Total project cost for Talcher unit around Rs 8000cr: RCF

Commenting on the memorandum of understanding (MoU) signed yesterday between Coal India, GAIL, Rashtriya Chemicals and Fertilisers (RCF) and Fertiliser Corporation of India Ltd. (FCIL) to revive the Talcher Fertiliser plant, RG Rajan, Chairman and Managing Director, RCF, said the total project cost would be around Rs 8000 crore, out of which RCF contribution would be the tune of Rs 1000 crore.

He further added two joint-ventures would be formed. One the upstream company for coal gasification and two, the downstream joint venture company for the ammonia urea plant, ammonium nitrate plant. Also read: Expect healthy sowing for rabi season in FY14: Coromandel Below is the verbatim transcript of his interview on CNBC-TV18 Q: What is the value add of this for RCF and what does it bring to the table for something like an RCF? A: Yesterday we have signed the MoU between GAIL, Coal India, FCIL to develop the Talcher project. The project comprises of putting up ammonia urea plant. The urea plant will have a capacity of 1.3 million tonne per annum. We are also putting up a nitric acid and ammonium nitrate plant. The total cost of the project is around Rs 9000 crore. With regards to value addition RCF will get to market 1.3 million tonnes of urea every year, in the eastern part of the country where at present there is no plant operating. Coal India will get access to ammonium nitrate which will be used for making explosives. It will benefit GAIL too, which is in the business of coal gasification, an emerging technology. In future it has got great potential. Q: From the total project cost of Rs 9000 crore how much will be the contribution of RCF? A: We are going to form two join-venture companies; one the upstream company for coal gasification and two, the downstream joint venture company for the ammonia urea plant, ammonium nitrate plant. As regards the equity contribution they will have to be worked out after the DFR is prepared but roughly contribution from RCF will be around Rs 1000 crore for equity. Q: What is the expected timeline for revival of this unit? A: With regards to Talcher we are working to start the activities on the ground by next financial year. And we hope to commission the plant in the year 2017. Q: The other important topic is the allocation of gas and priority being power instead of fertilizers. How would you react to that? A: As of the last EGoM meeting it has been decided that the current allocation of gas to the fertiliser sector will be maintained. So there is no reduction in the gas for this sector. Only new gas finds will be made available to the power sector. Q: With respect to the new urea policy are there any concerns in the current point of time for RCF in terms of new investment? A: No as of now there are no concerns. Basically the number of proposals has come to the government and right now government is formulating a policy regarding which projects to take up. So we are awaiting the government policy in this regard.