The project finally made some headway in February with the appointment of its board of directors and the selection of its first chairman. It was reported then that the giant fertiliser complex would be completed in 33 months. The Indian partners, Rashtriya Chemicals & Fertilisers and Kribhco are believed to have started laying the foundations for product acceptance by educating farmers about the granulated urea that the Indo-Oman venture would produce.

The project, has, however, developed a snag with Coface of France withdrawing from the consortium of lenders and other consortium membersinsisting on a higher equity component in the project's capital structure. Fresh reports indicate that Oman Oil Company has agreed to make the additional equity investments. If the Indian partners concur, they would have to shell out an additional $45 million (Rs 180 crore). There have been concerns that fresh clearances would have to be obtained for this.

Considering that the prime minister, in his recent visit to Oman, affirmed India's commitment to the joint-venture project, the government is likely to press hard for approval. But capital restructuring would hardly put an end to the problems that surround the project. The contentious issue of the Indian partners having to pick up the entire production and providing the difference between the floor price and the market price would continue to plague the venture for long.