CIL board gives nod to form JV for reviving Talcher urea plant

Consortium of RCF, GAIL, CIL and FCIL will invest Rs 8,000 crore for the revival of urea plant

State-run Coal India Ltd's (CIL) board today gave an in-principle approval to form joint venture for reviving fertiliser firm FCIL's closed urea plant at Talcher in Odisha at a cost of Rs 8,000 crore.

"The CIL board in its meeting has agreed in principle to form joint venture for the revival of Talcher urea plant," sources said.

The consortium of Rashtriya Chemicals Fertilisers (RCF), GAIL, CIL and FCIL will invest Rs 8,000 crore for the revival of urea plant at Talcher with a production capacity of 1.2 million tonnes per annum.

Fertiliser Corporation of India Ltd (FCIL) had signed a memorandum of understanding (MoU) with Rashtriya Chemicals and Fertilisers (RCF), Gail and CIL in September last year for revival of this plant, which was closed in 2002.

The MoU was signed to form two separate joint ventures to revive this plant and also build a power plant and coal washery facility at the site. The project is expected to be commissioned by 2017.

In September 2013, Fertiliser Minister Srikant Jena had said that the first joint venture would be for upstream coal gasification with GAIL having major stake. The second JV would be for urea-cum-ammonia nitrate complex with RCF and CIL having major stakes.

According to the senior officials, RCF and CIL will have around 42 per cent stake each in JV for downstream. GAIL will have 5 per cent stake and rest would be with FCIL.

In the upstream JV, around 80 per cent stake will be held by GAIL and about 10 per cent stake will be with the technology provider of coal gasification. The rest would be with FCIL.

The government had approved revival of 5 closed units of FCIL at Sindri, Talcher, Ramagundam, Gorakhpur and Korba. The Centre had also waived loan and interest amounting to Rs 10,644 crore to FCIL.

That apart, the Board for Industrial and Financial Reconstruction (BIFR) had de-registered FCIL, paving the way for the revival of its closed urea plants.