Govt may approve only 4-5 proposals for increasing urea output

Government is likely to approve only 4-5 proposals out of 12 which were received from the urea manufacturers to increase domestic output by setting up new plants and scaling up capacity of existing facilities.
Under the New Investment Policy, which was notified in October this year, the Fertiliser Ministry has received 12 proposals from the fertiliser companies, and out of which two proposals are for setting up new units and rest for capacity expansion of existing plants.
"We will review all the proposals in January," Fertiliser Secretary J K Mohapatra told PTI.
Asked about the number of proposals to be approved, the secretary declined to comment.

Sources, however, said that a maximum of 4-5 proposals would be approved to make India self-sufficient in production of urea, which is still under the government control.
The Centre in April 2010 had decontrolled the phosphatic and potassic (P&K) fertilisers, like DAP and MOP, by giving freedom to manufacturers to fix prices.

At present, the annual domestic demand of urea is around 30 million tonnes, while the production is around 22 million tonnes. The gap is met through imports.
A panel of secretaries has been formed to take decisions on various issues related to the implementation of urea investment policy, including the approval of proposals for urea capacity expansion through greenfield and brownfield routes.

The panel is being headed by the Fertiliser Secretary and secretaries of Expenditure, Petroleum, Planning Commission and Agriculture are other members.
Under the policy, eight private companies including Zuari Agro Chemicals, Indo-Gulf Fertilisers, Chambal Fertilisers, Bharat Coal Chemicals and Nagarjuna Fertilizers and Chemicals Ltd have submitted proposals. Also, four PSUs -- Rashtriya Chemicals and Fertilizers (RCF), GNFC, GSFC and FACT -- have applied under the policy.
Private players are required to furnish bank guarantee of Rs 300 crore for each project, while the public sector firms are exempted from paying any bank guruantee.
Bank guarantees have been sought under the new policy to ensure that only serious players apply.

Besides these proposals, the government is also looking at revival of 2-3 closed state-run fertiliser plants.