FACT revival: negotiations yet to make headway

KOCHI, OCT. 11. A high-level delegation from the Union Fertiliser Ministry that held a round of discussions with the State Government last Wednesday appears to have made no breakthrough in securing concessions that were promised by the Government for reviving FACT.

An official in the delegation, which met the Chief Minister and the Finance Minister, among others, described the visit as a "courtesy call" after the new Chief Minister, Oommen Chandy, took over. He said the Central team would continue to remind the State Government of its promises. He indicated that the Government had a positive outlook on the revival of the fertiliser company, the largest public sector unit in the State.

The State Government had promised to cut sales and entry taxes, and reduce the land lease rates. It had also promised to reduce Sales Tax on FACT products from 17.5 per cent to four per cent, the rate prevailing in neighbouring Tamil Nadu and Karnataka.

Entry tax

The State Government will also have the onus of working for the removal of entry tax on inputs like benzene, naphtha and furnace oil.

These promises were made in June when the Union Minister of State for Fertilisers and Chemicals, Rahman Khan, had visited FACT and announced that the fertiliser company would remain in the public sector.

Mr. Khan had promised to set up a high-level committee comprising officials of the Union and State Governments to speed up the revival of the company.

The Union Fertiliser Ministry has submitted a Rs. 700-crore revival package for FACT for the consideration and approval of the Union Cabinet. The Union Fertiliser Minister, Ramvilas Paswan, had said in September that his Ministry was receiving queries from the Union Cabinet on the revival package and that these were being cleared from time to time.

The Union Fertiliser Ministry has sought writing off of the Rs. 609-crore liabilities of FACT and a grant of Rs. 90 crores for a third round of voluntary retirement programme. The Ministry is also lobbying for a working capital assistance of Rs. 150 crore for the company.

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