The Board for Reconstruction of Public Sector Enterprises (BRPSE) has proposed to the government a revival of five sick fertiliser units, which will involve an investment of more than Rs 50,000 crore.
Instead of reviving the units with private partners, BRPSE has proposed reviving the units through government funding, mainly from revenue raised from the ongoing disinvestment drive.
“The revival would involve almost rebuilding the units, as all of them have been based on outdated technology. Also, it will reduce dependence on naphtha, as the units would run on gas-based technology,” said BRPSE Chairman Nitish Sengupta. The units are at Sindri in Jharkand, Talcher in Orissa and in West Bengal, among other states. While each of the units would require an investment between Rs 8,000 crore and Rs 10,000 crore, the Union fertiliser ministry would decide the revival package, and source of funding, said Sengupta.
BRPSE will meet representatives of the ministry next week to discuss the issue. In spite of increase in the cost, the government has been increasing fertiliser subsidy for farmers, thus inflating the import bill. In fact, 88 per cent of the increase in subsidy has been due to sharp increase in international prices of fertiliser inputs and finished fertiliser. Only 12 per cent increase in the past five years can be attributed to the increase in consumption of fertilisers, according to a government report.
As a part of the revival of units, Namrup-II and Namrup-III units of Brahmaputra Valley Fertiliser Corporation Ltd have been already been revamped. The commercial production of Namrup-II started in 2005, but the unit is not operating at 100 per cent capacity due to inadequate availability of gas. Further, the energy consumption in both Namrup-II and Namrup-III units is much higher than the industry average for the gas-based units.
