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Indian Oil Corporation will join Coal India and NTPC Ltd to form a joint venture called Hindustan Urvarak and Rasayan Ltd. The new entity will revive three sick fertiliser plants at Sindri (Jharkhand), Gorakhpur (Uttar Pradesh) and Barauni (Bihar), at a total investment of around Rs. 20,000 crore. Fertiliser Corporation of India Ltd will also have a small share in the venture.
A senior government official said on Tuesday: “The government has decided that since Coal India, NTPC and Indian Oil are cash rich public sector enterprises, they will contribute equity to revive the three fertiliser plants. Initially, there was some delay on the part of Indian Oil, but now the Ministry of Petroleum and Natural Gas has conveyed that they will also be a part of the joint venture and their board will take up the matter later this month.”
“We debated the idea whether to have three different joint ventures or one single venture. Ultimately, it was decided to have one joint venture. While the overall investment will be around Rs. 20,000 crore, they are looking at a debt-equity ratio of 1:3, meaning around Rs. 6,000 crore will come from these entities,” the official said, adding that commercial operation at these plants is expected to start by December 2020.
Applications to the Ministry of Environment and Forests have also been made. The projects will be important for GAIL (India) Ltd as well. The fertiliser plants will be the anchor customers for the Phulpur-Dhamra-Haldia pipeline being built by the at a cost of over Rs. 12,000 crore. The pipeline is being built in three phases, slated for completion by December 2019.
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