The government has initiated conciliation proceedings with China Wuhuan Engineering Co. to accelerate completion of the much-delayed ₹19,000 crore Talcher Fertilizers (TFL) project in Odisha. According to reports from Business Standard, former Chief Justice D Y Chandrachud has been appointed as the conciliator to speed up the project's execution. The company's board has also sought a ₹3,508 crore financial incentive under the Ministry of Coal's newly launched surface coal gasification scheme as part of viability gap funding (VGF).
As reported by Business Standard, the overall project progress stood at 72.97 per cent as of August 31, representing an incremental improvement of 0.21 percentage points. Infrastructure development has shown significant advancement in recent months, with both compartments of the raw water reservoirs now complete and the intake water pipeline to the reservoirs installed. Work has commenced to mobilize a 2,000-tonne mega crane, with the final notice issued several months ago. The project's revised completion target has been set for December 2027, more than three years after the original deadline. Prime Minister Narendra Modi laid the foundation stone for the revival of the TFL plant on September 22, 2018, and it was originally expected to begin production in October 2024.
According to TFL's 2025-26 annual report, the total revised project cost approved for implementation stands at ₹19,062.22 crore. As reported by Business Standard, the approved project cost is proposed to be financed through debt of ₹12,250.06 crore and equity contribution of ₹6,812.16 crore. The turnkey contracts for coal gasification and ammonia-urea packages were awarded to China Wuhuan in September 2019, with procurement and construction delayed due to the Covid-19 pandemic. The Ministry of Chemicals and Fertilizers has informed Parliament that TFL was deducting mutually agreed damages from China Wuhuan's bills under contract provisions due to slow progress and delays.
The TFL facility comprises a 2,200-tonne-per-day ammonia plant and a 3,850-tonne-per-day urea plant, along with a coal gasification unit and associated utilities. According to Business Standard, the facility is designed to produce approximately 1.27 million tonnes of urea annually using domestic coal as feedstock. The Ministry of Coal currently lists TFL's coal gasification capacity at about 2.6 million tonnes per annum as part of the country's coal gasification capacity under implementation, with coal gasification providing an alternative to natural gas as feedstock and reducing exposure to imported gas. The ministry has argued that coal gasification would provide an alternative to natural gas as feedstock and reduce exposure to imported gas.
The project is being implemented by TFL, a joint venture of Gail (India), Coal India (CIL), Rashtriya Chemicals and Fertilizers (RCF), and Fertilizer Corporation of India (FCIL). As reported by Business Standard, Gail, RCF, and CIL each currently hold 31.85 per cent in the JV, while FCIL holds 4.45 per cent. The original FCIL unit was established in Angul district in 1971 and began production in 1980, but became financially and technologically unviable and was closed in 2002. The revival initiative dates back to 2013, when FCIL signed a memorandum of understanding with CIL, Gail, and RCF to revive the TFL unit. The proposed project was initially estimated at around ₹8,000 crore and was expected to be commissioned by 2017, but the structure and scope subsequently changed, with TFL being incorporated as the implementing JV and the project eventually taking the form of a new greenfield 1.27 mt urea plant based on coal gasification.
