State-run firms to help revive fertiliser units

job creation:The revived plants are expected to create more direct and indirect jobs.  

With an eye on the Uttar Pradesh (U.P.) assembly polls next year, the Cabinet cleared an alternative approach to revive three defunct fertiliser plants, including the Fertiliser Corporation of India’s (FCI) Gorakhpur unit that has been shut since 1990, through public sector investments of about Rs.18,000 crore.

A consortium of three public sector firms — Coal India Ltd., NTPC and Indian Oil Corporation — has been formed to carry out the revival of these plants in a time-bound manner. The public sector entities have been ‘nominated’ to invest in the venture since a 2015 decision by the cabinet to invite private sector investors for reviving these plants found no takers.

“We didn’t get a response on the request for proposals for these units’ revival,” Law and IT minister Ravi Shankar Prasad, said. “So now it has been decided to give it to these three PSUs on a nomination basis,” he said, adding that this could be a game-changer for the economy of states where these units are located — U.P., Bihar and Jharkhand.

Imports of urea

India imports about 75 lakh tonnes of urea out of its total annual consumption of 320 lakh tonnes. In the eastern part of the country, there are just two small fertilizer units in Assam that are functional.

A special purpose vehicle will be set up by the three PSUs in association with FCI and the Hindustan Fertiliser Corporation Ltd. Once operational, the plants at Sindri, Barauni and Gorakhpur would also be anchor customers for a new gas pipeline being built by GAIL from Jagdishpur and Haldia, Mr Prasad said.

The revived plants are expected to create 1,200 direct and 4,500 indirect jobs, and will also ease the pressure on rail and road infrastructure owing to long distance transportation of urea from western and central regions to the eastern part of the country.

The Cabinet Committee on Economic Affairs had earlier approved gas pooling for urea sector, so these units can get gas at a pooled price. To enhance the production of urea indigenously, the Centre had earlier approved the revival of Talcher (Odisha) and Ramagundam (Telangana) units of FCIL by PSUs through ‘nomination route’.