LAHORE, May 23: The federal government is working on a relief package to help FFC Jordan Fertilizers Limited restart its DAP production, a person close to the developments says.

The source told Dawn that the government had hinted the company’s management that it was working out a relief package of Rs7-8 billion to make the domestic DAP manufacturing feasible. “They (government) have also approached the company’s sponsors for contributing (some funds) to the relief package,” he said.

Moreover, the local creditors of the project will also be told to reschedule the company’s loans and reduce the interest rate by 50 per cent.

“We have also been indicated that the federal government would pass on the relief it had secured from the Paris Club in the form of rescheduling of loans,” the source claimed.

The FFC Jordan was set up at a total cost of $400 million. Its DAP manufacturing plant having a capacity to produce 450,000 tons of DAP fertilizer had been put up on the assurance of the federal government that it would impose duty on import of DAP in case the international prices came down below $250 per ton to maintain the viability of local production of the said fertilizer.

“The assurance was given under the previous fertilizers policy given by the government,” the source claimed.

However, the world price of the DAP fertilizer crashed in Sept 2001 to $170 per ton rendering the local DAP production unviable. “The government didn’t impose import duties on DAP because of the huge gap of $80 per ton in the world prices and the local cost at which the company could sustain its production. Had the duty been levied, it would have devastated the farmers.