The Hindu Business Line : Centre mulling package for FACT

Thiuruvananthapuram, Aug 10 A relief package to help Fertilisers and Chemicals Travancore Ltd (FACT) come out of the crisis it is currently going through is under the consideration of the Centre.

The package includes restoration of subsidy for sulphur, the Union Minister for Fertilisers and Chemicals, Mr Ram Vilas Paswan, has informed the State Industries Minister, Mr Elamaram Kareem.

The Centre had some time back withdrawn subsidy for sulphur, which is one of the three raw materials required for production of Factomphose. Similarly, the subsidy for ammonium sulphate had also been withdrawn more than a decade ago. These subsidies would be restored as part of the new package, Mr Kareem said here.

The Minister explained that the production cost of fertilisers at FACT was relatively on the higher side as the company was using naphtha instead of liquefied natural gas. The subsidy benefit extended to FACT was on the basis of units and this took into account the higher production cost of FACT.

The unit-based subsidy was withdrawn in 2002 and subsequently, the cost of production of gas-based companies was made the basis for arriving at the quantum of subsidy. This resulted in huge loss for FACT.

The Minister said that the restoration of unit-based subsidy would be part of the new package being considered by the Centre. This would continue till the commissioning of the proposed LNG terminal in Kochi.

FACT incurred a loss of Rs 125 crore in 2006-07. The steep rise in the price of sulphur, the main raw material for FACT, in the international market has added to the woes of FACT. The implementation of the special package would benefit the company to the extent of Rs 100 crore a year, Mr Kareem said.

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