Indian-Fertilizer-Scenario - Department of Fertilizers
Indian-Fertilizer-Scenario - Department of Fertilizers
Indian-Fertilizer-Scenario - Department of Fertilizers
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130 indian fertilizer scenario 2010<br />
22. notiFiCAtion on PRoPosAL FoR ConVeRsion oF FUeL oiL/<br />
loW SUlPHUr HeaVY SToCK (Fo/lSHS) baSeD Urea UNiT aT<br />
NaNgal UNiT oF NFl To NaTUral gaS (Ng)<br />
No.14016/2/2007-FP (Vol.II)(3)<br />
Government <strong>of</strong> India<br />
Ministry <strong>of</strong> Chemicals and <strong>Fertilizer</strong>s<br />
<strong>Department</strong> <strong>of</strong> <strong>Fertilizer</strong>s<br />
Shastri bhavan, New Delhi<br />
Dated the 8 th February, 2010.<br />
to<br />
The Chairman & Managing Director,<br />
National <strong>Fertilizer</strong>s limited,<br />
a-11, Sector 24,<br />
NOIDa.<br />
Subject: Proposal for Conversion <strong>of</strong> Fuel Oil/ low Sulphur Heavy Stock (FO/lSHS) based Urea unit at Nangal<br />
unit <strong>of</strong> NFl to Natural Gas (NG<br />
sir<br />
I am directed to convey the approval <strong>of</strong> the President to the Investment proposal <strong>of</strong> Nangal Unit <strong>of</strong> National<br />
<strong>Fertilizer</strong>s limited (NFl) for Conversion <strong>of</strong> Fuel Oil/ low Sulphur Heavy Stock (FO/lSHS) Urea Unit to Natural Gas<br />
(NG) at an estimated cost not exceeding Rs 1478.63 crore, with a foreign exchange component <strong>of</strong> Rs. 320.73 crore.<br />
The project will be implemented on lump sum turn key (lSTK) basis and will be commissioned within a period <strong>of</strong><br />
35 months from the zero date i.e. 29th January 2010, the date <strong>of</strong> communication <strong>of</strong> approval.<br />
2. The project cost shall be reimbursed subject to a ceiling <strong>of</strong> Rs.1346.20 crore for Urea (subject to exchange rate<br />
variation and changes in statutory levies. The project cost shall be adjusted after completion <strong>of</strong> conversion<br />
project for any savings during execution, lower interest rate on loans with reference to SbI’s PlR and sales<br />
realization <strong>of</strong> redundant front end <strong>of</strong> existing plant after conversion. The reimbursement <strong>of</strong> project cost shall<br />
be based on the following parameters:<br />
(a) The unit shall not be allowed to use FO/lSHS as feedstock after conversion. Portion <strong>of</strong> the project cost for<br />
industrial products be excluded from total project cost for consideration <strong>of</strong> special fixed cost. The ceiling <strong>of</strong><br />
project cost <strong>of</strong> Rs. 1478.63 crores would stand reduced by Rs. 132.43 crores on account <strong>of</strong> industrial products<br />
for the purpose <strong>of</strong> urea related project cost.<br />
(b) The actual project cost shall be admitted after scrutiny by a team comprising representatives <strong>of</strong> PDIl, DOF, FICC<br />
and NFl and will be in accordance with the CCea approval along with exchange rate variation and variation in<br />
statutory levies.<br />
(c) The NPS-III pre-set energy norm would be allowed for 5 years and savings in energy with respect to the same<br />
would be considered on designed/guaranteed basis and the same would be available to the Unit for partially<br />
meeting the project cost.<br />
(d) The balance project cost shall be paid through Special Fixed Cost component and it will be covering the<br />
following items:<br />
i. Interest on borrowed Capital<br />
ii. Own funds<br />
iii. Return on own funds as a part <strong>of</strong> balance project cost.<br />
(e) 12% post tax return (pre-tax 18.18% after 30%CT + 10% SC +3% eC) be considered for own funds deployed for<br />
the project as at (d) above.
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