Co-operative major IFFCO has suspended plans to set up an urea plant at Quebec in Canada due to a 60 per cent increase in cost estimates from the original USD 1.2 billion (over Rs 7,600 crore).
IFFCO had announced in October 2012 plans for setting up of this urea plant in Canada in tie up with an agri-cooperative firm La Coop federee there.
The two entities, however, said in a joint statement issued from Quebec they are not abandoning the project and would look for new partners to set up this facility.
"As construction costs are now estimated to be in excess of 2 billion dollar, this suspension will allow the shareholders to review the global strategy of financing, construction and execution," they said.
Subsequently, La Coop federee and IFFCO have decided to suspend preparation of the preliminary plans for this urea plant, as also the signing of an EPC contract, among other proposed steps.
The two co-operatives maintained that the suspension is an "essential strategic pause". The project had got approval from the Quebec province government in April this year.
"The project now requires a new approach to ensure its realisation and viability. In no way does this announcement deem the project abandoned, but rather declares a strategic pause common in such large projects...In coming months, the focus will therefore be put on the search for new partners," the statement said.
"I have seen for myself that there is interest in the project in the region. We have gone through numerous steps at a fast pace to date, and now we need to refocus the project to ensure its viability in the medium-and long-term," IFFCO Canada CEO Manish Gupta said.
Meanwhile, a senior official of IFFCO said here that production of its Jordan phosphoric plant has commenced production and it has also achieved financial closure of USD 860 million.
