The union ministry for chemicals and fertilisers is keen on getting clearance for Nagal project. The other fertiliser projects like RCF-Thal expansion, Rs 1,203-crore Hazira project and Rs 1,445-crore Gorakhpur projects of Kribhco has already got pre-PIB clearance and is awaiting clearance from PIB. The ministries of agriculture and fertilisers also keen on getting PIB clearances for these projects as early as possible.

Sources in the ministries also indicated that Rs 1,569 crore Nellore project of Iffco is also likely to be taken up for consideration by the PIB shortly.Earlier, the Nellore project was taken up for consideration by PIB on Jauary 1, 1998 but was turned down on the grounds that the Planning Commission's projected demand-supply gap fornitrogenous fertilisers in the terminal year of the Ninth Plan did not justify setting up of the project with its high production cost on grounds of food security of the nation. The PIB had, therefore, urged the Union ministry of agriculture and the Planning Commission to reconcile their differences and evolve a consensus over the demand estimates for nitrogenous fertilisers in 2001-02.

In this context, the Planning Commision had estimated that the total demand for nitrogenous fertilisers would rise by 1.34 lakh tonne, if increase in urea prices to the tune of 30 per cent was effected in the terminal year of the Ninth Plan and as a result there would be surplus of about 7 lakh tonne. Comparatively, if this price correction is not affected, the demand for nitrogenous fertilisers will rise by 1.74 lakh tonne and subsequently there would be a short supply of 25 lakh tonne.

Now as the desired price correction in urea has not been effected and the Centre is thinking in the terms of doubling agriculturalproduction within next 10 years by achieving an annual growth rate of 4.5 per cent, sources in both the ministries of agriculture and fertilisers said that there is every likelihood that all these fertiliser projects will get PIB clearance soon. Besides, the government is interested in furthering its Swadeshi plank by encouraging setting up of more fertilisers units in a bid to bring down imports of fertilisers, even though the landed cost of imported fertilisers are still cheaper than than the cost of domestic production.

The dissenting note given by the Planning Commission on Nellore project that the cost of production will be as high as Rs 11,000 per tonne of urea as against Rs 7,000 per tonne of urea in other projects will not be taken into consideration. The Planning Commission had also stated about the lack of proper infrastructure in the area.

This decision of the government assumes importance when it has been noted that earlier five fertiliser projects of cooperatives and public sectorundertakings have already incurred Rs 615 crore in cost overruns over their approved costs of Rs 3,032 crore. NFL, Fertilisers and Chemicals Travancore Ltd (FACT) and Iffco failed to complete their projects within their originally approved costs.

Rs 314.35 crore NFL project was completed on January 1 after incurring an expenditure of Rs 594.50 crore. The cost of Iffco's Phulpur project which was commissioned on December 22, 1997, escalated to Rs 1,190 crore from Rs 993.60 crore.