Now that the government is determined, it looks like at least five to six urea units may come up within the next four to five years.
8This totals up to an investment of anywhere between Rs 30,000 to Rs 36,000 crore.
8All of the units are going to be state pushed but a few of them will depend on private capital to be set up.
8Two units are already state sponsored, the unit in Ramagundam and the other in Talcher in which public sector enterprises are actively involved.
8The ones in Gorakhpur, Sindri, Barauni and Namrup are meant to be set up with private capital.
8But the moot point remains will private capital be interested to come in when the return on investment will be determined entirely through government fiat.
8There are uncertainties on two fronts that may keep private capital out. One is the uncertain price of RLNG on which the these units are likely to be eventually based though the government claims that ONGC's new discoveries will feed these units. Given the low international and domestic price of gas, it remains a moot point how much of ONGC's new deepwater gas will ever reach the point of production.
8The biggest uncertainty however will be on the urea subsidy regime. It is unlikely that the price of urea will ever be equal to the cost of production in the foreseeable future. In that case, the return on investment will depend entirely on the subsidy regime that will be in vogue when the units are in production.
8The government has been notorious in the past in delaying the dispensation of subsidy and denting legitimate cost claims of the the industry.
8Will a private entrepreneur risk his capital in such high value investments when the future is not known?
8Any time will provide an appropriate answer.
For more details visit indianpetroplus.com
8This totals up to an investment of anywhere between Rs 30,000 to Rs 36,000 crore.
8All of the units are going to be state pushed but a few of them will depend on private capital to be set up.
8Two units are already state sponsored, the unit in Ramagundam and the other in Talcher in which public sector enterprises are actively involved.
8The ones in Gorakhpur, Sindri, Barauni and Namrup are meant to be set up with private capital.
8But the moot point remains will private capital be interested to come in when the return on investment will be determined entirely through government fiat.
8There are uncertainties on two fronts that may keep private capital out. One is the uncertain price of RLNG on which the these units are likely to be eventually based though the government claims that ONGC's new discoveries will feed these units. Given the low international and domestic price of gas, it remains a moot point how much of ONGC's new deepwater gas will ever reach the point of production.
8The biggest uncertainty however will be on the urea subsidy regime. It is unlikely that the price of urea will ever be equal to the cost of production in the foreseeable future. In that case, the return on investment will depend entirely on the subsidy regime that will be in vogue when the units are in production.
8The government has been notorious in the past in delaying the dispensation of subsidy and denting legitimate cost claims of the the industry.
8Will a private entrepreneur risk his capital in such high value investments when the future is not known?
8Any time will provide an appropriate answer.
For more details visit indianpetroplus.com
No comments:
Post a Comment