Revival Of Fertilizer Plants
(Release ID :111867)
The
Government has laid a roadmap for achieving self-sufficiency in the production
of the fertilizers by reviving defunct fertilizer units in various parts of the
country and establishing new units along the route of the Natural Gas Grid.
Stating this in a written reply in the Lok Sabha today, the Minister for
Chemicals and Fertiliser gave the following details relating to revival of the
sick fertilizer units:-
Status
of the revival of closed & sick fertilizer PSUs:
Out of the nine public sector fertilizer
companies under the administrative control of the Department of Fertilizers,
four are sick. These are Fertilizer Corporation of India Limited (FCIL),
Hindustan Fertilizer Corporation Limited (HFCL), Madras
Fertilizers Limited (MFL), Fertilizers And Chemicals Travancore Ltd. (FACT) and Brahmaputra
Valley Fertilizers Corporation Ltd. (BVFCL). Out of these, the units of
FCIL and HFCL are presently lying closed since 2002. MFL, FACT and BVFCL
are operational but sick companies.Details of revival/restructuring of these
units are discussed below:
Revival of closed units of HFCL/FCIL
In 2008, Cabinet approved revival of FCIL and HFCL units
subject to non-recourse to Government funding and to consider write off of GOI
Loan & interest to the extent required. The revival of these closed units
would be through nomination route by PSUs and through bidding route by private
sector. Sindri, Talcher and Ramagundam Units of FCIL to be revived on
nomination basis. Gorakhpur & Korba units of FCIL and Durgapur,
Haldia, Barauni of HFCL to be revived through bidding route.
In August, 2011, the Cabinet Committee on Economic Affairs
(CCEA) had approved the Draft Rehabilitation Scheme (DRS) for revival of all
the Units of FCIL and HFCL. DRS envisaged revival of Talcher Unit by the
consortium of M/s.Rashtriya Chemical & Fertilizers Limited (RCF), M/s Coal
India Limited (CIL) and M/s Gas Authority of India Limited (GAIL), revival of
Ramagundam Unit by M/s. Engineers India Limited (EIL) and M/s.
National Fertilizers (NFL) Limited and revival of Sindri unit by M/s Steel
Authority of India Limited (SAIL).
In its meeting held on 9.5.2013, CCEA, inter-alia,
approved waiver of Government of India loan and interest to facilitate FCIL to
arrive at positive net worth. This enabled FCIL to get de-registered from the
purview of Board for Industrial and Financial reconstruction (BIFR).
Proposal/action plan on revival of HFCL units to be taken up once revival of
FCIL units is on track. The progress of revival of FCIL units is as
under:
Revival of
Talcher:
Talcher unit of FCIL to be revived by consortium of PSUs
namely RCF,GAIL,CIL and FCIL by forming two joint venture companies, namely JV
1 & JV 2 with the following time line:
i. JV
formation through RoC
: By 30.11.2014
ii. Financial
closure & Zero date
: By 1.01.2015
iii. Commissioning
of Project
: By 31.12.2018
Revival
of Ramagundam:
Ramagundam unit of FCIL to be revived by consortium of PSUs
namely NFL, EIL and FCIL by forming a JV company with the following time line:
i. JV
formation
: By 31.12.2014
ii. Award
of contract to Technology Licensors : By 31.03.2015
iii. Project
completion
: By 30.9.2018
Revival of
Sindri:
For Sindri unit, SAIL-Sindri Projects Ltd. (SSPL), a wholly
owned subsidiary of SAIL, has been incorporated in November 2011 for the
purpose of revival of Sindri Unit of FCIL. Out of total land of 6652 acres with
FCIL at Sindri, only 498 acres (the area of existing fertilizer plant) is
encroachment free contiguous land as against the requirement of 3247 acres of
encroachment free contiguous land required by SAIL for setting up the proposed
facilities. However, no much progress has been made due to non-availability of
around 3000 Acres of contiguous piece of land for the Steel Plant.
In the context of the recent announcement of the proposed
Jagdishpur-Haldia Pipeline of GAIL, DoF is exploring the feasibility of fast
tracking the revival, of Gorakhpur unit of FCIL. Revival of Korba unit is
pending.
Financial Restructuring of BVFCL
BVFCL is
incurring financial losses since inception due to low capacity utilization
& high energy consumption. The plants were underperforming due to obsolete
technology, equipment failures and shortage of natural gas. To
address the issue of sickness of BVFCL, based on the recommendations of Board
for Reconstruction of Public Sector Enterprises (BRPSE), a comprehensive
proposal seeking financial restructuring of BVFCL has been proposed to be
placed before CCEA. At present, the draft CCEA note
is under Inter-ministerial consultation.
Financial Restructuring of MFL:
MFL is a Joint Venture between GOI M/s Naftiran Intertrade
Co Ltd (NICO) with present share holding of GOI & NIOC at 69.78% and 30.22
respectively. MFL started incurring losses in the year 2003-04 and declared
Sick in 2009. A
comprehensive proposal seeking financial restructuring of MFL to address the
issue of sickness was submitted to the Department of Public Enterprises (DPE)
to place it for the consideration/approval of BRPSE. However
DPE returned the proposal in July, 2014 stating that the post of Chairman,
BRPSE and several other members are vacant.
Financial Restructuring of FACT:
FACT located at Udyogmandal, Kerala and engaged in
manufacture and marketing of fertilizers and petrochemicals, design,
engineering & consultancy and in fabrication & erection of industrial
equipment.
FACT has
started incurring losses since 1998-99 and is a sick unit. Based on the
recommendations of BRPSE, a comprehensive
proposal seeking financial restructuring of FACT to address the issue of
sickness was submitted to the Cabinet Secretariat to place it for the
consideration/approval of CCEA. Department of Expenditure has raised some
issues on the matter. Department of Fertilizers is in discussions with
Department of Expenditure to resolve these issues. The financial revival
package submitted by FACT is yet to be placed before CCEA.
.***********
KSP
(Release ID :111867)
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