Two firms cleared for enhancing urea capacity

New Delhi, Nov 18 | Updated: Nov 19 2005, 05:30am hrs
The department of fertilisers (DoF) has approved the proposals put forth by Tata Chemicals and Indo Gulf Fertilisers Corporation envisaging the creation of 5.32 lakh additional urea capacity.

The department had received nine proposals for enhancement of urea capacity as per the policy for de-bottlenecking and modernisation, and of these two proposals have been cleared after careful review, union minister for chemicals and fertilisers Ram Vilas Paswan said at the economic editors conference on Friday.

Other proposals are also under consideration and will be cleared after assessment and monitoring of their existing capacity so that they do not take advantage of excess subsidy in the name of expansion, Mr Paswan said. The move forms part of the governments policy announced in January 2004 to encourage the use of more efficient and environment friendly feedstock and natural gas

Under the policy framework, it was envisaged that additional production through de-bottlenecking would be allowed only with the use of natural gas as feedstock and a minimum generation of 10% additional capacity.

With a view to provide incentives for creation of additional capacity, the gains in the form of energy saving are to be allowed to the concerned unit under the existing concession scheme for urea.

The aim, Mr Paswan said, is to ensure that net additional capacity is created in a cost effective manner using natural gas. The DoF has fixed normatively determined pre-set energy norms per tonne of urea.