Govt To Decide On Rs 700-cr Aid Package For FACT Soon

Kochi, Sept 20 | Updated: Sep 21 2004, 05:30am hrs
A nearly Rs 700-crore revival package for Fertilisers and Chemicals Travancore (FACT) which includes writing-off the Rs 609-crore loan is under the Union Cabinet purview and a decision on this is expected soon, according to Union fertiliser minister, Ram VIlas Paswan.

After talks with the management and trade unions here prior to a factory visit, he told mediapersons that the Centre was committed to retaining the company as a PSU and was not in favour of closing it down. His ministry had evaluated the situation and accepted the proposal of writing-off the loan and also providing the company Rs 90 crore as grant for a VRS package which was expected to cut down the staff strength by around 1,000.

The company which had been in the red since 1998 when it took a Central loan for its ammonia plant, was in deep trouble mainly because of the high cost of naphtha. He said it was heartening to note that while several major companies like those in Jharkhand, Talcher, Gorakhpur and Baruni had to close down owing to high production cost, FACT had succeeded in going forward though it reported a net loss of Rs 167 crore last year.

He added that things would remain difficult for the company till the LNG project proposal here took off. Even the restarting of the urea plant would be possible after this.

He said that the revival package was accepted by his ministry and forwarded for Cabinet sanction after his former minister of state Rahman Khan had visited the plant a few months ago and made an evaluation.

About the Rs 150-crore working capital proposal which Mr Rahman had then said would be coming through, Mr Paswan said the Centre had agreed to stand guarantee for Rs 100 crore.

On whether the Centre would restore the subsidy for ammonia sulphate, a bi-product of the companys caprolactum operations, he said that it was under active consideration like a few other fertilisers whose subsidy had been taken off in 1994.