RCF to go ahead with revival plans for HFC, FCI plants
June, 03rd 2008
The department of fertilisers (DoF) has asked the Rashtriya Chemicals & Fertiliser (RCF) to go ahead with the pre-project and pre-investment activities for the revival of Hindustan Fertiliser Corporations (HFC) Durgapur plant and Fertiliser Corporation of Indias (FCI) Talcher unit. The DoFs move comes in the wake of its decision to provide budgetary support for the revival of seven fertiliser units of HFC and FCI. FE broke the story in this regard, last week.
Sources told FE that the pre-investment activities include updating the techno economic feasibility report (TEFR) to current the level, with respect to costs and policy parameters of the new urea pricing scheme and submission of the TEFR for pre-investment board (PIB)/Planning Commissions in-principle approval. RCF has already increased its borrowing limit to Rs 7,000 crore from Rs 2,000 crore, considering an investment of Rs 6,800 crore (Rs 3,400 crore each) for the revival of Durgapur and Talcher units.
However, for finalising the TEFR, RCF would like to know from the DoF, whether, based on current status, the availability of gas for the two units would be possible within 3 to 5 years by December, 2011. Besides, the company wants an assurance letter from GAIL India and Reliance Industires for the gas supply.
For financing the projects, a JV approach would be followed by which RCF would pick up a 51% stake, while a private partner would hold the rest of the equity. For waiver of liabilities of the two units, RCF has sought the DoFs intervention so that necessary sanctions can be obtained.
The DoF would also look for the restructuring of public enterprises and high courtswhere the closure of these two units is pending. RCF also hopes that urea pricing and the policy for the revival of old units would be notified soon.