After four months of indecision, Indiana finally made the choice to pull the plug on state support for the $1.8 billion Midwest Fertilizer Company project.
Pakistan-based Fatima Group has 48 percent stake in the company, and the project had been on hold since January 2013 due to national security concerns.
Here’s a brief timeline of events that led the state to withdraw support for the Posey County project after approving incentives and $1.3 billion in financing through bonds.
On November 30, 2012, the Indiana Economic Development Corporation (IEDC) offered an incentives package to Midwest Fertilizer Company.
The exact amount or nature of the incentives has not been disclosed, but it would have been considerable given the scale of the project which was supposed to create 2,500 construction jobs over three years, followed by more than 300 high-paying permanent jobs.
Apart from IEDC and the Indiana Governor’s Office, the company had been working with the Economic Development Coalition of Southwest Indiana and the Posey County Economic Development Partnership.
On December 20, 2012, the Indiana Finance Authority issued $1.259 billion worth of Indiana Finance Authority Industrial Development Revenue Bonds, with the proceeds going into escrow to be loaned to Midwest Fertilizer Company as financing for the project.
What’s notable about this is that these bonds were made available to Indiana under a federal disaster aid program that was slated to expire in 10 days at the end of the year, so they were perhaps rushed into a huge decision that probably should not have been made so quickly.
Immediately after that, state officials found that a U.S. Dept. of Defense official had testified before Congress that the Fatima Group had not been cooperating with efforts to reduce IED threats in Asia. Their fertilizer was apparently being used as an ingredient to build bombs, and the company was not doing enough to keep track of their supplies or change its formula so that it could not be used this way.
On January 15, 2013, a day after he took office, Governor Mike Pence ordered the project to be put on hold pending a review.
This review has been ongoing for the last four months as local economic development officials put pressure on the Governor to approve the project, and the company began cooperating to do what the DoD required of them.
Again, Indiana was being rushed into a hasty decision because there was a legal deadline for the $1.3 billion in escrow to be made available to the company in July, or the project would have to be scrapped.
On May 17, 2013, Gov. Pence issued a statement explaining that he had ordered the IEDC to withdraw support for the project.
He said he did not take the decision lightly, and added that while economic development was important, the security and safety of soldiers in harm’s way was more important.
On the same day, IEDC President Eric R. Doden sent a letter to Feisal Beig of the Fatima group notifying them of the withdrawal of incentives for the project.
Midwest Fertilizer Corporation issued its own statement, also on May 17, expressing disappointment at the announcement, but also noting that they would continue to work with the Economic Development Coalition of Southwest Indiana and the Posey County Economic Development Partnership to explore options to build the plant without state support.