Lok Sabha Question No. 1555 (UNSTARRED), answered on 2016-07-26
Subject: SPV for Urea Plants
Ministry: CHEMICALS AND FERTILIZERS
Asked by: BOORA NARSAIAH GOUD

## Annexure-I

## Status of the Progress made so far to revive Ramagundam unit:

Ramagundam Unit of FCIL is being revived through 'Nomination Route' by a Consortium of PSUs namely M/s. Engineers India Limited (EIL), M/s. National Fertilizers (NFL) Limited and FCIL to set up gas based urea plant with the equity sharing of 26%, 26% and 11% respectively with a capacity of 2,200 MTPD Ammonia unit and 3,850 MTPD Urea Plant.

- The Joint Venture agreement signed on 14.1.2015.
- The estimated cost of the project is Rs.5254 crore and shall be funded in the Debt Equity ratio of 75:25.
- JV Company named 'Ramagundam Fertilizers & Chemicals Limited' was incorporated on 17.2.2015.
- The JV Company would operate the plant and EIL would take up the detailed Engineering Procurement of equipment and Construction (EPC) of the plant.
- Licensor  Agreements for  Ammonia  and  Urea  process  placed  on  M/s  HATS  and  SAIPEM respectively on 24.09.2015.
- Zero date for the project declared as 25.09.2015.
- Environment clearance obtained from MoEF on 16.10.2015
- Kick off meeting with licensors for Ammonia & Urea completed on 7.11.2015.
- Gas  Transmission  Agreement  (GTA)  with  M/s  GITL  has  been  signed  on  08.07.2016  for laying Gas pipeline from Mallavaram to Battery limites of RFCL Plant. GITL's Gas pipeline is envisaged to be commissioned by June, 2018.
- RFCL Board in its meeting held on 16 th March, 2016 approved debts tie up of Rs 3940.71 cr from consortium of six banks led by SBI.
- Concession agreement signed with FCIL on 23.03.2016 for right to use land for setting up Ammonia-Urea Complex at the Ramagundam site of FCIL.
- State Govt. of Telangan has approved in-principle for equity participation of 11%. For rest 26%  untied  equity, RFCL  is  in discussion  with prospective investors like Financial institutions, Licensors etc.
- Both the licensor for Ammonia & Urea have submitted Basic Design Engineering Package and Detailed Engineering by EIL and ordering of equipment/ placement of contracts is under process.
- The project likely to be commissioned by 30.9.2018.

## Status of the Progress made so far to revive Talcher unit

## 1. Formation JV Company:

JV Company 'Rashtriya Coal Gas Fertilizers Limited' (RCGFL) was incorporated on 13 th November 2015.

JV  Company  name  has  been  changed  to  'Talcher  Fertilizers  Limited  (TFL)'.  RoC, Odisha approved the new name on 31 st May, 2016.

## 2. Technical feasibility and financial viability of the coal gasification.

- Valuation of FCIL's assets:

Asset  Valuer  has  submitted  the  Final  Report  to  CIL  and  the  same  has  been forwarded to FCIL for their comment. FCIL vide mail dated 18 th February, 2016, has submitted  their  observation.  FCIL  vide  letter  dated  9 th March,  2016  mentioned  to have 11% equity in JV Company irrespective of assets valuation.  FCIL refused to have equity in proportion to the value of the assets to be transferred by them wherein FCIL does not intend to provide any equity in the Company beyond the transfer of Talcher assets.

- ·

CIL submitted final financial advisory report on 10 February, 2016.

- Review updated TEFR, prepared by PDIL: th
3. Selection of technology, techno-economic feasibility regarding coal based process  and  other  related  issues  shall  be  decided  by  CEO,  NITI  Aayog  in consultation with the main stakeholders.
- I. In the meeting held on 21 st April, 2016, under chairmanship of CEO, NITI Aayog, JSPL made presentation of their plant performance. JSPL in principal has agreed to conduct test for 5 days Lurgi Gasifier with coal from Talcher region, subject to certain terms and condition.
- II. In the meeting held on 27 th May, 2016, at JSPL office, ED (JSPL) informed that due to breakdown in DRI section, shutdown has been taken. Hence, JSPL vide letter dated 1 st June, 2016, provided two ways to conduct test run as under:
- I. With 2 Gasifiers in Operation with 100% Synthesis Gas Flaring: JSPL Proposed to carry out this Trial run at Lumpsum price of 14 Crs. INR (Excluding cost of coal).

Action: NITI Aayog

Annexure-II

- II. Trials until JSPL start Operating its 6 Gasifiers for downstream Units: JSPL Proposed to carry out this Trial run at Lumpsum price of 6 Crs. INR (Excluding cost of coal).
- III. In  the  meeting  held  on  10 th June,  2016  at  JSPL,  Gurgaon,  JSPL  agreed  to conduct this Coal Gasification Trial after DRI sections come to line. JSPL agreed to  collect  coal  samples  from  two  sources  (Bhubaneshwari  and  Raniganj  Coal Mines) and also agreed to submit final proposal by 28 th June, 2016.
- IV. In  the  meeting  held  on  27 th June,  2016,  under  the  Chairmanship  of  Secretary (Fertilizers), CIL informed that coal could be sold to JV Company, TFL, as a onetime sale for R&D /testing on Free-on-Rail (FOR) basis. Since this would be a one-time sale this would not require concurrence of Standing Linkage Committee.  TFL  would  authorise  JSPL  to  lift  and  transport  the  coal  from  the respective mine on its behalf and test it in their gasifiers in Angul. CIL will seek the necessary permission from the competent authority for sale of coal to TFL for the  above  purpose.  Secretary  (Fertilizers)  mentioned  that  PDIL  shall  arrange presentation  from  renowned  coal  gasification  technology  suppliers  for  better understanding of the technology vis-à-vis Indian coal perspective.
- V. JSPL submitted coal analysis report on 28 th June, 2016.
- VI. JSPL submitted their proposal on 6 th July, 2016 of Rs. 10.12 Crore.
- VII. In  the  meeting  held  on  12 th July,  2016  at  JSPL  Gurgaon,  proposal  was discussed, deliberated and negotiated in the presence of all consortium partners. JSPL mentioned to submit revised proposal by 18 th July, 2016, which is awaited.

## 4 . Geology and other necessary information as required by MoF, shall be provided by Ministry of Coal for the Talcher Project.

- I. In  the  meeting  held  on,  6 th January,  2016,  under  chairmanship  of  Hon'ble Minister for Chemicals and Fertilizers, Hon'ble Minister for PNG suggested that 50% of 'North of Arkhapal' mine may be considered for allotment to JV Company.
- II. Chairman  (RCGFL),  vide  letter  dated  25 th January,  2016,  requested  Addl. Secretary (Coal), to allot 50% of North of Arkhapal Block.
- III. Vide letter dated 12 th February, 2016, DoF directed to submit a proposal to Coal ministry to allot 50% of North of Arkhapal Block to JV Company, RCGFL.
- IV. Chairman (RCGFL), vide letter dated 23 rd February, 2016, requested Secretary (Coal), to allot 50% of North of Arkhapal Block to JV Company, RCGFL.
- V. Chairman (TFL) has submitted a letter  on  4 th June,  2016  for  allocation  of  coal block, 50% of North of Arakhpal Mine.

*********