Kalinga News Network
New Delhi: The Indian Oil Corporation Limited (IOCL) and Odisha Government signed a fresh Memorandum of Understanding (MoU) ending the long running row over the IOCL Refinery at Paraddip.
According to Union Petroleum Minister Dharmendra Pradhan, the two parties signed the new pact last night.
As per the agreement, the Odisha government offered viability gap funding (VGF) of Rs 700 crore per annum as interest free loan for 15 years. Sanjiv Sing, Chairman, IOCL, however, stated that IOCL may not agree to a VGF below Rs 1,000 crore per annum.
“The viability gap funding for the Paradip Rerfinery Project will be revised to Rs 700 crore per annum payable in the form of interest free loan in each quarter. The repayment of the amount will start in 16th year from each installment,” said a press release issued by the IOCL.
The VAT collected but not paid for the years 2015-16, 2016-17 and 2017-18 will be deposited by IOCL immediately, added the press release.
The Odisha government, which agreed to waive interest/penalty for the VAT withheld by IOCL, will provide interest free loan to IOCL for the financial year 2016-17 and three quarters of financial year 2017-18 by December, 2017, January 2018 and every quarter thereafter.
A joint petition will be filed in Orissa High Court by the two parties informing the Court about the agreement.
In a big jolt to Indian Oil, the Odisha government had on February 26 withdrawn the tax incentives given to the ₹34,555-crore Paradip refinery, making the company reconsider its plans to invest another ₹52,000 crore in the state.