ISLAMABAD, June 24: Industries and Production Minister Liaquat Ali Jatoi has assured fertilizer manufacturers that a five-year period for concessional gas supply for balancing, modernization, rehabilitation and expansion (BMRE) of the existing fertilizer plants would be extended to encourage investment in the sector.

He gave this assurance on Wednesday while presiding over a meeting regarding the setting up of new fertilizer plants and BMRE of existing one with the fertilizer manufacturers from both public and private sectors and new investors, according to an official statement on the meeting.

The minister said the government would encourage new investment in the fertilizer sector and would provide maximum incentives so that an increased production should ensure abundant availability of fertilizer to the farming community for an enhanced agricultural production.

Mr Jatoi referred to reports about possible shortage of urea in near future and need for imports at the cost huge foreign exchange amounts and said there was a need of further investment in the sector and BMRE of the existing plants to enhance production and meet the feared shortfall.

There will be an annual deficiency in urea fertilizer up to 1.7 million tons while a deficiency in DAP will be around 1.2 million tons by the year 2013-14, he said. The meeting was informed that the existing urea capacity of 4.43 million tons could be enhanced to 5.05 million tons and other fertilizers from 1.2 million tons to 1.369 million tons through BMRE of the existing plants.

It was also informed that a new investor, Fatima Fertilizer, had planned to set up a plant of 1.2 million tons capacity for urea and other fertilizers. National Fertilizer Corporation Chairman Maj-Gen Zafar Abbas apprised the meeting of the corporation's plans to set up a new urea plant with a capacity of 860,000 tons and about the BMRE plan of Pak-Arab Fertilizer to increase its production by 168,600 tons per year.

The Minister assured the meeting that issues of fertilizer manufacturers would be considered and would be resolved by reviewing the fertilizer policy made in 2001. He said necessary modifications in the policy were being suggested to attract new investment.

The meeting also discussed matters regarding gas supply to the existing and new plants, prices of gas for new plants and for BMRE, import of fertilizer machinery and other related matters.