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Saturday, April 28

UPSC GK: Understanding West Coast Oil Refinery Politics (ECONOMICS)


The Indian Express explains the politics behind the latest standoff between Maharashtra’s ruling coalition partners, now over a project in Konkan.

What is the project at the centre of the latest conflict between the Shiv Senaand the BJP?

The Shiv Sena is protesting against the West Coast Oil Refinery, proposed to be the country’s biggest, at Nanar village in Ratnagiri district. Shiv Sena president Uddhav Thackeray declared at a public rally that the party will not allow the project in coastal Konkan. The Sena alleges the project will lead to environmental hazards, is being imposed on villagers against their wishes, and will help rich individuals from outside Maharashtra who have brought large plots of land in Konkan. Uddhav Thackeray has dared Prime Minister Narendra Modi and Chief Minister Devendra Fadnavis to take the project to Gujarat or Vidarbha if they want to.

How big is the project?

The proposed capacity is 60 million tonnes per annum, over 70% more than the 35 million tonnes (as of January 1, 2017, according to Petroleum Planning & Analysis Cell) of Jamnagar, currently India’s biggest refinery. The proposed investment is Rs 3 lakh crore and the project has an employment potential of one lakh. The oil refinery is proposed to be promoted by three public sector units — Hindustan Petroleum (HPCL), Bharat Petroleum (BPCL) and Indian Oil (IOC). IOC is the lead partner with 50% while HPCL and BPCL will hold 25% each. On April 11, 2018, an MoU was signed between the three PSUs and Saudi Aramco to develop the integrated refinery and petrochemicals complex in Konkan.

How and when did the government choose Konkan?

The decision was taken in December 2015. The Centre had three options — Maharashtra, Gujarat and Tamil Nadu; Maharashtra urged the Centre to consider the state.

How has the BJP reacted to the Sena allegations?

The BJP has argued that the apprehensions of environmental hazards are misplaced as the greenfield project will have advanced technology. It has also questioned why the Sena never objected to the nuclear power station, or the oil refinery existing in Mumbai for several decades. The BJP-led central and state governments have conveyed thrice to Shiv Sena leaders, through various forums, that they will not scrap the refinery project. In Maharashtra, the government has refused to denotify the process of land acquisition of 16,000 acres for the refinery. It has told the Sena that the final decision rests with a high- powered committee headed by the chief secretary and the chief minister. Last year, Prime Minister Modi had explained to a delegation led by Sena MPs that projects such as the Jaitapur Nuclear Power Plant and the West Coast Refinery with larger national and international implications are not driven by ad hoc decisions.

Politically, where is the conflict heading?

On April 6, after BJP president Amit Shah expressed willingness to form a pre-poll alliance with the Sena for the 2019 Assembly and Parliament elections, the Shiv Sena rejected the idea. While they continue to be coalition partners, the two parties have been in constant conflict which could escalate ahead of the polls. Over the last three-and-a-half years, the coalition has seen the Sena attacking Modi and Shah on various issues from government policies such as demonetisation to the BJP’s treatment to NDA partners. In Maharashtra, Uddhav Thackeray and Fadnavis have faced off in successive local body polls, and the Sena has been criticising its partner on issues such as Maratha reservation and farmers’ suicides.

So, the refinery is just another standoff in a series?

In fact, Konkan is particularly significant. The Sena has always been strong in Konkan and sees the mega project as an attempt by the BJP to gain a foothold in in the region. It has been aggressively mounting the plank of sons-of-the-soil in Konkan to counter the BJP’s development plank. It also wants to upstage Narayan Rane’s newly formed Maharashtra Swabhiman Party, which has gained ground in local body elections in Konkan.

How strong is the Sena in Konkan?

Konkan comprises the districts of Ratnagiri-Sindhudurg and Raigad, with two Lok Sabha seats and 12 Assembly seats. In the 2014 polls, the Sena contested and won both Lok Sabha seats. In the Assembly polls, when the two parties fought separately, the Sena won 6 of the 12 seats, with the rest going to the NCP (3), the Congress (1), and the PWP (2).


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Image Credit: The Economic Times

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