The deed, which was sent to the state government by the HPCL, principal investor in the project about a week ago, was discussed in detail at a meeting held under the chairmanship of the Chief Secretary, Mr Jai Singh Gill, on Friday. All senior officers concerned, including Principal Secretary for Industries, Mr S.C. Aggarwal, Director, Industries, Mr Sanjay Kumar, and others were present at the meeting. All points of the deed were discussed in detail. Senior officers of the HPCL were also present at the meeting.

“We are preparing a memorandum regarding the revised deed and it will be presented before the Council of Ministers for approval on January 28,” said a senior officer of the state government on the condition of anonymity. He said that there were some “ if and buts” in the deed draft which required to be settled with the HPCL by making modifications here and there. Otherwise, the deed in its existing form is acceptable to the state government.

Informed sources said that the Punjab Council of Ministers would be having no alternative except to accept the revised deed because the HPCL has diluted the concessions, promised to it earlier, on the direct intervention of the Prime Minister, Dr Manmohan Singh. The HPCL had already made up its mind to shift the project to Rajasthan, the state government of which has offered to give all concessions sought by the HPCL. In fact, the Rajasthan Government has issued threats against the reviving of the refinery project at Bathinda, ignoring the claim of that state where oil reserves have been found in plenty. However, with the intervention of the PM, Punjab succeeded to renegotiate the conditions with the HPCL to retain it.

In the revised deed, there is a condition to defer the sale tax — with maximum upper limit of Rs 250 per annum — for five years. According to an earlier condition, that was accepted by the previous Akali Government headed by Mr Parkash Singh Badal, but was rejected by the present government headed by Capt Amarinder Singh, the deferment of the sales tax was for 15 years with an upper limit of Rs 600 crore per annum. By way of revised deed, as has been claimed by the officers concerned, the state government would be “saving” Rs 7750 crore.

However, there are officers who differ with this claim of the state government. They say that there would be only saving of interest on the total amount which was earlier to be deferred for 15 years and now it is to be deferred to 5 years. It would be a few hundred crores and not in thousand crores. Moreover, the project, which was to be completed by next year, would now be completed by 2009, a period considered too long in a country like India, which has pegged its growth rate around 7 per cent, that is only attained by a few select countries in the world.

Only after the approval of the Council of Ministers, the acceptance regarding the deed would be intimated to the HPCL authorities concerned. The refinery project, the foundation stone of which was laid by the then Prime Minister, Mr Atal Behari Vajpayee, in November, 1998, has been hanging fire since then. The initial investment in the refinery was projected Rs 16,000 crore by the HPCL and Mr Badal.

However, later it was stated that the project was worth Rs 13,000 crore only. Now the HPCL, which has brought down its capacity from the original 9 million tonne to 6 million tonnes, says that the project would come up with Rs 9,000 crore.