The Chinese firm is unable to immediately mobilise technicians, equipment and workers at the site because of disruption in air connectivity amid the COVID-19 pandemic and visa issues, they added, requesting anonymity.

Work on the Rs 13,277 crore Talcher fertiliser and coal gasification project, which was awarded to China’s Wuhuan Engineering Company Ltd in September last year, has been halted because of technical reasons, people aware of the development said.

The Chinese firm is unable to immediately mobilise technicians, equipment and workers at the site because of disruption in air connectivity amid the COVID-19 pandemic and visa issues, they added, requesting anonymity.

The recent India-China military standoff at the border may also have some indirect impact on the project, but it is too early to come to a definitive conclusion at this stage on the extent of the impact, the people cited above said. The project is the first in India to employ coal gasification technology for production of urea. Coal gasification is a process that converts coal into synthesis gas or syngas that is a mixture of hydrogen, carbon monoxide, and carbon dioxide..

“The project is on. Any call, if at all, will be taken by the competent authority depending on how India-China border talks unfold. Although the project is important to reduce India’s dependence on imported urea, national interest is supreme,” one of the people cited above, who works in an economic ministry, said.

The Narendra Modi government last week announced a ban on 59 mostly Chinese mobile applications such as Tik-Tok, UC Browser and WeChat, citing concerns that these are “prejudicial to sovereignty of India, defence of India, security of state and public order.” Imports from China are also facing strict scrutiny at customs check-points and Chinese investments are subject to prior government approval amid security concerns.

Sindo-Indian tensions shot up after a violent brawl between Chinese and Indian soldiers on June 15 along the Line of Actual Control in the Galwan Valley in eastern Ladakh in which 20 Indian army personnel an unspecified number of Chinese were killed.

The state-owned Talcher Fertilizers Limited (TFL) awarded the lump-sum turnkey (LSTK) contract project to Wuhuan Engineering on September 17, 2019 after a global competitive bid. TFL is backed by four state-run companies Gail India Ltd (GAIL), Coal India Ltd (CIL), Rashtriya Chemicals & Fertilizers Ltd (RCF) and Fertilizer Corporation of India Ltd. (FCIL). GAIL, CIL and RCF hold 31.85% equity stake each in the company and the balance 4.45% is held by FCIL.

Email queries sent to TFL, GAIL, CIL, RCF, FCIL, Wuhuan Engineering and the ministries of fertiliser, coal and petroleum did not elicit any response.

One person aware of the ground developments said, “The project had been hit by coronavirus pandemic that started in (the central Chinese city of) Wuhan last year in December, hence slow progress. But you can’t judge the outcome of a match in the first few overs. We are hopeful of completing the project by September 2023.”

An officer in the fertiliser ministry said the project has already been delayed by almost six months.

The Talcher project will produce 1.27 million tonnes per annum of neem-coated urea through gasification of a mixed feedstock comprising of high ash Indian coal and petcoke. TFL has been allotted northern part of the North Arkhapal mine as a captive asset for meeting its coal requirements and petcoke shall be sourced from the Paradip refinery of Indian Oil.

SC Sharma, an energy expert and former officer on special duty at the erstwhile Planning Commission, said, “Coal gasification to urea is not a viable technology in an era of cheap imported gas. Talcher Coal is best used for power generation at pithead where costs could be Rs 1.5 per kWh to Rs 2 per kWh. It’s more important to reduce import of coal for power generation rather than creating another technology which may not turn out to be a competitive option.”