The Hindu : Kerala News : FACT ready to lend space for GAIL's petrochem project

Online edition of India's National Newspaper
Sunday, May 01, 2005

Kerala

Kerala

FACT ready to lend space for GAIL's petrochem project

Staff Reporter

EIL preparing the pre-feasibility study for complex

KOCHI: Fertilisers and Chemicals Travancore (FACT) is ready to provide about 400 acres of land at its Udyogamandal complex for the gas-fired petrochemical complex proposed by the Gas Authority of India (GAIL).

The chairman and managing director of FACT, S. Balan, told reporters here on Friday that the fertiliser company would look at the proposal and seek, in return, compensation for the land as well as a stake in the proposed petrochemical complex.

Engineers India Limited (EIL) is now in the process of preparing the pre-feasibility study for the complex, estimated to cost about Rs. 7,600 crores.

The FACT management is ready to provide the space for the project as it would help the ailing public sector giant raise the much-needed working capital and also give it an opportunity to be part of a venture that promises big growth.

The investment proposed by GAIL will be the biggest-ever public sector investment in Kerala and the State Government is likely to take a share in the venture.

Mr. Balan said that FACT still needed a working capital loan to the tune of Rs. 100 crores and that it would be raised with the backing of a Government guarantee. He pointed out that Rashtriya Chemicals and Fertilisers (RCF) had brought in some funds to meet the requirements of the company during the past year when the company pared its losses to Rs. 88 crores (without calculating the interest on Government loan) from the previous level of over Rs. 167 crores.

Mr. Balan said that the company management was not looking at a new round of voluntary retirement offer at the moment. The major reason for this was the fact that the company did not have enough resources to pay the employees who seek to retire.

Mr. Balan said that the Board of Directors of FACT that met here on Friday discussed the proposal by the RCF and that the Board members were open to them.

The proposals were now before the Board for Reconstruction of Public Sector Enterprises.

A decision was expected within a month, he added. Mr. Balan also ruled out the possibility of a merger between the RCF and FACT in the immediate future.

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