has been Chief Minister of West Bengal. He was at least able to dedicate it to the nation before laying down office sometime next year after the next general election. The Rs. 5,170-crore joint venture project has faced every conceivable hurdle that a proposal possibly can. It took Mr. Basu 12 years to get it cleared by the Centre, in 1989, that too just before Rajiv Gandhi called a general election. His Congress(I) was also trying to claim credit for the HPL, which was essentially Mr. Basu's dream project. Then followed a game of musical chairs involving the private sector promoter and the State's Industrial Development Corporation. The Tatas came in, pulled out and finally offered to be a minority partner, holding just 14 per cent. It was left to Mr. Purnendu Chatterjee and his U.S.-backed fund management company to chip in with another 43 per cent to ensure that HPL was feasible.

For a project with such a chequered history, even in the matter of tying up the participation of financial institutions, it must be an achievement to commission the venture in just 38 months from the zero-date. Because of the time lag, the project cost has gone up twelve fold, from an initial estimate of a mere Rs. 428 crores. That is the lesson which all Governments must learn. Once a project is considered essential and viable, it must be cleared and launched as early as possible. It is this experience that is forcing foreign investors to think twice before they decide to venture into India. Especially because a petrochemical industry is investment-intensive and in the sensitive list of polluting units, transparent norms and simplified procedures alone can make sure that projects of this nature can get through the clearances and get started on time. At least in the future, the State Governments must identify areas where petrochemical as well as chemical industries can locate. Proximity to a port and enough area to set up downstream industries become pre-requisites for

such huge ventures. Unless the basic homework is done by the States, it will be futile to keep planning for such mega projects.

Even for West Bengal, the commissioning of the mother unit or the naptha cracker plant, marks only the beginning of the venture. The HPL by itself can bring little cheer to the State. It is the potential for downstream units which makes a petrochemical complex significant. For the huge investment that goes into the main project, the benefits can really multiply only when more and more downstream industries take shape. The objective must be to use all the products and by-products coming out of the mother unit and in turn adding value as well as generating additional employment. Mitsubishi Chemicals has already signed an MoU to manufacture PTA. All these must fit into an integrated development of Haldia as a hub, keeping in mind the capacity of the port, and also managing the environmental concerns. Despite his party's ideology and reservations, Mr. Basu had the vision to attract private investments to West Bengal. In HPL itself, the Soros fund is a part of the Chatterjee-Soros Fund Management Ltd. of the U.S. It remains to be seen if his hand-picked successor gains the stature and vision to pick up the threads and realise the economic potential of West Bengal. The partners of HPL must now ensure that they maintain high standards in productivity and quality control to provide all the raw materials and support that downstream units will need.

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