New Ammonia-Urea Complex in Assam and Financial restructuring of BVFCL

News

• The Union Cabinet chaired by the Prime Minister, Shri Narendra Modi, today gave its approval for setting up of a new Ammonia-Urea Complex of 8.64 Lakh Metric Tonnes annual capacity with an estimated investment of Rs. 4500 crore at Namrup in Assam on Public Private Partnership (PPP) route by a Joint Venture (JV).
• In the proposed JV, a PSU of Department of Fertilizers namely Brahmaputra Valley Fertilizer Corporation Limited (BVFCL), Government of Assam and Oil India Limited (another PSU) shall have 11%, 11% and 26% equity holding respectively and balance 52% by private/public sector entity(ies) which would be inducted through a competitive bidding process.
• The annual consumption of Urea in the country is approx. 310 LMT, out of which 230 LMT is produced indigenously and rest is imported.
• To enhance the production of urea indigenously, Govt. has earlier approved the revival of Talcher (Odisha) & Ramagundam (Telangna) units of Fertilizer Corporation of India Limited (FCIL) by PSUs through ‘nomination route’ and Barauni unit of Hindustan Fertilizer Corporation Limited (HFCL) & Gorakhpur unit of FCIL through ‘bidding route’. These four units will produce about 52 lakh MT of urea annually.

Financial restructuring of Brahmaputra Valley Fertilizer Corporation Limited

• The Cabinet also approved the financial restructuring of BVFCL by waiving off entire cumulative interest (Rs. 774.61 crore as on 31.03.2015) till date accrued on GOI loans & a loan of Rs. 21.96 crore and conversion of GOI loans of Rs. 594.71 crore as interest free loan.
• It will enable the BVFCL to participate as 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.

Use

• The setting up of a new Ammonia-Urea Complex will meet the growing demand of urea of North-East, Bihar, West Bengal and Jharkhand. It will also ease the pressure on infrastructure due to long distance transportation of Urea from Western and Central Regions and thereby saving in govt. 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.
• The new plant will be highly energy efficient unit of international standard with latest technology and with same amount of natural gas available to the existing units, the production of urea from 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.
• Govt. would save about Rs. 600 crore annually due to reduction in cost of production and import substitution.
• 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.