Cabinet Approves Agreements to Implement Fertilizer Revival Projects at Gorakhpur, Sindri, and Barauni
The Union Cabinet chaired by Prime Minister Shri Narendra Modi has approved the proposal to provide land on lease to Hindustan Urvarak & Rasayan Limited (HURL), which is a joint venture enterprise of NTPC, IOCL, CIL and FCIL/ HFCL incorporated in June 2016 to implement the fertilizer revival projects at Gorakhpur, Sindri, and Barauni.

The government has also agreed to provide Concession Agreements & Land Lease Agreements for the revival of Gorakhpur & Sindri units of Fertilizer Corporation of India Limited (FCIL) and Barauni unit of Hindustan Fertilizer Corporation Limited (HFCL) by HURL. The revival of Gorakhpur, Sindri and Barauni units of FCIL/HFCL will ensure substantial investment in the fertilizer sector.

These units will act as anchor customer for the Jagdishpur-Haldia Pipeline (JHPL) gas pipeline being laid for development of critical infrastructure in Eastern India.

The revival of these fertiliser units will facilitate creation of job ] opportunities in the region, augment indigenous production of urea to enhance self reliance and provide significant boost to the economy of the state/region. Lease Deeds are to be signed with HURL by FCIL/HFCL to set up the fertiliser projects at these three locations, with land to be leased for a period of 55 years.

The cabinet has further authorized Inter-Ministerial Committee (IMC) to approve Substitution Agreements and other such agreements, if any to be signed between FCIL/HFCL and HURL. The tri-partite agreement thus authorised will enable HURL, a lenders’ representative for the specific project to obtain finances as may be required after lenders’ syndication is completed for each of these projects.

HURL is also being granted with an Interest Free Loan (IFL) equivalent to the interest during construction (IDC) component of `422.28 crore, 415.77 crore and 419.77 crore for Gorakhpur, Sindri and Barauni projects respectively. The total value of the IFL sanctioned for 1257.82 crore will be disbursed during the first three years to cover only the interest accrued during the scheduled period of construction. Any escalation costs incurred otherwise, during construction owing to time or costs overrun will be borne by the joint-venture company.

The repayment of loan will be spread over a term period of 11 years, with a moratorium period of three years for disbursement of funds during construction and the repayment phased over the next eight years.