The Public Investment Board (PIB) has deferred clearance of three major fertiliser expansion plans -- the Thal expansion of Rashtriya Chemicals & Fertilizers (RCF), as well as Kribhco's Hazira and Gorakhpur expansion projects.

This has come as a major blow to the fertiliser industry's expansion plan initiatives in the country considering that the current policy is anyway not conducive to expansion and growth, said a senior official of a public sector company.

According to industry sources, the clearances have been deferred as a difference of opinion between the planning commission and the ministry of agriculture and ministry of fertilisers has cropped up of the issue of whether urea should be imported or the industry should go in for a future build up of capacities.

This block of three projects had come up before the PIB last week on a priority basis, said sources.

The planning commission is of the view that urea should be imported into the country considering that the international price is coming down. The ministry of agriculture and the department of fertilisers, on the contrary, believe that the international price trend is a seasonal fluctuation and the drop in the urea price in the international market is no indication of the future things to come.

The ministry of fertilisers is in favour of increasing urea capacities in the domestic market, considering that to meet the target of doubling of the agriculture output, the country would require to double the fertiliser output as well. This, the ministry believes, would also help save foreign exchange outgo.

With no convergent view emerging on the issue, the delay in clearances for the projects is likely to have a demoralising effect on fertiliser companies going in for expansions, industry experts feel.

RCF has applied for PIB clearance for setting up a third stream of urea-ammonia plant at Thal in Maharashtra. The investment plan was around Rs 1,200 crore in setting up additional capacities of 2,200 tpd of urea and 1,350 tpd of ammonia. The company secured the first stage approval for the expansion plan last year.

Kribhco's expansion includes additional capacity of 7.5 lakh tonnes per annum of urea at Hazira. The Gorakhpur expansion and revival plan involves Kribhco which has undertaken to set up a new plant at the existing land.

As against the total production of around 96 lakh tonnes of urea in the country, the total consumption stands at around 210 lakh tonnes. The balance is being met through imports.