The committee, headed by Iffco managing director Uday Shankar Awasthi, in its interim report submitted to the government on December 3 has suggested that the company be set up with equity participations from private sector, public sector and cooperative fertilisers units. The proposed company will lay a pipeline network to source feedstocks for fertiliser companies.

The project must be commissioned within 4 years after its approval by the government, the report says. The committee, which is slated to give its final recommendations by January, said the proposed company must be run strictly on a commercial basis. It should also cater to the needs of those fertiliser units which would be connected by the pipeline.

Surplus stocks can, however, be sold to other units and agencies atprevailing rates. The HBJ pipeline was laid to cater solely to the fertiliser companies in the area but after other firms began sourcing LNG from the pipeline, the availability of feedstocks suffered which put fertiliser units at a disadvantage, the committee has observed. Owing to the non-availability of LNG in time, these units depended on naphtha which is 25 per cent costlier than LNG.

The committee feels that with the launching of the proposed company, the feedstock availability to the fertiliser units will be cheaper by at least 15 to 20 per cent.

Fertiliser secretary AV Gokak said his personal views were that the problem of inadequate availability of feedstocks to fertiliser companies was yet to be solved.

He said as several ministries and departments, apart from the fertiliser ministry, like agriculture, petroleum and natural gas, coal, industries and commerce are either directly or indirectly connected with the operations of the fertiliser units, a separate and autonomous fertiliser board oughtto be constituted to look into all fertiliser industry-related issues. The board should work under a definite policy framework. Apart from other mandated agenda, it should ensure easy availability of feedstocks to the fertiliser units.

Gokak's views are an improvement over the recommendations of the Hanumantha Rao committee, which suggested the setting up of a fertiliser pricing board. According to Gokak, the fertiliser board, which will also have representatives from the fertiliser, petroleum and coal industry, will play an effective role in the proposed dismantling of administrative price mechanism for petroleum and petro products and also in proposed deregulation of urea prices.