Iffco may defer its proposed investment of Rs 4,660 crore for setting up a urea plant at Kalol in Gujarat, unless the Centre allocates the required natural gas.

The fertiliser major had envisaged setting up the 14 lakh tonne annual capacity gas-fired plant to manufacture urea at Kalol about three years ago. And it has got all the necessary approvals — except gas allocation to manufacture the product.

“It now seems difficult as the new gas allocation policy is not a very enthusiastic one. There is, of course, an assurance to allocate gas but we are not sure where we would get it from and at what price,” Dr Uday Shankar Awasthi, Managing Director, Iffco, said here.

Even if Iffco got 75 per cent of its gas requirements from indigenous sources where would it get the remaining 25 per cent, he asked, adding “If you decontrol, where would we get raw material from at an affordable price?”

Iffco’s total gas requirement, across its various plants in India, is about eight million standard cubic metres per day (mscmd), including 1.2 mscmd at Kalol. “We have urged the Government to allocate a total of 2.9 mmscmd, including the existing 1.2 mscmd, for Kalol.”

Dr Awasthi pointed out that gas production from even RIL as well as procurement from administered price mechanism (APM) is getting difficult and although the Government has made fertilisers a priority sector in gas allocation, it is yet to get its due.

However, he was all praise for the latest Government decision to transfer cash subsidy directly to the farmers. “A dry run of this scheme will commence in April under the Unique Identification Authority of India (UIDAI).”

The Iffco MD, on Friday, inaugurated India’s biggest plant to manufacture zinc sulphate monohydrate at its Kandla complex in Gujarat. The plant, with a capacity to produce 100 tonnes of this micro-nutrient daily, has been commissioned using indigenous technology.

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