The Central government is learnt to have approved a proposal to establish a urea plant at the FACT unit in Kochi, Chief Minister Pinarayi Vijayan informed the Assembly on Monday.
Replying to a calling-attention motion moved by V.K. Ebrahim Kunju, he said the Centre had come round to the proposal to set up a plant with a capacity of 5 lakh tonnes, though the State had demanded a bigger plant of 12 lakh tonnes.

Mr. Vijayan said the availability of LNG as feedstock would work out to the advantage of the public sector company. �To make FACT�s operations more viable, the State government sanctioned ₹30.46 crore for FACT last year as relaxation of VAT on Regassified LNG.�

In 2002, the public sector enterprise had shut down a urea plant using naphtha as feedstock as it had become economically unviable.

The Chief Minister said the revival package for FACT envisaged the establishment of a urea plant with an investment of ₹1,300 crore. The revival of the caprolactam plant was also on the cards.

He assured the House that the government would exert pressure on the Centre to utilise the entire proceeds from the sale of land for the revival of the ailing company.

The State government had acquired unutilised land from FACT for the establishment of a petrochemical park by Kinfra.

The Union Ministry of Fertilizers had decided to utilise the ₹1,000 crore fixed for the land deal to clear the loan and tax liabilities of FACT. This, he said, would leave the company with no funds for the revival package.

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