Will Union Budget 2012-13 come to the aid of Fertilizers and Chemicals Travancore (FACT) and Cochin Port Trust?
The two public sector undertakings, which have been landmarks on the landscape of Kerala, are at the crossroads.
The fertilizer company has, in the past, sought working capital assistance but the requests have been turned down.
Even the government-appointed consultant Deloitte Touche Tohmatsu India had recommended a bridge-loan of more than Rs. 400 crore towards the working capital requirements of the company.
The recommendation was turned down too.
FACT has, however, drawn up plans for expansion and diversification in view of the availability of LNG in Kochi after the commissioning of Petronet LNG-promoted terminal here.
The company had initially invited expression of interest from public sector undertakings to establish new production units, including a 2,000-tonnes-per day sulphuric acid plant; a 1,500 TPA urea plant; a 1,000 TPA NP complex fertilizer plant and an ammonia-urea complex. The plans involve a total investment of nearly Rs. 8,000 crore at both its Kochi and Udyogamandal divisions.
However, the invitation to expression of interest did not evoke any interest and FACT authorities have invited private companies to bid for the project.
Meanwhile, the issue of pricing natural gas remains a bone of contention.
The issue must be resolved before the company can sign a final agreement on gas purchase with GAIL India Limited, which is the gas distributor for the Kochi LNG project.
Kochi port, which is facing a severe funds crunch, had appealed to the Union government for about Rs. 400 crore over three years to meet the expenses on dredging. The Port's argument was that since the channels dredged by it are used by the Indian Navy and the Cochin Shipyard Limited the government could treat it as investment in infrastructure just like a stretch of national highway.
Though the request had been turned down, there is hope that there would be some help forthcoming considering the Port's financial position, which is expected to improve once container throughput increases at the International Container Transshipment Terminal.
