NEW DELHI, Jan 10 - In a fresh move to resolve the impasse on reviving the Namrup fertilizer plant, the Centre has decided to hand over the new urea plant to the Rashtriya Chemicals and Fertilizers (RCF), which will pick up 52 per cent stake in the project.
According to highly placed sources, after failing to attract private players for setting up an ammonia-urea plant at Namrup, the Union Ministry of Chemicals and Fertilizers has finalised a plan to hand over the plant to public sector undertaking RCF. A draft Cabinet note is being finalised which is likely to be circulated soon.
In May last year, the Centre had cleared a plan for setting up of the Rs 4,500-crore ammonia-urea plant at Namrup with a capacity of 8.64 lakh metric tonnes on a public-private partnership (PPP) basis via a joint venture. The Centre was in talks with the National Fertilizer Limited (NFL) and RCF for setting up the urea plant in Assam, after private parties expressed their reluctance to invest in it. The RCF recently accepted the proposal that has also been cleared by the Department of Fertilizers, said sources in the ministry.
According to the Centre�s proposal, the RCF will hold 52 per cent equity in the project. The proposal will soon be sent for Cabinet�s approval. �A draft Cabinet note is almost ready and will soon be circulated for inter-ministerial consultations,� confided sources.
In the proposed joint venture (JV), the Brahmaputra Valley Fertilizer Corporation Limited (BVFCL) and Assam Government were to have 11 per cent stake each and the Oil India Limited (OIL) 26 per cent equity holding. The remaining 52 per cent was to be with either private or public sector companies, which would have been inducted through a competitive bidding process.
According to sources, the Department of Fertilizers, the new plant will be energy efficient and produce more than double urea, compared with the existing units, while consuming the same amount of natural gas.
The BVFCL currently gets 1.72 mmscmd of gas for the present urea plant. It will require a total of 2.34 mmscmd of gas for the project expansion. Meanwhile, the department has written to the Ministry of Petroleum and Natural Gas for additional supply of gas.
Sources said that the Centre after waiting for over a year did not receive any response for expansion of the BVFCL plant. Hence, it has been decided to follow the nomination route for the project.
There have been preliminary discussions within the ministry regarding the fate of the project. Initially, it has been thought that profit-making PSUs, including NFL and RCF, may be roped in for the project expansion at Namrup, before the selection of RCF.
The new plant will cater to the growing demand for urea from the Northeast, Bihar, West Bengal and Jharkhand. It will also ease the pressure on infrastructure caused by long distance transportation of urea from western and central regions, leading to savings in the government subsidy on freight.
In May 2015, the Union Cabinet in an attempt to grant fresh lease of life to the Namrup fertilizer plant cleared the much-delayed financial restructuring of the BVFCL, besides sanctioning setting up of a new ammonia-urea complex at Namrup on PPP basis.
A Cabinet meeting, chaired by Prime Minister Narendra Modi gave its approval for setting up the new ammonia-urea complex at Namrup by a JV. The Cabinet also approved the financial restructuring of the BVFCL by waiving off the entire cumulative interest of Rs 774.61 crore accrued on the Government of India loans.