FIPB rejects Mittal's investment in HPCL refinery

NEW DELHI: Steel tycoon L N Mittal's plan to pick up 49 per cent stake in state-run HPCL's Bhatinda refinery has hit a roadblock with the Foreign Investment Promotion Board (FIPB) on Friday rejecting the proposal.
    
"The FIPB noted that the country needs more foreign direct investment in oil refining. But under the present policy FDI in public sector refineries cannot go beyond 26 per cent, so a decision was deferred," sources said.
    
Mittal, through his UK-based subsidiary Mittal Investments, had sought FIPB clearance to invest Rs 3,506 crore for 49 per cent stake in the Rs 17,983-crore refinery.
    
With the decision being deferred, HPCL-Mittal combine would have to wait till the government reviews the FDI policy.
    
The company has signed a joint venture agreement with Hindustan Petroleum Corporation Ltd. Earlier UK-based BP had terminated the MOU with HPCL to partner in Bhatinda refiney.
    
Around 1,993 acres of land has already been acquired at Bathinda for the project. The venture has also taken 230 acres on lease at Mundra in Gujarat for a crude oil terminal.

Land rights for putting the crude oil pipeline from Mundra to Bathinda (1,011 km) have been secured.

The refinery project, which has been in the pipeline for the last 10 years, was to be managed jointly by HPCL and Mittal Investments. Both the firms were to have equal number of directors and the chairman's position was proposed to be rotated.