Petroleum, Chemicals & Petrochemical Investment Regions (PCPIR)

Petroleum, Chemicals & Petrochemical Investment Regions (PCPIRs) policy was launched in 2007 to promote investment in Petroleum and Petrochemical sector.

Salient Features of PCPIR Policy

• PCPIR is a delineated area of around 250 sq km for setting up manufacturing facilities for domestic and export oriented production. It has production units, public utilities, logistics, environmental protection mechanisms, residential areas and administrative services.
• A PCPIR is divided into processing area and non-processing area. The processing area must cover 40% of the total designated area (i.e. 100 sq. km) and should have manufacturing facilities, logistics and required infrastructure. The non- processing area can be used for residential, commercial and other social and institutional infrastructure.
• A PCPIR may include one or more Special Economic Zones, Industrial Parks, Free Trade & Warehousing Zones, Export Oriented Units, or Growth Centres. If any of these areas come under PCPIR, the benefits they were previously received will continue to receive.
• PCPIR may be a region declared by state governments under legislation or notification, however, land acquisition is not mandatory for the entire area. Further, government can also declare a PCPIR around existing industries & estates.
• Every PCPIR will have a refinery or petrochemical feedstock company as an anchor tenant.
• Internal Infrastructure will be built by a Developer or a consortium of developers. Outer linkages to the consortium would be provided by the Union Government and State Governments. External linkages mean external physical infrastructure linkages including Rail, Road (National Highways), Ports, Airports, and Telecom. This infrastructure will be created/upgraded through Public Private Partnerships to the extent possible. Central Government will provide the necessary viability gap funding through existing schemes. Wherever necessary, requisite budgetary provisions for creation of these linkages through the public sector will also be made.
• Government of India will constitute a high powered committee chaired by Cabinet Secretary to ensure expeditious approval and necessary co-ordination among the central ministries and the state governments.
• Identification of the site, preparation of the proposal and seeking the approval shall be the duty of the State Governments. The PCPIR area under the relevant Act will be notified by the State Governments. State Government will also acquire/ assist in acquiring the land necessary for setting up of the infrastructure, processing and non-processing areas.
• The application of the PCPIR will be moved by State Government. The state government will also be responsible for providing bulk requirements of water, road connectivity (state roads), Waste Treatments linkages, Infrastructure for health, safety and environment concerns.
• The nodal department for PCPIR is Department of Chemicals and Petrochemicals.
• The Management Board of the PCPIR will be created by the State Government under the particular state legislation. If the state legislation permits, the Board may be an Special Purpose Vehicle in a corporate form headed by a CEO with sufficient autonomy, with the participation of the Developer or Co-developers, as well as the anchor tenant. State Government will also constitute a supervisory body for monitoring and review.
• The Developer is a legal entity – Government, private or a Public Private Partnership- that develops, builds, designs, organises, promotes, finances, operates, maintains or manages a part or whole of the infrastructure and other facilities in the PCPIR. The Developer would be selected by the State Government/ Management Board through a transparent mechanism.
• The required land within the PCPIR will be made available to the Developer by the State Government, through the PCPIR Management Board, by way of a concession.
• A Co-developer will be a legal entity, which can be Government, private or a Public Private Partnership
• A unit located in PCPIR, whether in SEZ or elsewhere, may produce / export goods and services except those prohibited.
• A developer is free to exit the PCPIR after making due payments.

Fact sheet India’s PCPIRs

Petroleum, Chemical and Petrochemicals Investment (PCPIR) Policy is an infrastructure-driven policy. Please note that in the existing PCPIR, many anchor investors have only expressed their intent for investment but projects are taking a lot of time. The nature of the business is also time-taking.  Only Gujarat PCPIR has made considerable progress in the investment, where the company OPaL has gone ahead with investments. The Tamil Nadu PCPIR has been approved very recently.