Test for Naidu as BJP-ruled UP and Gujarat in race to bag big-ticket BPCL investment

Hyderabad: Andhra Pradesh Chief Minister N Chandrababu Naidu's image as a master at wooing investments will be put to the test as two other states—Uttar Pradesh and Gujarat, both ruled by the BJP—are in a race to bag state-run oil marketing company BPCL's proposed refinery project.

Sources in the oil industry said that BPCL will invest around Rs 50,000 crore in the project and is currently assessing locations in Andhra Pradesh, Uttar Pradesh, and Gujarat. BPCL's top brass, led by the company's CMD, G Krishna Kumar, met Naidu in Amaravati on Wednesday and held preliminary talks on the proposal.

The TDP is a key ally in the BJP-led NDA government at the Centre. Another state-run oil marketing company, HPCL, already operates an oil refinery in Andhra Pradesh at Visakhapatnam, also known as Vizag. HPCL's Vizag refinery, with an annual capacity of 8.3 million metric tonnes, is currently undergoing expansion to reach 15 MMTPA.

BPCL would be the first mega investment in Andhra Pradesh if Naidu's efforts bear fruit after he stormed to power in the key southern state of Andhra Pradesh last month.

During the discussions on Wednesday, BPCL's team hinted to Naidu that they would need at least 4,000 to 5,000 acres of land to set up the refinery. The Andhra Pradesh government, according to sources, may offer BPCL land in Machilipatnam, which also proposes a sea port, for the refinery's establishment.

Currently, BPCL operates three refineries in Mumbai, Kochi, and Bina in Madhya Pradesh, with a combined annual refining capacity of around 36 MMTPA, and the new proposed refinery may have a capacity of 12 MMTPA.

During his recent visit to New Delhi, Naidu had a discussion with the Union petroleum minister Hardeep Singh Puri on the investments by the BPCL in the state, and Wednesday's meeting with the BPCL representatives was a continuation of that discussion.

Naidu is said to have told the BPCL team that the necessary land would be allotted to the company within 90 days and asked the company representatives to come up with the detailed and necessary proposals for establishing the project. The company representatives informed Naidu that they would be back by October with the feasibility report.

During Naidu's earlier stint as CM, between 2014 and 2019, Andhra Pradesh pipped Gujarat in attracting big-ticket projects from Kia Motors. At the time, the BJP asserted that Prime Minister Narendra Modi's efforts led to the Kia Motors project in Andhra Pradesh, but it later emerged that the PMO exerted intense pressure on the Korean car manufacturer to establish the plant in Gujarat.

However, due to hectic parleys and lobbying by the Andhra Pradesh government, Kia Motors was offered various sops and agreed to set up its car manufacturing plant at Anantapur.

While Kia Motors initially chose Tamil Nadu to establish its car manufacturing plant because of the pre-existing ecosystem and the presence of numerous car manufacturing factories, the Korean auto giant ultimately chose Andhra Pradesh due to the politically volatile situation in the neighboring state at the time. At one point in time, Kia Motors also considered Gujarat. In fact, while Kia Motor’s first choice was Tamil Nadu, the second choice was Gujarat, and the third was Andhra Pradesh.