Krishak Bharati Cooperative (Kribhco) is likely to shelve Rs.1,750 crore fertiliser expansion project at Hazira in Gujarat. The reasons for the decision is the non-availability of gas and lack of interest by the engineering procurement and construction contractors for the project.

The failure of the project will cause a loss of about one million tpa urea capacity at low-cost and the country will have to shell out about Rs.250 crore extra subsidy to foreign suppliers per annum for imports.

The company had floated global EPC bids several times, however, only one bid was found suitable from Snamprogetti of Italy. Earlier, Technimont from Italy, Tokyo and Mhe from Japan, Uhdhey from Germany bid for the project but the Department of Fertilisers was unable to take any decision, which resulted in cost escalation up to Rs.2,400 crore. Public Investment Board (PIB) had cleared the project three years ago.

The ministry of Petroleum & Natural Gas is in talks with Relinace Industries for supply of gas for the proposed plant which will have urea and ammonia capacity of 3,200 and 1,850 tpa respectively.

Also See:

Kribhco re-invites bids for Hazira project (20-Jun-06)

Related Links:
Project profile