MINISTER IN THE MINISTRY OF CHEMICALS AND FERTILIZERS (SHRI M.K. ALAGIRI)
(a) to (f): A statement is laid on the Table of the House.
STATEMENT REFERRED TO IN REPLY TO PARTS (a) TO (f) OF LOK
SABHA STARRED QUESTION NO. 162 TO BE ANSWERED ON 5.8.2010.
(a) to (b): Yes, Madam. Five Units of the Fertilizer Corporation of India Limited
(FCIL) and three Units of Hindustan Fertilizer Corporation Limited (HFCL) in the
public sector are lying closed. Following are the Unit –wise details:
(i) FCIL
Name of unit Date of Date of shutdown Date of Govt. decision
down commissioning to close
Sindri 1979 March, 2002 5.9.2002
Gorakhpur 1969 1990 18.7.2002
Talcher 1980 1.4.1999 18.7.2002
Ramagundam 1980 1.4.1999 18.7.2002
Korba Never Not applicable 30.7.2002 commissioned
(ii) HFCL
Name of unit Date of Date of shutdown Date of Govt. decision
down commissioning to close
Barauni 1976 1999 5.9.2002
Durgapur 1974 1997 5.9.2002
Haldia Never Not applicable 18.7.2002 commissioned
The closed units of HFCL & FCIL had been consistently incurring losses due to a
variety of reasons including obsolete technology, design and equipment
deficiencies, power shortages, problems in industrial relations, surplus
manpower and resource constraints. The non-availability of natural gas further
limited the ability of the units to undergo modernisation and improve energy
efficiencies which were low at 15 to 21 Gcal/MT of Urea. The above factors
combined with sharp increase in price of naphtha and FO/ LSHS made the cost
of production of urea from these units economically unviable, resulting in closure
of the units.
In addition, two urea units in the private sector viz. Duncan Industries Ltd,
(DIL) Kanpur and Southern Petrochemical Industries Corporation Limited (SPIC),
Tuticorin are currently closed due to financial constraints as reported by the
companies. Further, the urea unit of Fertilizers & Chemicals Travancore (FACT),
Cochin is also not in operation as it is uneconomical to operate.
(c) & (d): The installed capacity of these closed units is altogether 22.80
LMT. Domestic annual demand of urea is about 280 LMT. Domestic annual
production of urea in the country is about 211.12 LMT. As a part of long time
arrangement with Oman India Fertilizer Company (OMIFCO), about 20.62 LMT
are being imported annually. In addition, the urea is being imported to bridge the
gap between indigenous demand and production of fertilizers in the country.
(e): Yes, Madam.
(f): The Government has decided to explore the feasibility of revival of these
closed public sector fertilizer units subject to assured availability of natural gas,
to meet the emerging demand production gap of urea in the country. The
Government has constituted an Empowered Committee of Secretaries (ECOS)
with the mandate to evaluate all investment options for revival of the closed units
of FCIL/HFCL and to make suitable recommendations for consideration of the
Government. The Government has also decided `in-principle` to consider waiver
of all pending liabilities of HFCL / FCIL against Government of India Loan &
interest subject to availability of a fully tied up revival proposal for the closed
units. Further, the revival of Barauni unit of HFCL was proposed to be
undertaken by a Special Purpose Vehicle (SPV) viz. M/s Urvarak Videsh Ltd,
promoted by two fertilizer PSUs viz. M/s National Fertilizers Ltd. and M/s
Rashtriya Chemicals & Fertilizers Ltd., and M/s KRIBHCO, a fertilizer
cooperative. M/s UVL have expressed that revival of Barauni unit by UVL is not
feasible under the present policy dispensation.
Recently proposals have been received in the Government via consortium
of PSUs formed by Gas Authority of India Ltd. (GAIL), Coal India Ltd. (CIL) and
Rashtriya chemical and Fertilizers Ltd. (RCF) wherein the companies have
expressed their intent to put up a fertilizer plant on coal based technology at
Talcher (unit of FCIL). Similar proposal has also been received from Steel
Authority of India Limited (SAIL) for Revival of Sindri and by Krishak Bharti
Cooperative Limited (KRIBHCO) for Revival of Ramagundam.
DOF has considered the interests evinced by some PSUs in the revival
and detailed report with recommendations submitted by M/s Delloitte and called
a meeting of ECOS to seek further necessary guidelines regarding the future
Road Map/ Models before submitting for the approval of the Competent
Authority.
