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NTPC, Coal India, Others In Rs 20,000-Crore Venture To Revive Mothballed Fertiliser Plants

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NTPC, Coal India, Others In Rs 20,000-Crore Venture To Revive Mothballed Fertiliser Plants

India produced 24.5 million tonnes of urea in the financial year ended March 2016, but also imported 8.5 million tonnes to boost productivity at its farms.


New Delhi: Cash-rich state-run coal, power and oil firms will jointly invest nearly $3 billion (around Rs 20,300 crore) to revive three mothballed fertilizer plants, a government official said on Tuesday, as the country aims to increase local production of crop nutrients and cut imports.

India produced 24.5 million tonnes of urea in the financial year ended March 2016, but also imported 8.5 million tonnes to boost productivity at its farms, which account for about 15 per cent of its $2 trillion economy and employ three-fifths of its 1.3 billion people.

State-run power producer NTPC Ltd, miner Coal India Ltd and oil refiner Indian Oil Ltd will together revive three ailing fertiliser plants in eastern India, Coal Secretary Anil Swarup said.

State-owned Fertilizer Corporation of India Ltd will also be a partner in the venture.

The three plants - in Uttar Pradesh, Jharkhand and Bihar - were mothballed more than a decade ago due to losses.

The companies will invest Rs 5,000 crore ($739 million) via equity to rebuild the plants, and fund the rest of the investment through loans, Mr Swarup said.

A Rs 12,000 crore pipeline, built by GAIL (India) Ltd, will supply gas to the plants which are expected to begin commercial operations by December 2020.

"This is a genuine effort to create economic activity in that area," Mr Swarup said, adding that the revival of fertlilser plants would create employment opportunities in the eastern part of the country.

Each fertiliser plant is expected to produce 1.3 million tonnes of urea, according to people familiar with the matter.

($1 = Rs 67.6570)
© Thomson Reuters 2016

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