Concession Agreements & Land Lease Agreements for revival of Gorakhpur & Sindri units of FCIL and Barauni unit of HFCL by HURL and approval for providing land on lease

No: --- Dated: Aug, 09 2018

The Union Cabinet chaired by Prime Minister Shri Narendra Modi has approved the proposal -

to provide land on lease to Hindustan Urvarak & Rasayan Limited (HURL);
to provide the Concession Agreements & Land Lease Agreements for the revival of Gorakhpur & Sindri units of Fertilizer Corporation of India Limited (FCIL) and Barauni unit of Hindustan Fertilizer Corporation Limited (HFCL) by HURL; and
to authorize Inter-Ministerial Committee (IMC) to approve Substitution Agreements and approve other agreements, if any to be signed between FCIL/HFCL and HURL for the three projects at Gorakhpur, Sindri and Barauni.

Impact

The revival of Gorakhpur, Sindri and Barauni units of FCIL/HFCL will ensure substantial investment in the fertilizer sector. These units will act as anchor customer to Jagdishpur-Haldia Pipeline (JHPL) gas pipeline being laid for development of critical infrastructure in Eastern India. This will create job opportunities in the region and also boost the economy of the eastern region/state. The revival of fertilizer unit will also augment indigenous production of urea thereby enhancing self-reliance in urea.

Details

HURL, a Joint Venture company of NTPC, IOCL, CIL and FCIL/ HFCL was incorporated in June 2016 to implement the fertilizer revival projects at Gorakhpur, Sindri, and Barauni.
In order to facilitate HURL to set up the fertilizer projects at the three locations, Lease Deeds are to be signed with HURL by FCIL/HFCL. The lease of land is for a period of 55 years.
The Lessee (HURL) would pay a nominal Lease Rent of Rs.1 lakh per annum to the Lessor (FCIL/HFCL).
Concession Agreements for the three projects at Sindri & Gorakhpur Units of FCIL and Barauni Unit of HFCL are to be entered between FCIL/HFCL and HURL (Concessionaire) for the purpose of giving a right to HURL to carry out complete design, engineering, construction, procurement, testing, commissioning, operate and maintaining fertilizer plants and market its products.
Substitution Agreement which is a tri-patriate Agreement amongst HURL, Lenders' representative for the specific project and FCIL/HFCL for the purpose of assignment of the land to enable HURL to obtain finances may be required to be signed after Lenders' syndication is completed for each of the projects.

Courtesy – Press Information Bureau, Government of India