Kochi: The Kerala state government''s efforts to run Fertilisers and Chemicals Travancore Ltd (FACT), the Kochi-based central public sector unit, through a consortium of cooperatives seems to have run into rough weather with the Indian farmers Fertilisers'' Cooperative (IFFCO) putting forward certain "difficult" conditions for its participation.

IFFCO officials, who visited FACT a few days ago, have laid down conditions including writing off the loan availed by FACT from the central government for commissioning the new ammonia plant.

Another condition is that the state government should rationalise the tax structure for fertilisers, in addition to doing away with the entry tax on petroleum products. There is also a demand that the state government should supply power to FACT at reduced rates.

IFFCO sources say their participation depends on how the state government will respond to these conditions. But FACT sources admit that the ball is more or less back in the Kerala government''s court.

Top sources in the state government say most of these conditionalities will be "too difficult to be fulfilled." However, the government will try "its level best" to avert the proposed privatisation of the company.

The FACT sources point out that conditions like writing off the loan of Rs 600 crore are difficult for the state government to fulfil. What the IFFCO team suggested was import of ammonia by FACT instead of depending on the new ammonia plant, which, according to them, ruined the company''s financial health. The team''s argument was that imports will be cheaper and the company will not be viable otherwise.

The IFFCO team had also suggested that FACT plants should be gas-based instead of naphtha-based at present. The proposed conversion will call for an additional investment of at least Rs 30 crore in plant and machinery.

The proposal mooted is for a three-way joint venture in the cooperative sector for taking over and reviving the company. The IFFCO team believes that the fertiliser giant could be revived in three years subject to satisfactory fulfilment of the conditionalities put forward.

IFFCO has offered technical and managerial support for revival of FACT besides contributing to the required seed capital. The State Cooperative Department, FACT Employees Cooperative and IFFCO are to together float the joint venture.

In the meantime, Kerala Chief Minister A K Antony, who took up the matter with Prime Minister A B Vajpayee a few days ago, was told to submit a detailed proposal. The State Cooperative Department clarified that the report is getting ready and will be submitted within a week.