The much-delayed and publicised project, to be set up in Oman by Oman Oil Company (OOC) and Indian partners - Kribhco and Rastriya Chemicals & Fertilisers (RCF) - is facing rough weather as the remaining members of the consortium have put fresh conditions including increasing the equity to 33 per cent from 25 per cent.

Negotiations are on with export credit agencies of England and Italy to persuade at least one of them to participate in the lending consortium, which has JP Morgan, Banque National De Paris (BNP) and Arab Banking Corporation as its members, fertiliser ministry sources said.

While the Omani partner has agreed to raise the equity stake in the project to 33 per cent, the Indian partners are still undecided as the proposal has tobe cleared by their boards and the government, sources said.

The issue of raising the equity is likely to be placed before the Kribhco board on Tuesday, which is meeting in the capital on the eve of its annual general meeting. The RCF board has to take up the matter, but no date has been fixed so far, they said.

The project, which has been hanging in the pipeline, is likely to be further delayed owing to fresh financial problems as the proposal has to be cleared by the Public Investment Board (PIB) and the cabinet committee on economic affairs (CCEA).

The `zero date', the day when actual construction work starts at the project site, would have to be further advanced from the scheduled December 1998 by at least six months, sources said.

Changing the debt-equity ratio from 3:1 to 2:1 as part of the new condition put forward by the other members of the consortium, means the equity part would go up to $450 million from the earlier agreed $360 million.

According to the original agreement, the equity parthas to be equally shared by the Indian and Omani partners. Though the OOC has agreed to bring in the increased amount, the Indian partners are still evaluating the proposal, sources said.

As per the earlier schedule, the project was likely to be commissioned in 2001. The plant's production capacity has been envisaged at 14.52 lakh tonnes of urea and 3.3 lakh tonnes of ammonia every year.

For the 50:50 partnership project between India and Oman, Italian Snam Progetti and the German consortium of Krupp Udhe were shortlisted. Snam Progetti was selected after the bids' detailed evaluation.