Private Petrochem Firms Owe $4b to NPC

Private Petrochem Firms Owe $4b to NPCPrivate Petrochem Firms Owe $4b to NPC

Privately-owned Petrochemical complexes have a $4 billion debt to the oil ministry, said deputy oil minister and managing director of the National Petrochemical Company (NPC).

"The settlement of NPC dues should not hamper the operations of petrochemical projects" IRNA quoted Abbas Shari-Moghadam as saying.

The government can offer loans with reasonable interest rates to help investors expand production and subsequently refund the NPC through sales of their products, according to Shari-Moghadam.

Inefficiencies in privatizing petrochemical complexes and closure of the Plan and budget Organization (PBO) caused several industrial projects to come to a halt.

Commenting on the debts to the NPC, the deputy oil minister Seyed Kazem Vaziri Hamaneh, also said that a committee to draft a repayment plan should be set up.  The committee will comprise representatives of NPC, the ministry of economic affairs and finance, the privatization organization, the vice-presidency for strategic planning and supervision, and other relevant organizations.

"Petrochemical complexes and projects under construction should not be placed under pressure to refund NPC. Resorting to taking legal procedures will hamper the development of petrochemical industry," Hamaned added. Several petrochemical projects due for completion in the Fifth Five-Year Economic Development Plan (2011-2016) have been postponed to the 6th plan (2016-2020), with a further 67 contracts holding a capacity to yield 60 million tons, yet to be completed. The NPC guaranteed investment of domestic and international firms in the petrochemical industry through investment laws since 2011, which protected the investors and flourished the industry. However, implementation of Article 44 of Iran Constitutional Law "put an end to NPC's support," according to Shari-Moghadam.

Article 44 is designed to help open new opportunities to the country's private sector and boost privatization.

Shari-Moghadam insisted that the NPC is pursuing private sector support in line with the 'economy of resistance' policy to counter the sanctions, promote domestic growth and reduce consumption, proposed by the Leader of the Islamic Revolution Ayatollah Seyyed Ali Khamenei.

He added that the NPC's strategic framework contributes to meeting the petrochemical industry's objectives as set out in the country's 20-Year Vision Plan.

In 2002, Iran's Expediency Council approved the 20-Year Vision Plan to promote the country's position in national, regional and international levels in which Iran becomes a developed country in twenty years, with the first economic, scientific and technical stand in the region. Mohammad-Hossein Peivandi deputy managing director of NPC also said allocation of $5 billion from the National Development Fund of Iran (NDFI) can be  used as collateral at domestic and international banks, as well as guaranteeing the NPC.