Gov. Pence's decision on Posey County fertilizer plant 'could be any day'

Greg Wathen, president and chief executive officer of the Economic Development Coalition of Southwest Indiana, has been living with that feeling all week.

Wathen, and others involved with a proposed Posey County nitrogen fertilizer plant project, say they expect to hear very soon whether the state will offer financial support so that the project can move forward.

The decision, which will come from Gov. Mike Pence’s office, “could be any day,” Wathen said.

“Every day, we’re in a waiting pattern.”

The project, which would put a fertilizer plant at the Ports of Indiana in Mount Vernon, has been on hold for several months now at Pence’s direction.

The entity planning to build the plant is Midwest Fertilizer Corp., whose investors include Pakistan-based Fatima Group. Fatima already makes fertilizer at facilities in Pakistan.

On Dec. 1, the Indiana Finance Authority issued $1.3 billion in bonds to help finance the project. The money is now in escrow and will be available to Midwest Fertilizer July 1, providing the project comes through.

But a few weeks after those bonds were issued, Lt. Gen. Michael Barbero testified at a congressional hearing that Fatima had been “less than cooperative” in making changes to help control illicit use of its fertilizer.

Barbero is director of the Joint Improvised Explosive Device Defeat Organization, or JIEDDO. Barbero has said publicly that ammonium nitrate fertilizer from Fatima plants has made its way into improvised explosive devices, or IEDs.

On Jan. 14, after learning of Barbero’s concerns, Pence instructed the Indiana Economic Development Corp. to suspend state support for the project.

But some things have changed since then.

On Feb. 22, Barbero released a statement acknowledging what he called “positive developments” relating to Fatima Group’s efforts to reduce illicit fertilizer use. Those efforts include working on a new formula that would make the fertilizer less effective in explosives; pulling current supplies off the shelves in Pakistani provinces bordering Afghanistan; and tightening product distribution protocols.

Barbero reiterated that message this month in an interview with “This Week in Defense News.” In the interview, posted on the program’s website, Barbero said Fatima has taken “big steps” to improve product security.

Barbero also said Fatima had agreed to joint testing of the new compound with U.S. officials next month and that the company had agreed to have a U.S. Commerce Department inspector visit to look at product security measures. He also said that U.S. and Pakistan military officials have signed a “military-to-military framework of cooperation” to work together on reducing IEDs.

All of these developments, Wathen said, are positive signs for the Posey County project.

“All the facts are pointing in the director of, this should be a ‘go,’” Wathen said.

But the governor is the one who must act next, and his office was not talking on Thursday.

In March, during a visit to Evansville, Pence told a Courier & Press reporter that the project was still on hold while “we continue to evaluate the appropriateness of Indiana’s involvement in that project.”

On Thursday, Pence spokeswoman Christy Denault declined to provide updated information on when a decision might be made.

Wathen is not the only one awaiting word from the governor.

“We’re very anxious. This is something that will have a huge impact, not just on the port or Posey County, but on the entire region,” said John Taylor, executive director of the Posey County Economic Development Partnership.

“We’re sitting here with a $2 billion investment that’s just waiting.”

Based on economic modeling, Taylor said, he expects that the fertilizer plant would generate an economic impact of $8.7 billion in its first 10 years of operation. That figure, he said, includes the impact of plant construction; new jobs; and expected impact on area schools and businesses.

It’s all contingent on state-level incentives, Taylor said, since the project would not be viable without them. Specifics on those incentives have not been made public.

Tom Campbell, a Houston attorney who is acting as Fatima Group’s U.S. adviser, said in a written statement, “We remain optimistic that Midwest Fertilizer will be able to build this state-of-the-art fertilizer facility in Posey County. This is an enormous economic development project that will create approximately 2,500 construction jobs for three years and then 300 permanent jobs once the plant is open.”

Taylor said his conversations have led him to believe that a decision from the governor’s office should happen by the end of next week.

“There are a lot of people around the governor that are saying, ‘This has got to come to finality sometimes soon, probably in the next couple of weeks,’” Taylor said.

Delaying the project has consequences, Taylor said.

For one thing, he pointed out, numerous similar projects are being proposed around the U.S., and there are a limited number of general contractors qualified to build fertilizer plants.

And the company has applied for air and water quality permits, Taylor said, but the permitting process may languish if the project remains in limbo too long.

The project also needs to assemble a local project management, engineering and sales team.

“The company needs to be doing some things,” Taylor said.

Wathen said the project also has implications that reach beyond the business world.

“It’s become more than just a business transaction. It’s become, really, a geopolitical concern,” Wathen said.

Since the company has “more than met the requirements” set before it, Wathen said pulling the plug might cast a chill on U.S./Pakistani relations.

“If we don’t follow forward with this project, what kind of signals are we sending to people?” Wathen wondered.

“I think it was the right thing to do for the governor to step back and analyze it. But there comes a point in time when you have to make a decision.”

Staff Writer Eric Bradner contributed to this story.