Projects worth Rs 3,600 cr deferred

MUMBAI, FEB 28: The Public Investment Board has deferred clearance of three major fertliser expansion plans, involving an estimated Rs 3,...

MUMBAI, FEB 28: The Public Investment Board has deferred clearance of three major fertliser expansion plans, involving an estimated Rs 3,600 crore, following a difference in perception over urea import between the Planning Commission and the ministry of agriculture and fertilisers The three major plans include the Thal expansion of Rashtriya Chemicals amp; Fertilizers RCF, as well as Kribhco8217;s Hazira and Gorakhpur expansion projects. This has come as a major blow to the fertiliser industry8217;s expansion plan initiatives in the country considering that the current policy is anyway not conducive to expansion and growth, said a senior official of a public sector company.

According to industry sources, the clearances have been deferred as a difference of opinion between the planning commission and the ministry of agriculture and ministry of fertilisers has cropped up of the issue of whether urea should be imported or the industry should go in for a future build up of capacities. This block of three projects hadcome up before the PIB last week on a priority basis, said sources.

The planning commission is of the view that urea should be imported into the country considering that the international price is coming down. The ministry of agriculture and the department of fertilisers, on the contrary, believe that the international price trend is a seasonal fluctuation and the drop in the urea price in the international market is no indication of the future things to come.The ministry of fertilisers is in favour of increasing urea capacities in the domestic market, considering that to meet the target of doubling of the agriculture output, the country would require to double the fertiliser output as well. This, the ministry believes, would also help save foreign exchange outgo. With no convergent view emerging on the issue, the delay in clearances for the projects is likely to have a demoralising effect on fertiliser companies going in for expansions, industry experts feel.

RCF has applied for PIB clearance for settingup a third stream of urea-ammonia plant at Thal in Maharashtra. The investment plan was around Rs 1,200 crore in setting up additional capacities of 2,200 tpd of urea and 1,350 tpd of ammonia. The company secured the first stage approval for the expansion plan last year.

Kribhco8217;s expansion includes additional capacity of 7.5 lakh tonnes per annum of urea at Hazira.