Production at the Jamuna Fertiliser Factory, one of the six urea factories run by the Bangladesh Chemical Industries Corporation (BCIC), came to a complete halt on Thursday last due to a reactor leakage and the authorities fear it will not be operative before February 14.

Thirteen days of Jamuna closure would mean production loss of 19,500 tonnes of urea at the most conservative calculation of per day production capacity of 1500 tonnes, officials concerned said.

Last month BCIC incurred a production loss of 26,400 tonnes of urea due to suspension of work at Zia Fertiliser Factory for 22 days at a stretch.

Chittagong Urea Fertiliser Company (CUFL) was out of production for a record 61-day last year.

BCIC is worried at repeated suspensions of production at one factory or the other as low level of domestic urea production and rising demand for the chemical fertiliser in the country have forced the government to arrange import of nine lakh tonne urea in 2005-06 fiscal year.

As against 28 lakh tonnes of urea demand in the current fiscal year, BCIC had projected that its factories would be able to supply 19 lakh tonnes. But repeated production halts at urea factories now cast a long shadow over meeting the target.

BCIC factories produce per tonne urea at Tk 6,000 and market it at Tk 4,800 while the gap is supposed to be met by government provided farm subsidy.

Attributing the frequent production drops at its factories to serious liquidity crisis, BCIC sources said there have been lapses in proper maintenance of the aging urea factories.

BCIC is handicapped in proper repairing and overhauling of its factories because of government's failure in paying off its Tk 1,000 crore outstanding dues accumulated over the last five years as unmet subsidy bills.

Cash-strapped BCIC's poor maintenance budget could hardly ensure round-the-year smooth operation of all six state-run urea factories in the country thereby forcing the government to import urea from abroad at three times higher rate.

Seeing no prospect of the finance ministry's paying off BCIC's dues, industries ministry in late last year forwarded a proposal to the former asking for raising the market price of urea so that BCIC's loss is minimised.

But the government is sitting on that production and market price adjustment proposal considering severe backlash from farmers as well as from urban consumers in the election year.

In 2001-2002, BCIC factories produced 15 lakh tonnes of urea and incurred a loss of Tk 180 crore as price gap due to non-payment of the subsidy, in the following FY it produced 20 lakh tonne to incur a loss of Tk 240 crore and as this FY's projected output is 19 lakh tonne, BCIC is set to count a loss of Tk 228 crore.

Shortfall in domestic urea production is a costly affair, as the government has to import urea at Tk 18,000 a tonne compared to BCIC's production cost of Tk 6,000 only.