New Delhi: A day after she met Prime Minister Manmohan Singh, Tamil Nadu Chief Minister J Jayalalithaa has managed to return home with a Rs 1 lakh crore gift for her state.

An inter-ministerial group led by the Cabinet Secretary cleared the country’s first Petrochemical and Petroleum Investment Region in Tamil Nadu.

DMK leader and Union Minister for Chemicals and Fertilisers, MK Alagiri is likely to keep the proposal of the first mega investment project in Tamil Nadu before the Cabinet soon.

Nagarajuna Oil Corporation will be a major investor in the project, which will set up a refinery with production capacity of 60 lakh tonnes. Chennai Petro is likely to be the second biggest investor in the project.

Observers believe that Jayalalithaa was able to strike the deal with PM as the Petrochemical and Petroleum Investment Region is one of the dream projects of Manmohan Singh.

Notably, the PM, after his US visit in his previous tenure, had planned large scale investment in this sector.

The highly acclaimed petro project will be established on 25,683 hectare land situated at Cuddalore and Nagapattinam district of Tamil Nadu, whose 40 percent area will be utilized for production units.

It may be noted that the Cabinet Secretariat has already asked for proposals regarding investment and execution procedures.

The project will get an SEZ status to provide all kinds of tax benefits to the new project, for which Centre has assured a budgetary support of Rs 4,200 crores.

The entire project would include construction of roads and other infrastructural development in the petro region. In addition, the rail route between Villupuram and Mayiladuthurai will also be electrified.

The Central government will also grant financial help of Rs 600 crores for the viability gap funding of the project apart from providing Pollution Monitor Controllers and Water Purification Plants.

The investment which Nagarjuna oil has already done in the petrochemical sector will be a part of the investment in this project. The company has already invested Rs 4,500 crore in petro chemical projects and is expected to invest Rs 5,000 crore more by 2012.

Sources suggest investment from Chennai Petro is in limbo as the land allotted to them lies outside the proposed petro region. However, Jayalalithaa government has assured Chennai Petro that it will be part of this mega scale project.

JPN/Anshuman Tiwari