• PAGE ONE
• INDEX
• HOME

Essar gets IDBI nod to resume Vadinar project

Our Bureau

MUMBAI, Nov. 29

DECKS have been cleared for Essar Oil to resume work on its 10.5-million-tonne Vadinar refinery project in Gujarat, with IDBI - one of its institutional lenders - giving Essar the go-ahead.

At a meeting on Thursday, the IDBI board is understood to have finally cleared the Essar proposal, subject to certain conditions.

However, officials from IDBI and the Essar group were unavailable for comment on what these conditions are.

Work at the Vadinar refinery site was suspended in 1999 when financial institutions asked the promoters to bring in additional equity capital as a condition for the release of additional funds.

ICICI, another lending institution, has already cleared the proposal.

The revised project cost is Rs 8,000 crore. This is to be funded by a debt of Rs 5,852 crore and equity of Rs 2,184 crore.

The project's EPC contractor, ABB, is providing deferred credit of $43 million and a bridge loan of $48 million.

According to Essar Oil, 64 per cent of the project has been completed at a cost of Rs 6,300 crore. Machinery worth $430 million has already been procured.

The company has said that it would be able to complete the work within 18-24 months.

It may also receive Rs 269 crore against insurance claims apart from material damage of Rs 30 crore as part of damage caused by cyclone.