The local partners categorically stated that since the equity of the company is equally shared between the two sides, the profits and losses too should be shared equally. Since the inception of the project, the Indian partners had agreed to buy back the fertilisers produced by the company and would continue to do so. But the purchase will be done at the ruling global prices.

The Indian delegation led by fertiliser secretary AV Gokak made detailed presentations to the Omanese side at a meeting held last week. The Omanese side is believed to have sought time to ponder over the issue. Apart from other senior officials of the fertiliser ministry, IffcoMD Uday Shankar Awasthi and Kribhco MD PP Singh accompanied Gokak.

Though Iffco has not yet become a partner to the project, it is ready to become a third partner, provided all the conditionalities for restructuring of the project are met. Sources in Iffco stated that "the ball is now in the Omanese court" and it now depends upon them how best they can think of reviving this project. After this decision of revival is taken by the Oman-India Fertiliser Company, Iffco will have no hesitation to join as a partner.

The local partners suggested that as initially the unit cost of production is likely to be higher than the global price per unit, the difference between the unit cost of production and global price per unit will be treated as loan to be extended to the project. Both the sides will equally share this difference between the cost of production and ruling global price which will be treated as loan by the company. The accumulated loan amount will be paid back to both sides after the company achievesprofit.

The joint venture formed two years back envisaged an output of 14.52 lakh tonne of urea with 100 per cent buyback by Indian partners. The Oman Oil Company holds $200 million of the $400-million equity. The rest of the equity is shared by Indian partners.

The Oman-India fertiliser project ran into rough weather in September 1998 folowing the withdrawal of French export credit agency, Coface from the consortium for providing loans and insurance cover. This led to some bankers putting up fresh conditionalities including an equity increase to 33 er cent from the existing 25 per cent and revision of equity-debt ratio.

As RCF and Kribhco were reluctant to increase their share of equity in the project, the Union government invited Iffco tp participate in the project and bail out the joint venture.

Iffco decided to particiate in the project but put up certain stringent demands. It urged the government to lift the embargo on partners in the project to buy urea from global markets, reduction of capitalcost of the jont venture by $150 million and appointment of a nominee of Iffco as chief financial advisor in the joint venture.