The Hindu : Karnataka News : Centre plans mega chemical complex

Online edition of India's National Newspaper
Tuesday, Jun 29, 2004

Karnataka

Karnataka

Centre plans mega chemical complex

By Our Staff Correspondent

MYSORE, JUNE 28. A project envisaging construction of a mega chemical complex entailing investment worth millions of dollars is under consideration of the Government, the Union Minister of State for Chemicals and Fertilizers, K. Rahman Khan, has said.

Addressing presspersons here today, he said the Government had commissioned consultants to study the concept and submit a feasibility report within six months. The consultants would identify potential areas and the chemical complex would most probably come up in a State with a good coastal line and other facilities.

Reckoned to be a joint venture with the participation of major players in the chemical industry, Mr. Khan pointed out that all environmental norms would be observed while establishing the chemical complex which would bring in additional investment and boost the employment potential. An environmental impact assessment would also be conducted once the feasibility report was received, Mr. Khan said.

Subsidy

In reply to a question, Mr. Khan said subsidy on fertilizers would continue; in fact, it may increase.

The objective was to help farmers buy fertilizers at MRP rate. As a result of this, the burden on the Government would increase. Already, the Government was spending Rs. 12,000 crore on subsidy to fertilizers and this might increase by another Rs. 4,000 crore, Mr. Khan said.

He, however, pointed out that a new pricing mechanism was in the offing to reduce the MRP and the Government was also planning to phase out the naphtha-based production units and substitute them with gas-based to reduce the production cost. If the cost of production was reduced, the cost of subsidy would reduce to that extent, Mr. Khan said.

The naphtha-based production units were on the verge of closure, and many industrial units had already shut down because of steep increase in the production cost; hence the decision to shift to a cheaper mode of production, Mr. Khan said.

Revival package

The Minister said the Government was keen on unveiling a revival package for sick and loss-making units. This would help revive major chemical and fertilizer factories such as those of the Fertilizer Corporation of India and Hindustan Fertilizer Corporation. Mr. Khan made it clear that there would be disinvestment of profit-making public sector units in the country.

Mr. Khan said the Government was studying a scheme to help revive Madras Fertilizers Ltd. and FACT.

Mr. Khan said the installed capacity of fertilizer plants in the country was large enough to meet the demand from the agricultural sector. As against the installed capacity of 204 lakh tonnes, the nation produced 194 lakh tonnes in the last financial year.

"There is no shortage of fertilizers in the country. The agricultural sector is expected to revive owing to favourable monsoon and the demand is likely to pick up this year. The Government has taken all steps to ensure that there was no shortage of fertilizers and the farmers could procure them at an affordable price," he said.

A 24-hour helpline had been set up by the Ministry of Chemicals and Fertilizers to facilitate the Government to monitor complaints in the availability of fertilizers or about their quality. The helpline number was 011-23388384, he said. Complaints pertaining to chemicals and fertilizers could be brought to the notice of the Ministry directly, Mr. Khan.

The demand for fertilizers was expected to touch 2.56 lakh tonnes by the end of the Tenth Plan and there was a need to produce an additional 46 lakh tonnes to meet the demand, he said.

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