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Brahmaputra Cracker incurs cost overrun on Assam project

Brahmaputra Cracker incurs cost overrun on Assam project

Brahmaputra Cracker and Polymer incurred a cost overrun of more than Rs 3,400 crore on its Assam Gas Cracker Project (AGCP) because of inefficient pre-project planning, the government the Comptroller and Auditor General (CAG) of India said. The CAG said this in a report tabled in Parliament.

Brahmaputra Cracker and Polymer is a joint venture between GAIL (India), Numaligarh Refinery, Oil India, and the Assam government.

In April 2006, the government cleared AGCP at an estimated cost of Rs 5,461 crore and the Prime Minister unveiled the project in Lepetakata in Dibrugarh in April 2007.

The production capacity of 2.2 lakh tonne per annum of ethylene, however, was found to be sub-optimal because of lack of feedstock.

The Cabinet Committee on Economic Affairs (CCEA) approved the revised project cost of Rs 8,920 crore including a capital subsidy of Rs 4,960 crore in November 2011.

The 2.2 lakh TPA of ethylene production was lower than the minimum economic capacity of 3 lakh tpa for petrochemical industry as considered by the Government in 1989.

Also the maximum capacity of ACGP would be limited to 1.93 lakh TPA of ethylene only, which even was below than the projected capacity 2.2 lakh TPA.

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