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Work begins on India-Oman fertilizer project
Tuesday, 24 September 2002, 19:30 IST
DUBAI: An India-Oman fertilizer project that was first proposed in 1993 has finally kicked off, with ministers from the two countries launching the project in Sur in Oman, reports reaching here said.
Indian Minister for Chemicals and Fertilizers Sukhdev Singh Dhindsa and Oman's Minister of Commerce and Industry Maqbool bin Ali Sultan launched the project at a function Monday to celebrate the finalising of agreements signed in July.
The Oman India fertilizer plant is being set up in Sur, around 200 km south of Muscat, at a cost of approximately $1 billion. Funding requirements for the project are to be met with $320 million of equity and $649 million of debt.
It is a joint venture between the Oman Oil Company (OOC), the Indian Farmers Fertilizer Cooperative (Iffco) and Krishak Bharati Cooperative Ltd. (Kribhco). The plant is owned by the Oman India Fertilizers Company (Omifco).
Dhindsa said the project would further boost political and economic ties between the two countries. The plant will use Omani gas to produce urea and ammonia and the end product will be exported to India for a period of 15 years.
The plant will go on stream in mid 2005. It will have two units of urea each with a production capacity of 2,530 tonnes per day and two units of ammonia each with a capacity to produce 1,750 tonnes per day.
"This project has special significance due to the strategic place that Oman occupies in India's relations with countries located in the Middle East," Dhindsa was quoted as saying by the Oman news agency.
The two ministers also signed a commemorative certificate at the launch ceremony. Others present included U.S. Awasthi, managing director Iffco, V.N. Rai, managing director Kribhco, and Salim bin Hassan Macki, chairman of Omifco.
Dhindsa said the project was the first overseas venture in which the Indian government had committed to purchase the entire urea production for 15 years.
"This commitment symbolizes the importance that India attaches to this venture," the minister said, adding that his country gave "special status" to Oman.
The success of the project, Dhindsa said, could set the tone for both countries for future bilateral cooperation in fertilizer and other fields.
Minister Sultan said this is the first joint venture to be implemented with participation of the Omani and Indian governments and would help boost ties.
"We celebrate the signing of financing agreements in London on July 5 following the successful securing of loan facilities for the project," he said, adding that construction of the fertilizer plant had already begun.
The venture was first proposed when former prime minister P.V. Narasimha Rao visited Oman in 1993. Subsequent leaders endorsed the project and Prime Minister Atal Bihari Vajpayee accorded it top status during his Oman visit in 1998.
The Indian cabinet gave its final approval in January last year.
Source: IANS
Source: IANS