NEW DELHI, May 21 � In a significant development that is likely to grant a fresh lease of life to the ailing Namrup Fertilizer, the Union Cabinet today cleared the much-delayed financial restructuring of the Brahmaputra Valley Fertilizer Corporation Limited (BVFCL), besides sanctioning setting up of a new ammonia-urea complex at Namrup on public-private partnership (PPP) basis.
The Cabinet meeting, chaired by Prime Minister Narendra Modi, gave its approval for setting up a new ammonia-urea complex of 8.64 lakh metric tonne annual capacity with an estimated investment of Rs 4,500 crore at Namrup on public-private partnership (PPP) route by a joint venture (JV).
In the proposed JV, the BVFCL and Government of Assam shall have 11 per cent equity each, while the Oil India Limited (OIL) will have 26 per cent equity holding, and the balance 52 per cent will be held by private-public sector entities, which would be inducted through a competitive bidding process, official sources announced after the Cabinet meeting.
The Cabinet also approved the financial restructuring of the BVFCL by waiving off the entire cumulative interest of Rs 774.61 crore accrued on Government of India loans. The package includes a loan of Rs 21.96 crore and conversion of Government of India loans of Rs 594.71 crore as interest on free loan. It will enable the BVFCL to participate as an equity partner in this project and will sustain the operation of the existing plants during the interim period till the new plant comes into operation, said sources.
The setting up of a new ammonia-urea complex will meet the growing demand for urea in the North-east, Bihar, West Bengal and Jharkhand. It will also ease the pressure on infrastructure due to long-distance transportation of urea from the western and central regions and thereby saving in government subsidy on freight. It will accelerate the economic development of the region. The proposed plant will open new avenues for the people of the North-east, sources claimed.
Sources said the new plant will be a highly energy efficient unit of international standard with latest technology and with the same amount of natural gas available to the existing units. Production of urea at the new unit will be more than double i.e., 3.6 to 8.64 lakh metric tonnes annually. With this, India is likely to start export of urea. The entire production of urea from this unit shall be neem-coated so that benefits of neem coating are available to the farmers of the north-eastern region also.
As reported, the process of restructuring the Namrup Fertilizer was initiated by the UPA government in 2013. However, it did not fructify. Out of three plants of the BVFCL, only two are functional, one at 50 per cent capacity and other at 100 per cent. The accumulated loss of BVFCL as on March 31, 2013 was Rs 811.11 crore and net worth was Rs 445.28 crore.
Both the OIL and Government of Assam have expressed willingness for having equity of 26 per cent and 11 per cent respectively in the project.
Meanwhile, Union Minister Sarbananda Sonowal, while welcoming the Cabinet�s decision, expressed his gratitude to the Prime Minister for clearing the project that was pending for long.