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Delhi govt notifies new oxygen policy

The Delhi government has notified a policy to make the city-state self-reliant in the production of medical oxygen to meet any crisis or emergency as the one that arose during April-May when an unprecedented rise in the number of oxygen-dependent Covid-19 patients witnessed city hospitals running out of the life-saving gas.

The Medical Oxygen Production Promotion policy, 2021, was approved by the Delhi Cabinet on August 3. Under the policy, private enterprises which will invest in production and storage of medical oxgyen will receive subsidies on aspects such as production, transport, storage capacity and power consumption. They will also get full reimbursements on state GST and stamp duty.

The gazette notification was officially issued on Thursday, August 19, said the document, a copy of which HT has seen.

The document said, “The ongoing Covid-19 crisis fuelled by new 2021 strain of the virus has put enormous pressure on existing healthcare infrastructure, including medical logistics, in the NCT of Delhi. A large number of Covid-19 patients need oxygen support at hospitals and at homes. This sudden increased demand coupled with negligible oxygen production in the state has necessitated dependence on resources outside Delhi. As the number of patients requiring oxygen support increased in a short span of time, the pressure of supply of medical oxygen to hospitals was significantly strained due to notable delay in movement of oxygen from outside Delhi. Though the present situation is better, a similar crisis may re-occur in future and it is needed to be better equipped to manage such a situation in future.”

The notification document said that the objectives of the policy are “to make Delhi self-reliant in terms of medical oxygen production and supply” which the government aims to achieve by encouraging the setting up new manufacturing enterprises and expanding the production capacity of existing ones for “uninterrupted oxygen supply” to hospitals and nursing homes, and “to facilitate storage and transportation of medical oxygen in Delhi”.

Delhi witnessed an unprecedented surge in Covid-19 cases earlier this year, which left the healthcare infrastructure in the city overwhelmed. At its peak, Delhi added a daily average of 25,294 new Covid-19 cases for the week ending April 23. A severe crisis of medical oxygen turned the situation worse. While the Capital’s demand was around 700MT per day, it received between 300 MT – 500 MT for around 10 days even as it witnessed the worst of the wave. In usual times, Delhi’s oxygen consumption on a daily basis is about 250 MT, senior government officials said.

Oxygen was sourced to Delhi from plants in several states that include Uttar Pradesh, Haryana and Odisha. The distribution task across India was taken over by the central government under laws concerning epidemics. The same period witnessed incessant distress calls from hospitals and individuals and multiple instances of friction involving the Aam Aadmi Party (AAP) government in Delhi, the Centre and governments in neighbouring states, mostly over logistics and movement of medical oxygen.

The policy notification document said the government has broadly set five targets: Setting up of liquid oxygen (LOX) manufacturing facilities of minimum 50 MT (metric tonnes) capacity up to a total of 100 MT; Setting up of non-captive oxygen generation plants of minimum 10 MT and maximum 50 MT capacity up to a total of 100 MT; Setting up of captive oxygen generation plants of minimum 500 LPM (litres per-minute) capacity at hospitals and nursing homes to cater to their peak demand for medical oxygen up to a total capacity of 200 MT; Setting up of cryogenic tankers of minimum carrying capacity of 10 MT for the exclusive purpose of ferrying liquid medical oxygen up to a total capacity of 500 MT; Setting up of liquid medical oxygen storage tanks of minimum 10 MT capacity up to a total capacity of 1000 MT.

The oxygen generation plants will either be pressure swing adsorption plants (PSA) or those using the air separation unit (ASU) technology, said the government.

The document said, for liquid oxygen manufacturing plants, non-captive cryogenic plants and PSA plants for hospitals and nursing homes, the applicant will be eligible for a one-time subsidy of ₹20 lakh per metric-tonne capacity; for cryogenic tankers they will be eligible for one-time subsidy of ₹3 lakh per metric-tonne; And there is one-time subsidy of ₹1 lakh per metric-tonne on liquid medical oxygen storage for hospitals, nursing homes and re-fillers.

To avail the incentives, liquid oxygen plants have to be commisioned by December 31, 2022, non-captive cryogenic plants by March 31, 2022, PSA plants for hospitals and nursing homes have to be commissioned by December 31, 2021, cryogenic tankers have to be registered in Delhi by December 31, 2021, and liquid storage facilities for hospitals, nursing homes and re-fillers too have to be easy by the end of this year, said the notification document.

Power subsidy will be given to liquid oxygen generation plants and non-captive oxygen generation plants (PSA/ASU) at ₹4 per unit consumed in the manufacturing process for the first five years from the date of commencement of commercial production. Full reimbursement of gross SGST will be made to liquid oxygen generation plants and non-captive oxygen generation plants (PSA/ASU) within a month of commissioning of the plant, said the notification document.

It also assures full reimbursement on stamp duty paid for purchase of land for medical oxygen generation plant or non-captive oxygen generation plant. Also, if the same enterprise is into producing industrial oxygen, they will not be disqualified. But enterprises availing the incentives have to assure that they operate for at least five years.

The document said, the government will invite applications for grant of subsidies and incentives under the policy within 15 days of its notification. If the applications exceed the target capacity, then there will be a lottery to select eligible applicants up to the full target capacity. Hindustan Times