Consortium talks to revive Ramagundam urea plant

New Delhi (PTI): State-run National Fertilisers (NFL), Engineeers India Ltd (EIL) and Fertiliser Corporation of India Ltd (FCIL) are in discussion to form a consortium for revival of closed urea plant at Ramagundam in Andhra Pradesh with an investment of about Rs 4,700 crore.

FCIL's five plants, including Ramagundam one, have been closed since September 2002.

"Talks are going on with FCIL and EIL to revive Ramagundam urea plant. It is expected that the investment will be around Rs 4,700 crore," a senior official in the NFL said.

NFL and EIL could have 26 per cent stake each in the proposed special purpose vehicle (SPV), while FCIL might have 11 per cent stake, sources said. A strategic partner is likely to be roped in for the remaining 37 per cent stake, they added.

"The partners in the proposed SPV would bring in one-third of investment as equity while the rest would be funded through borrowings," the official said. The urea plant will have annual capacity of 1.27 million tonnes and will run on natural gas. The Board for Industrial and Financial Reconstruction (BIFR) de-registered FCIL on June 27, paving the way for the revival of its closed urea plants, after the government had approved the proposal to revive 5 closed units of FCIL at Sindri, Talcher, Ramagundam, Gorakhpur and Korba.

The government had also approved the waiver of loan and interest amounting to Rs 10,644 crore to FCIL.

Also, public sector firms, RCF, GAIL, CIL and FCIL signed a memorandum of understanding (MoU) earlier this month to form two separate joint ventures to revive FCIL's Talcher plant with the investment of Rs 8,000 crore.