A joint announcement concerning the launch of the investigation into the viability of the plant, which could employ up to 500 people, was made yesterday.
Gore District Council chief executive Steve Parry said the fact up to 500 new jobs might be created was "mind-boggling".
The potential for spinoffs was huge, and everyone from builders to retailers would benefit.
"It's good news, but obviously with the size of the development it will pose challenges," Mr Parry said.
The way the council and community handled the assimilation of people into the community would be crucial.
"We don't want a construction village mentality," he said.
Gore Mayor Tracy Hicks welcomed news two large companies might invest in Eastern Southland.
While the announcement was "quite exciting", Mataura and Gore would face social and environmental challenges if the project went ahead, he said.
Infrastructure needed to sustain large projects would have to be strengthened, and that would provide a good platform for other large projects to be undertaken, Mr Hicks said.
Other considerations would be the impact on doctors, dentists and schools.
Eastern Southland Chamber of Commerce chairman John Wilson said the project, if it proceeded, would result in economic benefits for the whole district, from the construction phases through to the hiring of workers.
If staff moved into the district, they would bring their families with them, and that would benefit schools and businesses.
Mataura Taskforce chairwoman Laurel Turnbull said there was now some urgency to revitalise the town so it could cater for a possible influx of new residents.
She said there would have to be strict resource consent conditions in areas including discharge to air.
"It's great news, as long as all resource consents are adhered to. We don't want to be covered in coal dust, and this is a fear," Mrs Turnbull said.
She believed house prices would "skyrocket" if the project was centred near Mataura.
There might be a shortage of housing, and the project might provide an incentive for property developers to come into the town and build good-quality homes, she said.
Federated Farmers hopes the plant, if it is built, will remove some of the volatility of urea prices.
Southland president Rod Pemberton said urea was a key input to increase farm productivity, but was mostly imported, and farmers were affected by price volatility.
Gore District Council consultant planner Keith Hovell said if the project went ahead, the two companies might not have to go through the resource consent process if they built the plant at Solid Energy's Waimumu mine site, because it was already zoned industrial.
However, if the companies decided to build the plant elsewhere, they might have to apply for resource consents or a variation might have to be made to the district plan, Mr Hovell said.
There was also another possibility.
If the project was deemed of national significance, the Government could decide to step in and dictate how the application was processed, Mr Hovell said.
