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Gas Cracker will instil confidence in investors

Rabindra Nath Sinha

Naba Sharma

GUWAHATI, March 7

IN the generally gloomy scenario, comes the news that New Delhi succeeded on March 3 in sorting out the hitch between Oil India Ltd (OIL) and Reliance Assam Petrochemicals Ltd (RAPL) over liquidated damages for the much-delayed Assam gas cracker project (AGCP). Mr. Prafulla Kumar Mahanta, Assam's Chief Minister, is naturally happy at this development. Will AGCP act as a catalyst? Will Reliance now move fast? Will other industrialists make Assam their investment destination?

In an interview to Business Line at his residence here, a day after the last problem in regard to AGCP was resolved, Mr. Mahanta answered a wide range of questions. Excerpts :

When do you expect Reliance to start work on AGCP? The hitch over liquidated damages has been finally sorted out ....

Yes, at the meeting in New Delhi on March 3, held under the aegis of the Ministry of Petroleum & Natural Gas, OIL and RAPL were able to sort out the complex issue of liquidated damages. It's real good news for us. I think Reliance can start work on the v enture right away. Although the accord of March 3 provides that OIL and RAPL are to sign a document laying down the principles of the agreement by March 10 and a final agreement on or before April 14, these will be mere formalities. I am sure Reliance wi ll now move fast.

Will there be a designated State authority to coordinate matters with RAPL in the interest of speedy implementation of AGCP? After all, a new site, though not far off from the one determined earlier, has now been chosen ......

Reliance executives were members of the team that chose the new site, in deference to the objections raised by the Indian Air Force. The State's Industry Commissioner will coordinate with RAPL and other State agencies to see that execution of AGCP is smo oth.

What is the response to the State's efforts to attract entrepreneurs? Earlier, Dr. Manmohan Singh had allowed tax holiday for five years. Mr. Yashwant Sinha in his Budget for 1999-2000 extended the tax holiday period to 10 years. A free insurance cover f or a specified period for new entrepreneurs was also mooted ......

Yes, these incentives are there. The State's industrial incentive scheme, revised over a year ago, is also quite attractive. We have received some proposals. But, the persisting insurgency problem is preventing a breakthrough. The Assam gas cracker proje ct, I hope, will instil confidence in entrepreneurs, whether from within the region or from other parts of the country.

What steps have been taken by the Assam Government to facilitate resumption of production by the plywood industry?

The high-power committee is seized of the issue. I know several plywood companies, which had units in the State, had moved to other regions. We will help them if they have plans for scientific afforestation to meet their raw material requirements. They h ave to ensure that environment will not be disturbed. Indiscriminate felling of trees over the years had damaged the environment. As you know, the Supreme Court took a serious view of the situation.

What is the progress of land reforms?

We have been trying to do our bit. The tribal areas have seen little progress. We have now begun the process of distributing `pattas' to landless tribals. In the absence of `pattas', they have not been able to access institutional funds.

Has panchayati raj taken roots in Assam ?

We intend holding panchayat elections in October-November, after a gap of seven years. See, panchayats in Assam are not in a position to generate any revenue. That's a big problem for us.

How did you find the Budgets of Ms. Mamata Banerjee and Mr. Yashwant Sinha ?

Not much for us. We have been demanding the fourth bridge over the Brahmaputra at Dibrugarh (Bogibeel) and conversion of metre-gauge to broad-gauge of the stretch between Rangia and Murkongselek. The Railway Budget has little to inspire us; particularly in the context of the two demands. I don't see any reason to feel happy about Mr. Sinha's Budget too.

Do you support the PSU privatisation drive of the Centre?

I agree that the Government should not be in the business of running industries and business. But, public sector in our country is a reality for 50 years. The oil PSUs, for example. They have been doing well. I think the Centre can leave out the oil PSUs . I know the Centre has announced plans to privatise Indian Airlines. Jet Airways is earning good profits. IA too can earn good profits, if it is managed well. It has been largely a management problem in IA, particularly in recent years.

Do you find a change in the stance of the tea industry? A good number of social welfare and cultural schemes are being funded by them ......

Yes, some companies are doing that; not all of them. I would be happy if other tea corporates too join those who have already taken the initiative. The bigger ones among the tea companies should also lend a helping hand to small growers, who now constitu te a segment in Assam.

Do you see the possibility of an early dialogue with the ULFA top brass?

No. Because, they do not want to talk to us. They want to deal only with the Centre. But, ULFA activists in different parts of the State are surrendering, in batches. The number may not be large, right now. I hope this process will gather momentum. But, our problem is that we are not equipped to rehabilitate all those who are surrendering. I have sought the Centre's help in this regard.