HURL's fertiliser projects on track, production likely in 2021

The installation process of three natural gas-based fertiliser plants by Hindustan Urvarak and Rasayan Limited (HURL), a joint venture (JV)company of five PSUs, is on track and commercial production is expected to commence in 2021.

With a total estimated cost of around Rs 22,000 crore, the three ammonia-urea plants of 1.27 million metric tonne per annum (mmtpa) capacity each, are being set up at Gorakhpur in Uttar Pradesh, Sindri in Jharkhand and Barauni in Bihar.

In view of reviving closed fertiliser plants, the HURL comprising NTPC, Coal India, Indian Oil Corporation, Fertilizer Corporation of India Ltd (FCIL)and Hindustan Fertilizer Corporation Ltd (HFCL), was set up.

State Bank of India is the lead lender for financing the consortium and the three projects are financed by a debt- equity ratio of 75:25.

"Currently, construction works of all three projects are on track and the urea production is expected to commence at the beginning of 2021," Coal India said in its latest annual report.

Coal India, which holds 29.67 per cent stake in the JV, will pump in about Rs 1600 crore. Two other PSUs, NTPC and IOCL, also hold 29.67 per cent stake each while FCIL and HFCL collectively have 10.99 per cent share in the special purpose vehicle(SPV).

The turnkey contracts for the execution of the projects have already been awarded, sources said.

In addition to three projects, a 1.27 mmtpa plant is coming up by the end of 2019 at Ramagundam in Telangana, one of the five closed units of the FCIL and HFCL, which are being revived through greenfield investments involving newly-created public sector joint ventures.

Ramagundam Fertilisers and Chemicals Ltd is a JV of National Fertilizers Ltd, Engineers India and FCIL.

Meanwhile, Coal India is planning to spend Rs 10,000 crore as capital expenditure for current fiscal.

Besides reviving the fertiliser plants, the coal behemoth also plans to invest a substantial amount in various projects such as solar power, acquiring coking coal assets in Australia and Canada, coal gasification, coal-bed methane, rail wagon procurement during the fiscal 2019-20.

CIL had said it would spend Rs 700 crore for procuring rail wagons.