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Wednesday, Jun 15, 2005

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Industry & Economy - Fertilisers

ONGC row with IFFCO, GSFC on dues recovery deepens

Pratim Ranjan Bose

Kolkata , June 14

THE tussle between ONGC and the two fertiliser companies - the Gujarat State Fertiliser Corporation (GSFC) and the Indian Farmers Fertiliser Co-operative Ltd (IFFCO) - on recovery of dues has intensified.

The oil and gas major has challenged the allegation of the companies that its demands were raised after 15 years since the supplies were made.

"The allegation is incorrect. ONGC has definitely raised the demand on several occasions during all these years," the ONGC Director Finance, Mr R.S. Sharma, told Business Line.

IIFCO and GSFC have a total outstanding of Rs 6,614 crore, including a principal component of Rs 335 crore, for a disputed hike in the price of gas supplied between 1982 and 1987. Of the two, IIFCO's dues are larger aggregating Rs 4,210 crore, including a principal arrear of Rs 217 crore.

The fertiliser companies had challenged the validity of the demand before the Gujarat High Court. The court has ordered administrative resolution of the dispute and a report on the resolution by June 29.

Five other Gujarat-based companies have outstandings vis--vis ONGC. They are Heavy Water Project, Baroda Municipal Corporation, Gujarat Electricity Board (GEB), Gujarat Narmada Fertiliser Corporation (GNFC) and Gujarat Industrial Development Corporation (GIDC).

Following an administrative decision, ONGC had recently limited its demand to the outstanding principal and struck a Rs 84-crore recovery agreement with GEB. The company is currently negotiating similar agreements with GNFC, GIDC and VMC.

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